It's over baby!

You know those people that are always negative and drag you down? Sometimes things are like that too. One of my "friends" has been like that for a little over a decade. At first it seemed like a good relationship. There were rewards and shiny things. I was surprised how quickly that thrill left. Now I feel exhausted after having to deal with them, I can't stand them. I figured out that I AM TIRED OF IT!! 

We finally got the courage and started to distance ourselves from them a few years ago. We still hear from them occasionally and they are still the same: negative, taking, and cold. In a few weeks Kristen and I will finally, after so many years, get to say “We're done Visa, it's over!”. No more of them taking from us, no more dealing with the stress of being a slave to that lender (Proverbs 22:7). This breakup is long overdue.

Don't mess around with credit cards. As smart as you are (hello, you're reading this blog) you're not smarter than the multi- billion dollar credit card industry. Why would they promote a product that would allow you to cheat their system? They wouldn't. It wouldn't make fiscal sense for them. They look shiny and neat and easy to use when in fact they are not user friendly at all! Here's what I mean.

Many years ago, Indian youths would go away in solitude to prepare for manhood. One such youth hiked into a beautiful valley. There he fasted, and on the third day he decided to test himself against the mountain. He put on his buffalo-hide shirt, threw his blanket over his shoulders, and set off to climb the peak.

When he reached the top, he could see forever, and his heart swelled with joy. Then he heard a rustle at his feet. Looking down, he saw a snake. Before he could move, the snake spoke: “I am about to die. It is too cold for me up here, and I am freezing. There is no food, and I am starving. Put me under your shirt and take me down to the valley.”

“Oh, no,” said the youth. “I know your kind. You are a rattlesnake. If I pick you up, you will bite me, and I will die.”

“Not so,” said the snake. “I will treat you differently. If you do this for me, you will be special. I will not harm you.”

The youth withstood for a while, but this was a very persuasive snake with beautiful markings. At last the youth tucked it under his shirt and carried it down to the valley. There he laid it gently on the grass. Suddenly, the snake coiled, rattled, and struck, biting him on the leg. 

“But you promised—” cried the youth. 

“You knew what I was when you picked me up,” said the snake as it slithered away.

A credit card is not your friend! A credit card is not your emergency fund! A credit card is not good for building credit! The card will bite you if you use it and you will be bitten over and over again. I have several friends that say they use the card and pay it off every month, then they always seem to add the caveat "but we got a little carried away the past few months". Now they owe the money and interest on top of it. 

Interest yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you. (J. Reuben Clark in Conference Report, Apr., 1938, p. 103). 

Friends, it is not a good plan to play with venomous snakes. It is also not a good financial plan to play with credit cards, they will bite you! 

Regrets

I was driving down the road the other day thinking about houses and debt and time. I did some quick math in my head* and figured that if we had just paid a few hundred dollars extra on our mortgage payment every month, we would have a paid for house.

Crazy.

We've been here in this perfectly perfect house for 10 years. Those few extra dollars would have made such a huge difference. To be 32 and 37 with 5 little kids and a paid for house... that's almost unbelievable.

We had that money every month but instead of being able to save it or put it toward the house we were spending it on who knows what.

Actually I do know, we were blowing it on stupid stuff or making Visa payments or sending it to the student loan companies. To think about it that way just makes me sick.

If we had been focused we could be out of debt.

If we had been smart we could have payed cash for Greg's education.

If we were determined we would have college funds for all our children.

But we weren't focused or smart or determined, instead we were just living what felt like a normal life. We didn't know there were other options. And that sucks. Sometimes I feel so frustrated and disgusted with the choices we made, it just makes me want to scream!

But then I take a deep breath and I vow to not have the same regrets in 10 more years. We're not perfect now and we haven't learned everything but we know a whole lot more than we used to.

I'm done with regrets, what's done is done and the only thing I can do is move on. We're working on getting out of debt and once we're out we're never coming back. Being obligated to some finance company somewhere isn't how I want to live my life. I'm over that!

*I ran the numbers when I got home and I was right; $400 a month would have given us the deed to our house. 

