Once upon a time I wanted to kill myself.
Seriously.
I was 19…maybe 20 years old…and had an amazing life. I was earning a ton of money working at a trendy dot.com in Dallas, living in a fabulous Dallas studio over a nightclub, driving a new Mustang convertible, had a personal shopping assistant at Nordstrom (who knew my name, my size, my style, and I’d go in once a week to get what he thought was new and best for me).? When the dot.com went public, my earnings would go into six figures (it never went public, by the way) and well, everything seemed to rock.
Except I was over $40,000 in debt.
I couldn’t pay my bills.
And as I drove to my nifty little loft I looked at the parking garage and wondered if it was high enough to kill me if I jumped.
No joke.
So that was ten years ago.
Five years ago, things looked a little better. Chris and I were newlyweds. I had paid off most of my debt…well, 75% of it anyway. We bought some new fancy furniture for our new fancy apartment because we wanted to keep up with the Pottery Barn lifestyle of the suburbs of Johnson County, Kansas. So we added a few thousand more bucks to the pool of debt.
And we couldn’t pay our bills.
And we’d take out payday loans to get us by.
(Don’t ever, EVER do that.)
So that was five years ago.
Three years ago, after having an expensive gall bladder surgery (which carried a hefty price tag of $12k) we sought help from a financial counselor. We negotiated all of our credit card interest rates. We chopped them all up except for two, $300 cards only to be used in emergencies (and to keep a credit line open which is actually good for your credit score). We saved. For the first time in a long time we tithed.? We still screwed up. We still took out pay day loans. But it was getting better.
So that was three years ago.
One year ago, we paid off all of our credit cards. We only have a couple thousand left in medical bills. We still have two stupid car payments, but we will drive these cars until they rot.
In the last year, we’ve made decisions that have cut our monthly expenses almost in half. Here are some (not all) of the things we’ve done. And keep in mind…this wasn’t an overnight flip (although some of them were). We prayed, begged, negotiated, bartered and we still will continue to ask how we can better manage our finances.
- DOWNSIZING! We’re moving in June from West Nashville to Franklin (a southern suburb of Nashville)…our friends own a cottage that they are leasing to us for a more than reasonable rate. It’s small. It’s 800 square feet. It has one bedroom. It has one bathroom. We’re losing a basement, a garage, an office, and a half bath. But we are gaining a good $300/month in housing expenses because of paying less for rent, having less square footage to heat and cool, and we don’t have to rent any appliances. (Oh, and 800 sq ft forces one to declutter. I hate clutter. We moved in with 35 boxes of stuff (and I realize that isn’t a lot). It’s my goal to move out with 25 boxes. Or less.)
- EATING OUT! We limit our eating out to one meal a week (of each). One coffee, one lunch, one dinner. Sometimes we share. And we always have leftovers. This saves us about $300/month from our typical habits. It adds up.
- NO SHOWTIME! We cut our cable plan to basic cable. This saves us about $50/month.
- HELLO? No home telephone. $30/month.
- WIFI NOWHERES! We used to have a wireless card. We don’t anymore. $30/month.
- GEICO GECKO! Shopped our car insurance. Saved $150/month.
- CUT THE CARDS! Did I mention no credit cards? Saved $600/month.
- CUT THE FAT! We don’t buy much junk food. Saved $100/month. And love handles.
- SHOP THE CELL! Upcoming in December: I’m moving to Sprint and getting a Blackberry. $20/month savings over my iPhone.
Total Cutbacks: $1580/month…$18,960/year
It’s not just about cutting back, it’s about managing the money we do have better. How is that money better invested?
- THE CHURCH! Kingdom resources. We are more free to give more and more often and in more places.
- COMPASSION! We are sponsoring three kids. Soon to be four.
- LIFE INSURANCE! I don’t care who you are or how old you are – GET LIFE INSURANCE. Chris and I have ridiculous amounts of coverage for about $30/month. If one of us happened to get hit by a bus, the other one would be taken care of for life.
- SAVINGS! We don’t have a ton, and call me stupid but I don’t think we need a ton. Having an emergency fund is helpful, but we don’t keep this fund super huge. There are needs right in front of us…so we try to not worry about the “what if.” God’s proven faithful. We hope to do the same.
So…a few of you have asked, and here is your long answer. Yes, we budget. Yes we have spreadsheets. Yes, we talk about our money all the time. We talk about purchases no matter how big or small. Communication is key for us. Being on the same page is key for us.
And I have to say the freedom it brings is…amazing!!!!
====
That’s an amazing story. It’s shocking what you can do when you aren’t a slave to the media and the perception they want you to live up to. When we take a step of faith towards God He always steps towards us.
Thanks for sharing the dark parts of your financial story. Inspiring and rewarding to read!
amen is all i have to say to that :)
Thank you for sharing this. I needed to read it today.
