The Month We Gave Up

Since hiding our mistakes and ignoring our problems is how we got into this mess in the first place, I feel obligated to talk about "the month we gave up." It is not easy to admit our shame. But it must be said.

Last month, May, was a miserable failure for us. So much so that by the end of the month we had just given up. In starting June, my husband just wanted to wipe the slate clean and start all over. It was tempting. But I felt we really needed to figure out where we stood. How much trouble we had gotten into.

Sure we could look at all that happened and justify it....
{our son needed surgery, our daughter needed to go to the ER and get staples, we had family obligations that required us to travel when our budget was already stretched thin, bills that showed up out of no where 5 months after I had surgery.} These are all reasons why we went over and way into our Emergency savings. But it is worse than that. We gave up. We realized what a mess we were in and we made the mess worse. We let it get really bad. I just wanted the month to end. There are a few other reasons that my husband says were "planned" for but since I don't know how those books were kept, I *guess* that isn't a contributor. And the only thing that kept us from bouncing checks and overdrafting or using credit cards again, is that we use the previous months funds to pay this month's expenses. It was a choice we made and set up after our tax return gave us a cushion so that we always have a cushion, and never have to worry if all the expenses come due before that month's pay check. The problem with that now is we no longer have the cushion. We are now back on the pay check to pay check budget and because we still have all those bills from last month, we aren't paying any debt this month. We are back on baby step one.

I feel like we are failures. Like we have lost a battle. But you know why we are not? Because we figured it out and we are getting back on track. It is what repentance and starting over is all about. We all make mistakes, we all feel like giving up. Satan wants us to believe that when when make a mistake that is the end. We can't listen to his lies. We must get back up and keep going.

Let's talk about Americans' Debt Problem

A friend of mine posted on facebook recently an article written by author Neal Gabler. He brings up a lot of reasons why American's are so in debt. Starting with how with a statistic that "nearly half of Americans would not be able to get together $400 to pay for an emergency." I got the impression that would include even having $400 available in lines of credit to pay for the emergency. It goes on to say that even a small percentages of American's could go on to get $2000 together to pay for an emergency. 

Now we have always had enough lines of credit to pay for a $400 emergency and a $2000 emergency. But regardless if we could get the funds together, if it was possible to pay for it with the credit card- we did. It was easier not to think about it.  That is part of the reason we are in the situation we are in. In addition, if those funds were required in cash, it would just mean that something else would be put on a card.

Before starting on this path of debt reduction, I would have sympathized more with his life story. I would have related more to his plight. But now I look at it and notice that there is a tone of "yes it is my own fault" that they are weighed down by this debt, and he sees himself as breaking a taboo just talking about it. I get the impression that he is also saying "BUT I would make the same choices again and still be in the same situation". He is not saying that debt is a bad choice all the time. I distinctly feel that he is saying that debt is necessary but shackling us as Americans away from our dreams. 

I see the attitude that needs to happen in America as a state of repentance.Repentance is more than just saying you are sorry, but we have to change, to truly repent we must make permanent changes to our lives.

We need to recognize that we have a problem with debt. Each of us individually needs to recognize, then we need to repent of our addiction, by feeling sorrowful for our choice, and then resolving to never use it again. Mr. Gabler did not seem repentant. He recognized that there was a problem, he even seemed remorseful that he made those choices, but it felt that he was still trying to justify his choices. In the end, although he talks about how their past choices are determining their choices today, I would not be surprised to learn that he and his wife are still using credit cards as a way of life. One thing I have realized is that as long as you are a consumer of debt products, eventually you will accumulate debt and become "in-debt". You will never get out of the cycle unless you forsake the products of debt. Yes some people, like my dad, can have a card and pay it all every month. He only uses it for those things were he needs to (internet, hotel bookings, car reservations). For everyday purchases he uses is debit card. I have learned that I am not my dad and neither are most Americans. Especially American's who have been told that they will have to go into debt to enjoy a basic standard of living, that is how it is done, how everyone does it. Especially Americans who have been told that their buying power will never be that of their parents because their income isn't going to increase. It is stagnate. Lastly it is never going to work for Americans who have bought into the mentality that buying stuff is good, and if you can't afford it put it on the card, the card benefits are great. All things that most Americans find normal and how things are done. I so wish I could ask Mr. Gabler some questions. See if he sees this bigger picture. It is never too late to change. Change our lives and repent, and change our spending habits and get out of debt.

