It felt impossible. But we just did it. Debt free.

“Don’t worry. I’ve got it taken care of.” I said.

It was 2009, probably around February or March. My fiancé was double checking with me that I had reserved the bed and breakfast we were staying at for our honeymoon. And I had. They had my credit card info on file, so that after that exciting day in May when we got married, this place could be our first stop. It was going to cost us about $200 for that one day.

The second place, where we would stay two days, would cost us about the same, $200 a day. It’s a bed and breakfast. It’s nice. And they had my credit card info on file.

Not my main credit card, mind you. That one was maxed out at $8500. I had to pay it down just to keep it from hitting the limit. No, this was a different credit card…I had successfully paid the $2000 one down to $1400, so that I would have room to pay for our honeymoon (thereby maxing it out again). To this day, Sarah says “If I would’ve known, it would’ve stressed me out.” Or did she know? I don’t remember.

 

What I do remember is how that debt happened, and how it felt.

 

It was 2000. The summer before my freshman year of high school, I got a job. The taekwondo school I went to? I was hired on as an assistant instructor. Which meant I got this amazing thing called a paycheck.

However, the paycheck had a problem. It only came once a month. And near the end of the month, it was GONE. In fact, if I spent it too fast, it was gone halfway through the month. Crap. So at the end of the month, or for the last half of the month, I had to learn to do something hard: I had to say NO to what I wanted. Which was hard.

 

Then, in the end of 2003, something amazing (but not really) happened. I got a credit card, one that was ONLY for use in emergencies. I actually never used it, it was just there…

…until one of my family trips to Washington D.C.. That was when I thought: “I know I’m out of money, but why don’t I get just a few games for my Game Boy Advance for the flight? I’ll pay it off.” And I did. And I paid it off. $100 worth of games.

Then I did something like that again. $300. I forget for what. And I paid it off.

Then, I did something like that again. For about $300. But this time…I was only able to pay off $200 that month. So I had $100 balance.

Ran out of debit card money. Began spending credit card money again. Balance up to $300 again.

Paid off $150. Spend $300 more.

You see where this is going.

 

It was summer of 2007. I had to learn something that I hadn’t had to do since I was 18…I had to say NO to things I wanted at the end of the month. Although at 18, it was because I ran out of money. Now, at 21 years old, it was because I had hit my limit, and they had stopped raising it. The difference was that at 18, they weren’t charging me $241 dollars a month. Now, they were. Stupid interest.

It was depressing to look at, but this is my problem. No one else’s. I will figure this out.

 

It was January of 2008. And I am about to have the scariest conversation of my life. You see, my new girlfriend (we had been dating since November) knew about my relationship history, the good and the bad. That was hard to tell her. But this? This was by far harder. And I don’t even remember how I did it. Somehow, I did. But man, I don’t remember how.

I mean, maybe it would go like this:

“Hey, Sarah, I’m really into you. I love you. By the way, at only 22 years old I happen to be about $12,000 in debt across three credit cards. And I haven’t even mentioned student loans.”

“Oh, how did I do that, you ask? Did I fly across the world and donate large sums of money to the helpless and needy? Is that why I’m in debt? No…it’s primarily from fast food and video games.”

“By the way…please don’t leave me…”

Last summer, it was my problem. But now? As long as Sarah stayed with me, it was our problem. She could’ve escaped if she wanted to. Thankfully, she didn’t. But showing her my debt? Scariest thing I’ve ever done in my life. I am not kidding.

 

September. 2009. We had been married for about 4 monthsAfter we were gifted Dave Ramsey’s Financial Peace University, we decided to go through it together before going to the “official” class. And we had just finished the lesson on debt. So Sarah went and got her one credit card that she had.

“Let’s cut it up!” She cut up her credit card, and put it in a jar. “How about you?”

I didn’t want to. At all. For some reason, the card felt like it was my freedom to spend money when I wanted (Freedom. Ha. What a joke.). But Sarah stared at me with this “I did it, now it’s your turn!” look (By the way, her card had a 0 balance and she basically never used it). I mean, I couldn’t say no. I didn’t want to cut it up, but I did. It hurt.

Yup, Sarah peer pressured me into it. Never wanted to do that. But I did. I cut up all three cards.

So from that point forward, I went through the difficult discipline of learning how to spend only $40 a month on “impulse” types of purchases, like fast food or whatever. And that was HARD to learn.

 

It is now February 10^th, 2016. By a series of small decisions of discipline, with God’s help, and because my wife is a ninja at this sort of thing, we just paid off the loan on our minivan.

Sarah’s $6000+ of student loans is gone.

My $7000+ of student loans is gone.

The $8500 that my used car was on? (Which kinda turned out to be a lemon anyway) Gone.

