For us to get a handle on the debt we had accumulated, we had to admit we didn’t know how to properly handle money and our bills. We had to acknowledge we had been making choices through the lens of living in the world instead of through God’s plan for our lives.
We asked God to help us get ourselves back on track and 2 Peter 1:3-9 (The Message version) seemed to be a good starting point for us:
Everything that goes into a life of pleasing God has been miraculously give to us by getting to know, personally and intimately, the One who invited us to God. The best invitation we ever received! We were also given absolutely terrific promises to pass on to you–your tickets to participation in the life of God after you turned your back on a world corrupted by lust.
So don’t lose a minute building on what you’ve been given, complementing your basic faith with good character, spiritual understanding, alert discipline, passionate patience, reverent wonder, warm friendliness, and generous love, each dimension fitting into and developing the others. With these qualities active and growing in your lives, no grass will grow under your feet, no day will pass without its rewards as you mature in your experience of our Master Jesus. Without these qualities you can’t see what’s right before you, oblivious that your old sinful life has been wiped off the books.
Things we had to have to become debt-free: spiritual understanding, discipline, patience, wonder, and love. I understand these verse aren’t necessarily talking about money, but our focus was so out of line, we needed an intervention only Jesus could provide. Paying off debt can be done without Jesus, I’m sure. But eventually you’ll end up right back where you started if you don’t do a major inside transformation also. And for us, that meant living by God’s standards and not the world’s.
We’ve used some form of a budget since we got married and combined our incomes. Before we decided to aggressively pay off our debt, we used the budget to plan out what bills were due when and then see how much money we had left to do whatever we wanted with. Which sounds funny to say, because if we wanted or needed something we didn’t have money for, we just charged it. But we had a loose outline of what money was coming in and where it needed to go.
What changed with the budget is we now planned where the money would go each paycheck, what money would go directly to our savings, and what debt we’d pay down with the extra instead of looking at that as money to spend on whatever. So things got really tight really fast.
I made a list of all our monthly expenses: credit card bills, student loans, medical bills, utilities, groceries, gas, tithe (we’ll talk more about that tomorrow), mortgages, child care expenses, cable bills, gym membership, etc. On the list, I also wrote down when the payment was due each month. Chris got paid every Friday and I got paid every other so I looked at the calendar, wrote down when our paychecks came in and how much, then just figured out when each bill needed to be paid for the month and where it fit best with the money we had coming in.
Once I established the pattern, I went back and figured out where our extra money was and planned exactly where the extra money needed to go. Instead of that money being for eating out or movies or random trips to the mall, we had a specific plan for the extra income. We followed Dave Ramsey’s advice of starting with the smallest debt and put all the “extra” money toward that. Then when we’d pay off that small debt, we’d take whatever money we had been paying (the monthly payment plus whatever extra we had budgeted), and go after the next bill.
This takes time and discipline. Seeing the occasional bill go away and not wanting to spend that money or celebrate with a buying something new is hard. Occasionally we lost that battle, but more than not, we just kept trucking along. Praying for patience and focus is greatly encouraged during this process.
I have a binder where all our bills, budget stuff, and income trackers go. I kept a list of all our debt inside and as we paid something off, it got marked off the list. If we had extra money show up, we also knew exactly where it was going and weren’t (for the most part…) tempted to spend it on something besides debt. In the summer when Chris worked more and I was home so we didn’t have any preschool/daycare expenses, we made major dents on the debt. Every year tax season rolled around, we sent our refunds directing to Sallie Mae or the bank to pay off our car loan. If we were gifted money at Christmas, it was put toward a bill. We also made sure to save part of my paycheck; we had to work on building our savings so if an unexpected expense came, we didn’t have to use the credit cards we were trying to pay off.
Building a cushion in the bank and paying off debt takes time. I remember at one point after Ellie was born, some men came to our house offering to trim the almost-dead trees we had in our front yard. They also said they could treat whatever thing was killing them all for the low, low price of $100. We had been wanting to get the trees trimmed and were hoping to save them (they were huge and old and at one time, beautiful; we didn’t want to have to cut them down) so we agreed. Chris was handling all the dealings with them and ran to the bank to get cash from our savings account to pay them because they didn’t accept checks or credit cards.
I was busy with Ellie and didn’t pay much attention to what they were doing and soon Chris had paid them and they left. Later, I looked at our trees and couldn’t tell they had been trimmed at all. I asked Chris about it and he said they cut down about two branches, sprayed something that looked like Windex at the base, and then asked to be paid. Chris who is the most non-confrontational person in the world, didn’t question them about what they did, just paid them, and then they took off fast.
Obviously, we had been conned. They did absolutely nothing for our trees and we gave them one hundred dollars. I was so mad and so frustrated. We didn’t even have $400 in our savings account and we had just given some random guys $100 for nothing. I cried most of the day about this. I was mad at Chris. I was mad at myself for not getting involved. I was mad that we didn’t have any money.
I felt like we were never going to get anywhere with our debt, never have extra money, and never make wise financial choices. It would have been really easy to quit every time something set us back. AND SO MANY THINGS SET US BACK. But we just kept going, even when I felt hopeless and couldn’t stop crying. Even when we were, apparently, just giving away what little money we had.
We had a plan, we stuck to it even when things seemed endless, and trusted that God would take care of us while we tried to live within his rules for our lives. Nothing came easy or without heartache. Nothing came quickly or without challenges. But we just kept going.
Here’s a quick look at my budget binder. I have had some form of this since we got married, but the set-up has always been pretty much the same:
Will this set-up work for you? Maybe. If it doesn’t, figure out what will. Each week when I go to balance our checkbook (you do that, right? It’s kinda important…), I get out my trusty binder and follow the plan. Plans are great, but if you don’t actually follow them, they’re just a waste of time. Even now, with no credit card debt or car payment to make, we still follow our weekly budget for paying bills, saving money, and spending money. Paying off debt is great, but learning new habits you actually continue to use after the debt is gone is important too. I really don’t want to have to pay off debt again.
The rest of the series:
Debt-free living: sacrifices and tithing
Debt-free living: where we go from here + resources