the 6 people in my life

Recently found an article on Dave Ramsey's site called "6 People You Need While Getting Out of Debt".
It made me think about who those people are in my life.

1. The Supportive Spouse
     I could see this being important, if one of you aren't ready to make the commitment to make changes those changes are never going to happen or stick. I am grateful that my husband sees this as important and we are working together.

2. The Jerk
    We expected to meet more of these then we have. Maybe my husband has met more then I have. As we told people we were cutting back and making changes we though we'd have more resistance. In fact, I can't think of one person we are friends with or personally acquainted with that has even scoffed at us. I did have one person on the phone, one of the people at the credit card company. I called them to get info from them that I needed from the card. When I said we didn't have cards anymore, he wanted to send new cards out and was quite rude when I said 'no! we don't want any cards'.

3. The Friend Who Understands
    Every one of our friends that we have spoke to about it has been very understanding. Some have gone out of their way to help us out.  Our families have been really understanding too. We have been blessed.

4. The Joneses
     Everyone has that neighbor or friend who seem to spend so carefree and have all the latest toys. The church ward we belong to has a lot of families that are really well off.  Over the past years I have had to remind myself that we can't live like some of them do. We can't take as many or as extravagant vacations. We have lots of friends that are dentists and doctors. They choose to live out where we do because there is lots of land to build dream houses. This summer has been harder than normal in watching because they are all doing their summer activities and vacations.
  One particular family any time I mention something they did this summer my husband responds "it must be nice to be on the hospital board of directors". This set of friends has are the Joneses that I wish the most we could keep up with. They are always taking big trips and doing lots of activities. For example for Spring Break this year they spend it in England, and their boys have been to summer camps almost every week this summer. In the past, I would compare and in a way try to keep up with them. They go on a Disney Cruise almost every year, when we decided to do a family cruise we in the end decided we would do a more affordable cruise line. Besides that the husband is a doctor and on the hospital board, I also have to remember that we are at different stages of life. Their oldest child is 12 and their youngest is 6. While my oldest is 6 and our youngest is 15 months. They have been working professionally longer, and I know when they were first married and out of school they lived really humbly. My husband reminds me that they lived like no one else already, and now they probably can live like no one else. We just aren't at the same place in our lives. I can't keep up with "Joneses" they are in a different place in life and the dad is a doctor.
   Another family I have a little harder time in the day to day is a family who our children are all about the same age. We have been friends with them since moving here. In the mean time, she now works full time in a well paying job along with her husband. Whenever we hang out with them she has picked up some sort of fast food for snack food, lunch, or dinner. Since Arizona summers are so hot she always wants to meet at the McDonalds play area- I am not against theses, in fact we love them, it is just when we aren't buying food, my kids whine and cry so much I can't do it. Many times I have fallen into the comfort zone of just buying fast food with them. This summer has been hard, but I have come prepared with snacks from home and sandwiches in a bag for lunch. I have to remind myself that we can't keep up with the "Joneses" they are a two income family and we are only a one income family.

5. The Co-Worker Who "Gets It"
    I remember back to when I worked full time. It is hard to not be part of the "group" at lunch as they head somewhere to pick it up and eat. My husband has mentioned that at least some of them have been understanding on why he isn't going out anymore. To make this easier on my husband I try to give his lunches some variety and something special. Even when you have a co-worker who "gets it" I'm sure it doesn't make it any easier to be left out.