Anne, I have read a lot of stuff – articles, blogs, books – about finances and simple living and the rest of it. But so often the suggestions offered seem impractical or vague. This post was full of specific, doable steps – and I love it. Thank you for beign so transparent – and clear!
Awesome, Anne! Thanks for taking the time to put all that together. We’re in a similar place right now. Getting out of debt, driving 2 cars until they rot, trusting God moment by moment.
Blessings on your day!
I don’t know you, but I’m still proud of you! My wife and I have been working towards simpler living that equals more money invested in the Kingdom. I am currently reading The Total Money Makeover by Dave Ramsey – highly recommend it to anyone in debt (or even if you’re not!). Hoping to get debt free later by making tough decisions now. I hope your story helps others to get there too! Good job!
I like it. Common sense, hard work and a reality check. Thanks for sharing.
Thanks for your post. Congrats to making it this far. We are after many years finally taking the steps to getting out of debt. If we stay on track, in 4 years we will be free of all credit card debt, car payments, everything except our mortgage. We are in pretty deep, partly because of some years of not earning the income we projected, but still spending like we were. But we want to get out of this strangle hold on us. Right now it is tough. Husband is unemployed, I am self employed. Thanks for the encouragement.
Congrats, Anne! I know what you mean. Five years ago we were $60k in debt (with very little income), not including the house. Today we debt-free (not including the house). We drive two paid-for cars, no credit cards, and we’re on a budget.
How? Five years ago my sister-in-law tuned us into Dave Ramsey’s “Financial Peace University” (http://www.daveramsey.com/fpu). We’ve now lead 5 groups through it and have benefited in tremendous ways.
I agree – the freedom is priceless. Good job, Anne and Chris!
Daniel Goepfrich?s last blog post..Bible study resource
good for you Anne, good for you!
Jan Owen?s last blog post..What Can We Learn? or "You Must Be a Liberal Part 2"
Hi Anne,
My wife and I are working hard to get all our debts paid off so that we can commit to full-time ministry.
We recently started using a web service called ‘mvelopes’, which is basically an electronic way to use the envelope budgeting system.
So far, it’s been awesome. They offer a free, 2-week trial, and at this point, I’m recommending it to everyone!
Awesome! Thanks for the practical transparency. And thanks for the novel idea that it was YOUR and CHRIS’ job to bail you out. What a concept! And an example.
Andy Wood?s last blog post..Miracle Maker
:)
Crystal Renaud?s last blog post..Changing the World, One State at a Time
I came into marriage with school debt, car debt, and credit card debt. My wife came into marriage with no school debt, a paid-off car, and even savings. It was kind of a guilty feeling for me to drag her into my money issues but we have spent the past two years trying to make good decisions and put ourselves in a better position.
Now we are about to buy our first house and it is the most scary financial decision we have ever made. But, we have a great support system around us and we have spent a lot of time having honest conversations about what we want, what we don’t want, and what we *think* we can afford. We have also, spent even more time praying about it and consulting people who are older, wiser, and more experienced.
Money problems plague a lot of marriages (and lives in general) and we don’t want it to be an issue in ours. I’m glad to see that you all have made such good decisions and used this experience to draw the two of you together to fight the common enemy of debt instead of letting it pull the two of you apart.
Awesome – LOVE this post. My husband and I spent the first year of our marriage getting out of debt and while it was one of the hardest things we did – it’s SO FREEING now!
If you ever get the chance I’d love some more details – for example – where did you shop for life insurance – that’s something my husband and I need to get, but I’m TOTALLY overwhelmed about how much coverage, what type, what a good price is, etc. Thanks for sharing.
Laura?s last blog post..One More Bicycle
Anne – you are going to love smaller home living. My wife and I sold our 2700 sq.ft. home with more bathrooms than you could ever use and bought a 950 sq.ft. cottage in a small town 20 miles west of Milwaukee. We couldn’t be more content.
Still have room for guests and our kids whenever they decide to blow through. The only difference is that now their bedroom blows-up with an air pump.
It’s great! Nice going Anne – Jim
Anne,
What a cool description of how you guys manage the day-to-day. We too, like others who have commented, are Financial Peace University grads. That program helped us tremendously. I’m a never-had-a-credit-card-or-any-type-of-debt girl who two years ago married a has-had-and-has-every-type-of-debt-you-can-have guy. It has been hard work but refreshing to together slash that debt he brought with him to nearly nothing.
One piece of advice for you: I work for AT&T (sad to see your iPhone go!)… when you move to Sprint, do not sign a contract. Sell your iPhone, buy a Blackberry on eBay, and just sign up for service month to month. Too many people get sucked in by the phone prices offered for signing a two year contract and end up stuck in something. No matter which cell company it is, it isnt worth being controlled by them for 2 yrs and slapped with a $175 penalty if you need to make a switch.