It's the little things

I had to write a short discussion post in response to an article in the Wall Street Journal. I feel so grownup with my WSJ subscription, never mind that it's only for this class and after the semester I'll cancel it and if I feel the urge to read it anytime after that I'll get it from the library, but for the next 2 months I'm a grownup!!

Wow, sorry about that, I get distracted sometimes. Like I was saying we were asked to pick 5 things from this article that resonated with our financial beliefs. Here are my takeaways. I also recommend that you read the article (you know, if you're a grownup and have a subscription), it has some good insights into financial behavior.

1. Keep it simple. History has shown that the most successful people are those that very simply diversify their investments. They don’t try to choose the most flashy and popular things, rather they look for things that have a proven track record. I invest my own portfolio in the same way with a simple mix of mutual funds. This is proving to be profitable.
2. Protect yourself from disaster. Soon after my husband and I were married we began purchasing term life insurance. We did not have any children at the time but we knew that if one of us were to go, it would leave the other with responsibilities that needed to be met. Since that time we have always carried insurance, gradually increasing the amount as we had more children and our other needs changed. Knowing that the other spouse would be able to carry on financially is a comforting feeling.
3. Make the most of what you have. A few years ago we were making very good money but somehow we were still late on payments and always scraping to get by. After a job loss and career change we are not quite back to where we were but we are always early to pay our bills, there is money in the bank for emergencies and we are making serious progress toward paying our debts. The difference is we are intentional with our money and we use it wisely. We know what’s important and it’s not stuff. The money that we have is to be used for the benefit of our family, not for momentary thrills.
4. Teach your children about money. Having 5 children means a lot of demands on my time. The list is always longer than the time I have and if I'm not careful I could spend all my time just dealing with the immediate needs. I need to be intentional about the way that we spend our time. I want my children to grow up to be successful, independent adults that I enjoy spending time with. A key to this is to teach them to be wise with their finances. We pay our children comission for work that they do around our home. They then divide this money into 3 categories; give, save and spend. They are learning that money comes from work and that there is great pride to be found in taking care of your own needs. That’s pretty amazing.
5. Share. This category of my financial plan is very personal and tied to my religious beliefs. I believe that God provides all that I have; health, money, peace, love, everything. In return He has asked that I give back a percentage of my increase. I do this because I believe in a loving God that blesses His children and only wants the best for them. I give because it’s a commandment but I receive so much more in return.

What's your favorite financial principle? Share in the comments, I'd love to know what works for you.

4 Walls

Walls? What?

Kristen, I thought this was about money and debt and that kinda stuff, not walls.

Before I lose you, let me explain. There's this guy, I talk about him all the time, you might've heard of him. He goes by the name Dave, last name Ramsey. Ya, he's awesome. Has completely changed our lives and he has this idea that he calls the 4 walls. Basically it's a way to prioritize things and to make sure that the essentials are taken care of.

1. Shelter. Rent or mortgage, whatever you need to pay to keep a roof over your head.
2. Food. Your family needs to eat. Sometimes that means you're eating ramen and (gag me) macaroni and cheese but what's important is that you're eating.
3. Utilities. Make sure the lights and heat are on and the water is running. That's important.
4. Transportation. Keep gas in your car and if you have a car payment stay current. Don't forget insurance either. You need to have a car to get to your job to pay your bills. Does that mean you need a $40,000 car? Uh, I'm gonna say probably not but you do need cheap, reliable transportation.

When Greg and I were out of work we had to make some tough choices. And using this 4 wall plan made it easier for us to focus on what was most important. Sometimes when you're looking at all of the bills due it can just be overwhelming. Especially if you have credit cards or other loans. After all if you miss a payment or pay late, you'll probably get hit with a fee and other penalties but you need to take a step back and take care of essentials first. It doesn't make sense to be current on your credit cards but to not have food in the house. I'm definitely not advocating ignoring your debts. Don't read that into anything I have ever said or will ever say, if you created the mess you'd better clean it up! But you do need to be wise when you have limited resources.

Take care of essentials and then work towards paying the rest. Little by little you will get things under control.

I promise.