6. Dave Ramsey
   I rolled my eyes at this one on the list but then I started to think- I liked his facebook page. Now every once in a while I see an article in my news fed. Seeing some of these articles have helped me to start thinking about different things and has helped a little bit to stay motivated. 

Avoid our Pitfalls of Credit Cards

Credit Cards are the worst type of debt. I fooled myself for years into thinking having "revolving debt" was the way to go. I got into the habit of convince back in college and have continued those bad habits.
I realized in college that if I used my card for my every purchases instead of my debit card. I didn't have to pay attention to what was in the account at that moment. I didn't have to worry if my paycheck was deposited today (and was available) or if it will show up tomorrow. So I used my card to make the everyday purchases and then told myself I would pay it all each month.  Sometimes it worked out just like that. But then there were the months I was unemployed or didn't have as much income as I normally did for my spending. Or I straight up over spent. As life got even crazier and I paid even less attention those numbers added up even more. There are a lot of people who get into lots of debt because they impulsed bought, often big ticket items. We aren't bad at that. We have had our moments, but that is not the bulk of our debt. And to compound it all is the compounding interest. Once you have that carry over balance getting rid of that balance again is almost impossible only making payments.

So here is a warning to you.

All debt is bad debt. Revolving debt is still debt and the easiest pitfall get trapped into. Sure I thought it was making my life convenient (and it was convenient) but I was also ignoring the responsibilities to my finances. I was addicted to my credit cards. Not exactly to the overspending but to the easy non-accountable way I didn't have to worry about every penny. But that isn't good for our pocketbook nor is it good for the soul. God's plan is for us to be accountable.

Now we are paying the price of our non-accountable actions. We are now being held responsible for all the actions we have taken.

Learn before. Don't use credit cards. If you're in the same boat as I am. Cut up those cards, go cash, and force yourself to learn to be accountable. It is possible. We can do it.

No debt is good debt.

WE did it! One full month!

We did one full month. Our first month.
accomplishments:

• In our first month we were able to put aside our $1000 emergency fund.
• Pay off my student loan
• Pay on our Van's loan
• Spend less than $80 on groceries for the month
• managed to use cash for everything that is not on automatic withdraw

I know I should see this as a HUGE accomplishment. But I have to constantly remind myself of that. I have to look at this list and say "look how much we accomplished in only one month". Otherwise, I look at all the changes we have made in our lives and feel depressed that this is our new life for a while. 

So I choose to look at the list and remind myself we are making progress!

Reading The Total Money Makeover

My husband and I already knew our way of looking at things was broken.  We knew something had to give. We had been at this point many times when we tried to have an honest discussion about our debt in the past. In trying to decide what we needed to change my husband brought of the popular method of "cash and carry" that is recommended by Dave Ramsey. Although we didn't attach his name or anything else to it. Knowing that some of our friends have used this method to get out of debt and stay out of debt it had come up in our discussions many times- but honestly my husband didn't see it working for him so therefore it was off the table of options. Not to mentions my previous issues with cash (I worked as a teller through out college, cash is something I give away to other people, not use myself) therefore I wasn't going to push it. That being said, it came up this time and it was my husband talking about it. I suggested if we were going to be serious we read the book first that started most of my friends on that journey- just to make sure we really understood it and did it right. The book is "The Total Money Makeover". My husband downloaded it, read it, was totally on board. Then it was my turn to read it....
Thought One-
How could I have been so misled? How did I allow myself to be so misled? Didn't I know better? Didn't I question it at any time? How I could I miss lead others? I had been so worried about my credit score (my how-much-I-love-debt score). It went way out of my way to go into debt to built my credit, buying a car when I had the money in savings and making payments on it every month- how dumb and mislead was I? I talked people into taking more debt because it would only change their monthly payments for a few dollars. Reading him lay out all the lies I had told myself and others made me physically sick. I had made one mistake after mistake after mistake all because I had bought into all the lies. Up unto that point I had been proud of myself that my great 'how-much-I-love-debt-score' had made it possible for us to buy a house. That brings me to thought two.
Thought Two-
Besides the issues I have with our house- the roof needs an overhaul by honest roofers, I can't stand that people can see my dirty kitchen from the front door, and the awkwardness of the kitchen in general- we really love our house. We love the location. We love the size of it for our current family and as we've have grown or continue to grow. We looked at what we could afford and decided the top of our price range was worth having an actual possible forever home for our family. Then in reading, for the actual serious first time ever I started to question if this home had been our worst choice ever. Had all the lies we'd been told blind us to what we should have been looking for. It made me sick, more then with buying into the lies, because a home isn't the easiest thing to change. I started fretting over it. I started doing possible math scenarios in my head and on paper. "What if we rented our house for two years?" "What is our home worth now?" "In this market could we even sell our home?" "How could we give up this location?" I should have been focusing on the book and the overall message, not fretting about my house. In the end we did the recommended math for a home, yes it was a little on the higher end of the recommended range for our pay grade (and when we bought the house we were making a little more than we are now), and that was such a relief to know. That according to Mr Ramsey's guidelines on home purchasing we hadn't purchased out of our income.