Thanks for sharing this. My husband and I are trying to turn over a new leaf with our finances. It’s nice to hear that we aren’t the only ones struggling with this type of thing. Money conversations are so taboo. Thanks for being transparent.
Elaine?s last blog post..PT Cruisers Caught In The Act
Wow. Thanks for the reminder that all the changes I have made will make a difference. I am so far in debt I don’t even want to talk about it. Makes me sick. :(
Benji?s last blog post..Moving Week
Amazing!
danielle?s last blog post..squander
Congratulations Anne! Your story is shared by so many of us. The only thing I would add is that if you or any of your readers haven’t been through Dave Ramsey’s Financial Peace University, RUN don’t walk to the nearest church offering it and take it. Dave is awesome and you gain so much knowledge to help you make good decisions about life insurance, investing for kid’s college, etc…
Thanks again for sharing!
Randy?s last blog post..Check out the links
Hey Anne, I am a Sprint user, love Sprint and would encourage you to take a hard look at the new Palm Pre, it is coming out June 6th. I have the everything plan and it has saved me a ton of money. My HTC Mogul also double functions as a wifi card, so I have been able to use my laptop wherever I need it.
If the Palm Pre doesn’t have this feature, I might just upgrade to the next HTC because the wireless capabilites have paid off on it’s own.
Good Post.
This is seriously awesome. Congratulations on becoming financially free! Living frugally is so rewarding, but hard to do with societal pressure to always have the newest and best things. I can’t imagine the stress of drowning in debt or not paying off the credit card every month… :( Sometimes I’m grateful to have grown up relatively poor, I have no expectations or feelings of entitlement for material things!
Love your post. Thanks for sharing your plan with us.
Tammy Marcelain?s last blog post..Cutest Necklace EVER!!! / Gas Bargain in ABI
Yay! You are brave for making these choices and it rocks to have the freedom to give when and where you feel led, rather then having to check to see if there is resources to cover it when the need arises. This is awesome and I think it is so stinking rad that you are preparing to feed some more kids!!! Seriously.
kristiapplesauce?s last blog post..Monday Prayer
Thanks for this. Our household is so there right now. We recently started a bailout plan of our own. Great to know that we’re not the only one’s and that it is possible!
Loved your bailout plan, and that you are already feeling the freedom!
It took us almost 2 years to get out of debt (except for our mortgage), and I wouldn’t trade the peace and freedom I feel now for anything! Keep plugging away at it and you will continue to be changed.
I want to add that we never made any good progress until we committed to our tithes and giving. Our new motto is that “we can never ever outgive God, but it sure is fun to try!!! ”
Jen?s last blog post..Interestingly Enough
We are finally free from credit card debt after 12 years together (9 1/2 married). It is amazing!!! We will be car payment free within 2 years and mortgage free within 10 years (the goal is 10). What this did for us was allow us to save, pay for Christian school education for our soon-to-be Kindergartner, be charitable, and to help family or friends that need it. We treat ourselves to some fun stuff too (laser hair removal for me, fishing trips for the hubs, balloons at the dollar store for the kids). :) We buy and sell a bunch of stuff on Craigslist too, which is the best online garage sale I’ve ever seen. We are thrifty. I think some of our circle O’ friends believe we spend willy nilly cuz we get some fancy stuff from time to time (front loading washer/dryer, plasma tv), but what they don’t know is that we pay cash or we don’t buy. It’s that simple. Good for you Anne and “the hubs”. :)
Heidi Reed?s last blog post..Don?t Cry Over Spilled Poop
Reading your accomplishments brought to mind lots of what happened to us. We actually started a lot like that – were doing well – and then God decided he was going to teach us what kinds of things happened to a lot more of our “neighbors” than we’d ever thought. So he threw one thing after another at us. (Am very glad he was in control, just as he was with Job.) Anyway – the highlight (lowlight?) was that our family of four ended up living in a small tent trailer for six years. But through all that he vividly taught us how important “loving and helping our neighbors” is. And to relate to the people we read about losing jobs and homes right now.
Way to go, Jacksons!
My parents raised us to avoid debt at all costs. We picked the colleges that gave scholarships, saved for cars, and only use credit cards for real emergencies. As a student, I didn’t really understand it, but as an adult, I am profoundly grateful for the gift they gave us. Living within your means and giving away as much as you can is the only way to do it.
Texas in Africa?s last blog post..had enough
Bravo, bravo, bravo!
Financial changes–big or small–are to be applauded.
It took my husband and I years–YEARS–to fight our way to common ground about money. To realize we didn’t want debt, we didn’t want credit cards, we didn’t need a lot of things we thought we did.
We haven’t used a credit card in 4 years–although, I confess it took me a year or two to finally cut up that last card. It just made me feel safer having it. We have a budget we tweak … and tweak … and tweak. We increased our tithe, when I thought it just couldn’t be done. And we just adopted our first Compassion child.