The $8500 from the other card I was telling you about? Gone.

The $2000 from that first card? Gone.

We also owed about $600 to Best Buy. But that was the first thing we killed.

$10000 of medical bills for Abrielle’s C-Section. $2500 for the homebirth that never happened because of the transfer to the hospital. $2500 more to pay the deductible for Alsea’s birth. A surprise appendectomy…I don’t remember how much it cost.

So that $3000 loan that we pulled when my car went belly up and we needed to get a minivan? We killed it today. And it is the last debt to die.

 

As of this morning, we are debt free.

 

Back in 2009, we had 6 things that demanded minimum payments from us. So if we only made minimum payments, about 500-600 of our income was claimed by our debts. We looked at it and thought “What could we do if we didn’t have to pay that 500-600 every month? What could we do with that?”

As of this morning in 2016, that money no longer belongs to U.S. Bank, or Household Bank, or Selco, or Mohela, or Edfinancial. It belongs to us, for us to do what we believe that God would have us do with it. We can give to others, as God wants us to, or we can enjoy this world that God made, as God wants us to (what, did you think God put us here to be sadsacks?). Or a little of both.

 

Praise be to God, and those who teach others His wisdom. We have benefitted from learning that wisdom from others.

Freedom from Freedom: Financial Freedom

Remember our thesis: We often find freedom in the exact opposite direction of freedom (dare I say…always?)

And I can think of no more practical example of this than on the topic of finances.

In order to illustrate this point, I need to tell you about my history.

Back in the summer of 2000, I was hired by Karate for Kids. I had assisted with classes as a member of the SWAT team (Super Winning Attitude Team. We were the “demo team” and the “help out with classes” team all in one) for a few years when I was hired on as a staff member. My job: Assist with classes. Mr. Lyon would teach the main group. I would teach the kids that had missed some classes and needed catching up on their form. I was 14 years old at the time.

Along with this first job came something interesting…something I had never seen before. It was called a “paycheck.” It would actually go into my “bank account.” I never had an allowance growing up…so if I wanted anything, I had to ask for it, and my parents would say “yes” or they would say “no.” But now…for the first time ever, something was different. This money was not given to me. This money was earned. It was not a gift. It was mine. No one got to tell me how to use it or spend it. I had freedom with it.

Now, at 14, I had been enjoying the world of “video games” for about 8 years at that point. But since I didn’t have an allowance, the only way for me to acquire these video games was to ask my parents. And Mom didn’t understand…she would say these nonsense things like “Why do you need another game? You have all these other games to play.” Yes, mom, but this is Metal Gear Solid. None of these other games are Metal Gear Solid. Why do you not understand that?

Regardless, usually around every birthday or Christmas was the only time I would get a new video game. And then, it was never the newest game out or anything like that.

Now, I enjoyed them. And I’m not complaining…those games were a lot of fun for me, my sisters, and my friends. But I am telling you this story so that you can truly understand how much my world changed when I acquired my own paycheck.

But then, something interesting would always happen with this money. Strangely, I found that when I spent it, it would no longer be there. And if I spent it too quickly, my life would involve one week of joy, of getting the video game I wanted, of getting the fast food I wanted, of buying food for friends as well…but this week would be followed by three weeks of being “broke” and waiting for that next paycheck.

For the next four years, I would endure that cycle every month. Get paycheck. Be excited. Spend it. Be broke. Get paycheck. Repeat. Sometimes, I would spend it more slowly than others.

Let’s word it differently…at the beginning of the month, I could say “Yes” to whatever. At the mid to end of month, I would have to say “No.” Until something magical happened.

In 2003 or so (I don’t exactly remember), I got my first credit card.

In fact, I could get a laptop at Best Buy, and have it paid off in 18 months with no interest. My mom was cautious…but the first thing I did was make an Excel spreadsheet and show her how I would pay it off. Impressed, they let me go through with it. Eventually, I would succeed at paying it off in about 15 months. Three months early. Get some.

With this Best Buy credit card, I was sent an affiliate card. HSBC. $750 limit. I didn’t use it, but I had it.

Along with that, U.S. Bank (my bank) advertised a student credit card. I got that one. $1500 limit. I didn’t use it, but I had it.

Until I was about to leave for a trip to Washington D.C., and I knew I would be on the plane for a while. So I bought three Game Boy Advance games. On the credit card. I would pay it off later.

Let me tell you exactly what happened in that moment…my life before that moment involved me saying “No” at the end of the month. But now, I didn’t have to say no. I had the freedom (notice that word) to say “Yes,” as long as I paid it off next month.