my once a year haircut

Thought Three-
As I read about all the sacrifices that people had to start giving up it made me sick. Not because I didn't want to give up those things, but because I already had. You can't cut things out of your budget that aren't there. In the past, as we've tried to scale ourselves back we have looked at things that are not needs, and even things that are needs we've looked at and said is it as need as often as we use it? We gave up cable years ago. My husband was already going twice as long for each hair cut as he would like, and we had stripped my 4 times a year to once a year for my hair cuts (I cut it really short, then grow it out for the year and then cut it off again the next year.) And we both go to very reasonable in cost places. Additionally, I don't get manicures or pedicures (not that I wouldn't like to but they are not needs). We had started just doing "desserts" or "half price appetizers" for date nights to cut the cost of going out to dinner and we almost never go out to movies (about once a year). We both play World of Warcraft, but the game has started doing an in game token that you can buy game time with your in game gold. We have both started buying our game time this way, so we aren't paying $30 a month for our game play anymore. It made me feel so downtrodden. We had stripped ourselves of all these things, and we were still unable to make a dent. Besides our Netflix and our Costco membership the only thing left was our vacations. It was all our over spending on the little day to day things that were completely discretionary. But what was there left to sacrifice, what was there left to get a "snow-ball" going.

Disneyland is one of my favorite and repeated vacations

Thought Four-
I value my vacations. I live life just to go on vacations, when I realized that the only thing I had left to sacrifice was my vacations I actually cried. I had hit my rock bottom. I was completely defeated. There was not getting up from that last blow. To really get a feel for how down and defeated I was, I don't really cry. With the exception of when I am pregnant- which I can say with 100% knowledge that I know I was/am not pregnant. I felt as though someone came in and started beating me up, I couldn't do anything to respond, and they kept beating me up until they left me for dead to cry on the ground. It hurt so much to think we were going to have a sacrifice our vacations. Now in the past we have taken some vacations that would have been seen as extravagant. They may have appeared unwise, and many of the choices we made may not have been the most wise choices at the time. But we paid for most of them the way we should have, by saving for them. Granted to be honest we should have been doing the snow ball method sooner, and applying that money to our debt not putting it in a savings account for vacations. But I had the right idea, real problem was though that we continued to spend on other things that went to the debt. So going back to giving up our upcoming vacations- this summer we had a cheap vacation lined up. It wasn't a cruise or Disneyland (my two favorite vacations) it was going camping in Colorado with my extended family. But even that was going to cost money- there is no such thing as a completely free vacation. Not to mention, we needed to be sacrificing something what else was left if not this. Then I went to a really dark place a despair- how long would it honestly be before we could take any vacation at all? It wasn't giving up just this summer's trip, but it would be giving up a few summers to come. Now when my husband married me, I made sure he understood that vacations were my life. That I need vacations to look forward to, to keep me going from day to day. I can be prone to depression, and I can do little things to help me get through a day or two, but the only thing that has ever actually pulled