Now we’re trying to pass what we’ve learned onto our adult kiddos–and one much-younger, surprise caboose kiddo. They’re learning to avoid debt a lot sooner than we did.
I’ll end with another shout-out for Dave Ramsey’s information. That guy made me laugh about finances!
I second that feeling of freedom upon getting out of debt. Last year my wife and I hit it crazy hard and did it. Now she is in school (paid for with cash) and working towards a masters degree. Just the other day we were discussing this and she had this incredible thought. She realized that when she graduates she wont HAVE to get paid for what she does. That will free her up to explore other options than the ol’ get a job routine. How exciting is that? Amazing how EVERYTHING changes when you aren’t a slave to debt.
Kenyon?s last blog post..Craigslist Update 5/18/09
Yay for the honesty :) Thank you for sharing that. It’ll definitely help a lot of people.
This is a very fine post. I appreciate your willingness to mention the specific steps that you have taken. I think this will be helpful to many who read it. I know that it caused me to think about my own spending.
amazing stories – thanks to all for sharing
simply put – satan’s greatest tool in this day and age is money. look at our economy, and try to agrue that point. – debt and greed is what got us here. and no matter what the ‘change’ man says, it’s not nearly over
i’m not old enough (thank you Jesus) to have lived the Depression, but I did live the last great recession of the early 80′s that was also caused by total greed in the commercial sector. It was the most, until now, profitable time of my life. real estate was 50cents on the buck, so i bought a house. barely used cars were dirt cheap, etc., etc. if you had cash on hand at that time, even $10,000, you could be very, very comfortable in ten years if you made smart money choices.
the point here is not ‘how to get rich’, the point is if you have cash now, hold on to a good bit of it, you may need it. if you do spend it, always look for the return involved – if you’re young, your return has a long time to come to fruition – buy a car (only if yours doesn’t run hardly at all) and maybe buy the things you really need. but more importantly, invest, invest, invest, invest, invest. maybe not stocks – but invest in a refi, a piece of real estate, or more than all of that, use your cash to invest in the Kingdom – my financial advisor (also a well-known author) tells me it’s the best investment of all – and He’s not been wrong yet.
Loved this post! Dan and I are at this very moment doing the same thing..trying to figure out our finances and get in better shape. This experience has been completely humbling….but very worth it!
Tiffany?s last blog post..Oh Sweet Cupcakes!
Amen sista! That is awesome. We’re in a similar boat. Bad choices from years ago that took years and years of work to slowly dig out of. We’re now in the process of doing more with less. It’s true freedom. I love it. Teaching our kids to do the same. Small is the new big!
Daniel Decker?s last blog post..The Making of a Best-Selling Book: What the Best Do Better Than Everyone Else
If only every young person/married couple could hear a testimony such as this. If every young person/married couple could see into the future about 15 yrs and how great it would be to not have to worry about medical debt, loss of job, car payment, etc. Start a savings plan EARLY and refuse to buy into the trappings of trendy crap. How I wish Dave Ramsey was around when I was 30ish.
I “get it” about money now & realize the less debt one has the more they can give away. Exactly what I’m teaching my kid.
Dave’s mentor was Larry Burkett – Larry was around 40 yrs ago saying the same thing as Dave.
WOW! Thank you so much for sharing the good, bad & ugly. I am currently engaged & my fiance and I are constantly discussing how we will handle our money. This post has provided me with great insight, foresight, warning, but most of all, a Wake Up Call! Thank you so much.
Anne, that could be one of the most insightful things I have ever read on finance and I have read a lot. I even met Dave Ramsey in person but that might just top them all. (Sorry Dave)
This was also exactly what I needed to read today. I mean exactly. Never quit sharing your life with us. I have to tell Sherry to read it now.
Harold?s last blog post..A Couple Making The Difference
YES. Big fan of simplifying, decluttering, deexpensifying, and making up words.
Our family of three moved from a 1100 sq ft house to 200 sq ft studio apt. I’ll conveniently leave out the part that the studio was in Manhattan and cost twice our mortgage, but that’s the cost of chasing some sort of dream. By God’s grace, we have no debt other than our house.
Congrats on the debt-slashing and encouragement to so many others to follow your steps.
cool dad?s last blog post..Do you sign off emails with a Christian closing?
good stuff.
so proud of you and inspired by you. we’ve always been fairly smart with money, but this economy and my sales career went belly-up together and we are struggling and it is so unpleasant. i’m dreaming of the day we’ll be debt free.
Melissa?s last blog post..Processing
I live in Johnson County and I know exactly how you feel (except that I have a third-world mentality and resist buying into the Johnson County lifestyle… but it’s HARD!) I’m curious where in JoCo you lived??? :-)
Thanks for the gallbladder symptoms information. Definitely helpful.