Over the next six years…the pattern looked like this. Want stuff. Spend debit card account (actual money I have). Run out. Spend money I don’t have. Rack up $300 of debt. Pay off $300…balance now zero. Good. “I pay it off every month” I would say. Then, rack up $400. Pay it off. Balance zero. Rack up $400 again. OOPS. Because of time off, paycheck doesn’t supply me enough to cover that. Pay off $200. Credit Card balance: $200. Better take it easy.

Run out of debit card money. Rack up $300 more. Balance: $500. Pay $300. Balance: $200. Rack up $400. $600 total, right? Pay off some, rack up some more. Do you see where this is going?

Hit limit. Credit Card company raises limit. Wow, thanks, Credit Card company! You are such a helper.

Limit: $3000.

Limit: $4500.

Fast forward…

Limit: $8500. And they won’t raise it anymore. Interest every month comes out to about $240. JUST in interest. And guess what…I hit my limit. In order for me to spend more, I had to pay it down.

And for the first time since before 2003…I had to go through the experience of HAVING to say “No” to something, because I had no way of saying Yes. But the different was that this time, I would lose $240 every month, even if I didn’t buy anything at all. And when I had to say “No” to something because I couldn’t say “yes” (because of my credit limit), I suddenly realized something…I hadn’t felt that feeling since before credit cards. There was a “feeling” of freedom. Freedom to look at something and get it. Freedom to not have to walk away without it. But that “freedom” did not result in freedom, now, did it?

“Well, whatever.” I thought, back in 2007, looking at my online account balance. “This is my problem, not anybody else’s. I will work myself out of it.” However, something happened. A game changer. I started liking this one girl at Corban. And, amazingly enough, she started liking me back. And then, I realized that at this age (22, to be exact), this might not be another “dating” relationship. This could very well actually result in marriage.

And then, when I looked at my debt…well, this was no longer “my” problem. This was “our” problem. And when I mustered up the courage to tell her how much debt I had accrued, I felt pretty ashamed.

Oh, she told me that she had debts, too. Sure, Sarah, but YOUR debts are from student loans. Ask me what my debts are from.

That’s right, video games and food.

So, the result of my financial freedom was this: I brought approximately $15,000 of debt (three credit cards and a car) to my marriage. I cleared up just barely enough to put our honeymoon Bed & Breakfast on the card.

As the story goes, my taekwondo-instructor-slash-boss got my wife and me the Dave Ramsey Financial Peace University course as a wedding gift. Cool…I thought. Kinda.

We went through it by ourselves, at first. Sarah peer pressured me to cut up my credit cards. I actually didn’t want to do it…but she cut up hers right in front of me (Whatever. She had a zero balance on it. Big whoop). And what kind of addicted, pathetic loser would look at her and say “Hey, nice job cutting that one up. I think I’ll just keep mine, though”? So I did it.

We budgeted. I had $40 of “blow money” in my court every month. I went from doing whatever I wanted with about $1300 to $1700 (imagine all the Taco Bell) to doing whatever I wanted with $40. Needless to say, that was hard. Really. Freaking. Hard.

Financial freedom? I had never felt so financially un-free in my life. And I was working just as hard as I always had. Harder, actually. $40. Not even enough to buy one new video game. (Sarah and I would budget a game for me, every now and then.)

That was 2009. We started the “debt snowball” You Dave Ramsey people know what I’m talking about. Since the battle with debt is an emotional battle, not a logical battle (If we were logical, we wouldn’t rack up that debt to begin with), the debt snowball involves paying off the smallest debt first so that you can take what you would’ve paid towards the smaller payment and pay it towards the next one. It makes you feel like you’re making bigger payments, and gives you smaller victories, FASTER. And that’s important in that game.

Two and a half years later of us working hard, not spending much, and God’s blessing and providing, and we paid off all three credit cards and the car. We now have further to go…about $11,000 in combined student loans. But if we can pay those off…it means that every month we will need $183 less than we need now. Might sound small…but it might not. If you put $183 in my wallet every month, I’d freak out. And hug you. So yeah, it is a big deal.

So where to after that? Well, let’s take this a step further. Debt means freedom now, restriction later. Paying off debt means restriction now, freedom later. Investing takes that one step further.

Imagine this. Like, seriously, imagine this: Having invested enough so that your investment makes more for you than you make for you.

You could sit there and do absolutely nothing. And feed your family and pay all of your bills.

“Why, Carson, doing nothing is lazy. Laziness is bad.”

Oh, well, how about this: Go to your church and volunteer for whatever you want to volunteer for, with no time restrictions. Teach what you love to others, whether it’s Taekwondo or Snowboarding or Tennis because you want to. Or use your assets to pay your bills, and use your paycheck to feed homeless puppies. Or invest more, so that you can feed entire countries of homeless puppies. I don’t know.

As I mentioned, freedom is found in the exact opposite direction of freedom. I can think of no better example than finances.