me out of a depression funk is looking forward to a vacation. Planing it, learning about the place's history, the options we'd have. If I have a vacation to direct my mind to I can overcome that funk in no time. But the thought of no vacations with no vacations at the end of the tunnel was devastating to me. It sucked all happiness and sunshine from my life for days. All my creativity- I graphic design digital scrapbooking kits, I couldn't work/create for days. It was seriously as though my world had ended. Now this book isn't the step by step how to that I get the impression some other things of Mr. Ramsey are. This book is a~ slap to the side of the head wake up call that you are going about this all wrong-You already know how, is the reminder, now do it right~ book. So the only glimmer of hope I had was asking myself "at what point can you say, we've been good, we are doing good, we need to reward ourselves with a vacation"? I am still not sure at what point until we are just on the saving steps with lots and lots of savings can you justify large spending like that. Maybe if I listened to his show, podcast, attended a conference, or read another one of his books I could better answer this but I don't have the answer now. I got stuck on this thought. I forced myself through the rest of the book. I was still on board- heck we didn't know where else to go to change our future. But it looks like the most depressing future that I could imagine until we were totally and completely out of debt. I am still depressed about it, even with a month into it. Ask me again in 6 months when I hopefully see that there can be a light at the end of the tunnel.
Now my husband did come up with dim light at the end of a far away tunnel. He did some math to see where having a 6 month emergency after all the debt is gone and then saving for a LARGE trip would land us. About 5 years away. He said I could dream up the most amazing vacation I wanted and we'd made that our goal. I said I want to backpack around mainland Europe with our kids, stay in family hostiles and then take a cruise. My husband says that if that is what I want we can shoot for that, my parents think I am crazy and should plan to leave the kids home. We'll see. In the meantime it is super depressing that it is 5 years away, but at least it is something to dream about.
Lastly Thought Five-
When is this book going to end? I am already on board. I agree, this is what I need to do. Hearing everyone's stories aren't inspiring me anymore I'm just depressed, I need this book to be over- but no. It keeps going and going and going and it is taking so long that I am stating to wish my head would explode and then my husband could collect the life insurance and be out of debt (but would he learn the lessons we need to learn if it happened that easy), then again the pain of my head exploding would be better then this depression and trying to finish this book. All the stories talk about how "fired" up they were when finishing the book, but I am so depressed. What is wrong with me? Am I the only one who feels/felt that way? I just needed it to end so I could start moving on with life.

I love to take Cruises to places I've never been (was almost 20 weeks pregnant here)

If you're still hanging in here- Thank-you. I needed an outlet to let out these thoughts. I also wanted to show that I am not in love with Dave Ramsey's stuff. I quote it, I am using it, and linking it. But it is not because it is totally awesome I love everything about it- it is because he speaks hard truths and when things are hard like that and true you know you are in the wrong- "the guilty taketh the truth to be hard"- 1 Nephi 16:2. 

Why I'm here

First off I'm not starting this blog as a way to become one of those guru bloggers. Or even make a little cash from the traffic or advertising. I'm here to make myself and my family accountable.

