When Rick and I were young, we got into debt. It was so easy to do. When I graduated from college, companies sent me credit cards. As newlyweds, we needed just about everything essential. We “needed” other things, too; nice dinners out, mini-vacations, sporting events, etc. It wasn’t long before all we could afford were minimum payments that would never pay off the primary debts we had accumulated.
We were fortunate to have parents who loaned us enough to pay off our full debt, so we could pay one larger payment back to them and be debt-free. We cut up all but two credit cards. One had to be paid off in full net 30. The other was locked away for emergencies only. We have not paid finance charges to either credit card company in decades. (Incentive comes from looking at finance charges and imagining where that money could be better spent.)
When we came to Christ, that life-changing decision included how we handled money. As a step of faith, we started to tithe our church. Before we made that decision, we never felt we had enough. After we made that decision, we always had more than enough. As the years have gone by, we’ve been able to increase the percentage, and love the opportunity to help others through giving to established, proven organizations.
We started saving for “a rainy day”. The goal was six months of living expenses. It took time and discipline to accumulate that amount, but it is there when we need it. Add to that saving for retirement. Years pass quickly!
Buying a home was the biggest, longest-term and most frightening debt of our lives. Even though I had a job, we only counted Rick’s salary when applying for a loan. We saved toward a 20% down-payment. We put every extra dollar into “principle only” on the mortgage payment. (It’s much easier to do that when you did NOT count the wife’s salary in applying for the loan.) Our goal was to pay off our home in ten years rather than pay interest over 30 years. (If you ever look at how much you pay if you take that long, you will be appalled!) Paying even small extra amounts make a big difference over time. Our first home was in a ghetto. We moved on to the suburbs, and now live in a nice house with a small vineyard on the edge of town.
We made sure each of us received an equal “allowance” to spend any way we wanted. Even small things can be fun boosters. Having a little promotes creative spending.
Know that with planning and determination, you can live debt free. Read through Proverbs for valuable tips on how to handle your money now.