My family of 6

My husband and I recently came to a realization. Yes we live well. We paid all our bills, we had money for things that we wanted- or at least that is what we thought. Whenever we looked at our finances, there was always this pile of debt that tried as we may to throw money at it wouldn't go away. We would buckle down and make meaningless goals and continue to throw money at the pile of debt, but the interest kept eating all that money. We would then give up, keep throwing money at it and pretend it wasn't there, and not talk about it. Just wishing and hoping and dreaming that throwing money would one day work and about all those things we wanted to do in the future "when we had money".
I had heard many of my friends and blogs talk about the book "The Total Money Makeover" by Dave Ramsey. And more specifically the "cash and carry" method he talks about and the "snow-ball" method of eliminating your debt and what Dave Ramsey is all about. But, there seemed to be something totally off to buy a book about saving money, in order to save money. My husband and I were having a finance conversation about money and our goals. I suggested that I had recently seen a friend post about how this book had changed her family's outlook on money. It had been a required reading for her accounting class. I mentioned my issues with buying the book to "save money" but my husband was actually more on board then I thought. That evening he got on his Kindle and purchased an e-copy. He spend all weekend reading it whenever he got a chance. He was all fired up and ready to get started- after I read it. I use to love to read. But as a mom I have the hardest time reading anything that takes me more than a minute to skim. Not to mention I read supeeeerrrr slow. But I knew our goals and dreams were going to stay out of reach unless we made some deliberate choices to change them. So I read it. Took me a whole week of trying to read every moment I could pull away from my children to read.

So here we are. Almost done with the first month of our total money makeover and it has not been easy. We have decided we are going to make sacrifices to reach our goals. Some of those include: canceling our Netflix account, canceling our summer vacation, making more things from scratch, no fast food or eating out for probably the next year... Just with anything when we want to show the LORD we are serious about a goal we show Him by making sacrifices. We've set up our budget and have our emergency fund, and even paid off my student load that was barely hanging in there. There are times I have wanted to cry, but it is my heart changing.
On a spiritual note, we are members of the Church of Jesus Christ of Latter-Day Saints, aka the Mormons.  We have been commanded to not go into debt, and if you are in debt- to get out of debt. For the past few years I have been telling myself lies- and didn't even realize it. Any time we were counseled to get out of debt I would tell myself "we're working on it" and convince myself it would happen. People it won't ever happen unless you are actively trying to do something about it with specific goals. Set the goals work to the goal, do it with purpose. I know my family isn't alone, just saying you are trying to pay off that debt isn't doing it.
On another note- I feel guilty that I help perpetuate lies, I am never going to find the people who I lied to and ask their forgiveness. I don't even remember most of them, and the sad part is I wholly believed the lies I was telling. Let me explain. I supported myself through college by working as a teller (and other positions) at some credit unions. Now I was born to goodly parents who lived debt free and taught me the evils of debt. They taught me how to make a budget and how to live within my means, and for the most part I did. But when I entered the world of finance- I met lots of people who told me differently. Lots of people who told me that debt can be good. Debt is needed, debt is the only way you are going to be successful. I bought into it hook line and sinker. I told myself that I could have a little debt. I would still be living within my means, I could make the payments. I can have a credit card -even my parents had a credit card- but my dad is one of the few people in the world who actually pay off every single penny with each purchase they make when they make that purchase. I thought I could be that disciplined. But it was all lies to myself. Lies I had become so numb to that I didn't even realize that they were lies until I was reading Dave Ramsey's book. In addition, I had given up on cash. When I was a teller, cash was something I "counted" out to other people. It was paper to me. I could touch up to $200,000 a day and it meant nothing. When I had my own cash I spend it like you should drink water and couldn't understand where it ever went. I decided me and cash didn't get along. I divorced cash for the sleek world of cards, that way I could keep tract and see every single little penny I spent. And at that time that actually worked for me. As a bank employee I could see and check my account 100 times a day. I watched every penny leave my account and be accounted for. Fast forward 9 years and I haven't worked in the finance work that whole time and I check my bank account online maybe once a week. Plus now their are two of us with drawling from that account, and we aren't always communicating on what and when we are spending money. So we've made some bad choices to avoid making other mistakes. Now I can't go back to my days as a teller and tell every person that I spoke to suggesting debt was the way to go and tell them how stupid I was. But I can now, right here say stop using credit cards, don't be afraid of cash, stop saying we can having it now and instead say we can save for it now and buy it when we have the money.  For everyone I knew as a teller I say, I am so sorry I tried to lead you down the unwise path. Please forgive me. And for everyone who is in debt just like we are. We can do it! We can get out of debt with sacrifice and with deliberate choices to pay off our debt.