VERY IMPORTANT P.S. – MONEY AND FAITH DO NOT CONTRADICT, BUT THEY WILL IF YOU LET THEM.

Biblically, debt is unwise and investing is wise. I believe that because…

1. It’s all over Proverbs, and
2. Jesus uses investing as a metaphor in some of his parables. Now, the parables were meant to illustrate other things, but I take this as an indication that Jesus is okay with investing. I could be wrong.

We should be wise with our money, but we should NEVER place our faith in money. Money can do a lot, but it cannot do everything.

I believe that God will call one person to obey Him by investing. Those investments should be placed under the Lordship of Jesus Christ. Do not EVER fall into the trap that investing will “enable” God to work through you, or that investing will “enable” you to do more for the kingdom of God. Obeying God will enable you to do more for the kingdom of God. Period. God could drop a billion dollars in your lap, or burn up a billion dollars.

God calls one person to obey Him by investing. He calls the next person to obey Him by selling everything He has. He calls one person to obey Him by leading a megachurch (Rick Warren, Mark Driscoll). He calls the next person to be a missionary in the 80/20 window (the middle east) and be martyred for their faith…their names never to be known in history by anyone but their family, their few friends, and God Himself.

Obey what God calls you to do. If you are pursuing God by prayer, Scripture, and fellowship, and you receive no indication, no “Spirit-signal,” then just keep doing what you’re doing. I do not think God often micro-manages, but if He calls you to sell everything you have, please don’t say to God “But Dave Ramsey says I have to invest!”

ONE LAST P.P.S.

Remember…how you get money is a matter of sin or not sin. (If you get it by stealing and lying, that’s sin. If you get it by honest work, that is not sin.) What you do with that money is a matter of wisdom or foolishness. God has placed that money under your care, as God’s way of providing for your needs, your wants (God actually does bless people and wants them to have what they want sometimes, just like any parent!), and His kingdom. So use it wisely.

OKAY, THE FINAL P.P.P.S.

It is very easy to think “Wow, where would I be now if I hadn’t squandered all that money? What if I had never gone into debt, and had just started investing right then?” Sure, daydreaming about that might be interesting, but what’s that saying that every middle schooler is saying? YOLO? You only live once? I’ll never have the chance to go back and fix that, so what good does it do dwelling upon it?

Thinking about that is cool, I guess, but regret is a stupid place to be. Let’s move forward…as opposed to thinking “What if I could move backwards?” Starting this at 18 would’ve been better than starting this at 27, but starting this at 27 is way better than starting this at 28.

Money and the Christian: The “Money is not Important” image and credit cards

As you know from my last post, I do not believe that credit cards are wrong, nor do I believe that they are sin. I believe that the way that they are used by most of America, they are unwise. There is nothing wrong with paying 20 dollars later in order to gain a 10 dollar item today, but in most all cases, it is better (simply looking at the numbers) to save up money and spend it when you have it, rather than to spend money you don’t have and pay extra on it later.

Now many disagree, of course, and they are not without legitimate reason to disagree. But regardless of the why, credit cards have added an interesting dynamic to the “money is not important” end of things.

And here is that dynamic: A Christian can now say: “There is more to life than making money…I shall put my family first, and making money second.” However, the problem is that we can BUY things before we worry about MAKING MONEY. Thus, there is a reality of somebody who does not prioritize making money (because there are more important things to life than making money) but does not apply that to denying himself/herself of something that they want and saying no to something that they want to say yes to.

Thus, a better philosophy is not “put family first, then making money after that” but “put family first, then possessions after that.” In all honesty, making money is sometimes how you put family first, by going to work when you want to stay home.

So wherever you stand on credit cards, whether they are good or bad or whatever, this is a statement that I hope all can agree to: A Christian, while here on earth, should produce more than they consume. As C.S. Lewis put it, there should be “no passenger or parasite.”

 

2 Thess 3:6-13 (NIV)

In the name of the Lord Jesus Christ, we command you, brothers, to keep away from every brother who is idle and does not live according to the teaching you received from us. 7 For you yourselves know how you ought to follow our example. We were not idle when we were with you, 8 nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day, laboring and toiling so that we would not be a burden to any of you. 9 We did this, not because we do not have the right to such help, but in order to make ourselves a model for you to follow. 10 For even when we were with you, we gave you this rule: “If a man will not work, he shall not eat.”

11 We hear that some among you are idle. They are not busy; they are busybodies. 12 Such people we command and urge in the Lord Jesus Christ to settle down and earn the bread they eat. 13 And as for you, brothers, never tire of doing what is right.

 

1 Cor 9:3-18 (NIV)

This is my defense to those who sit in judgment on me. 4 Don’t we have the right to food and drink? 5 Don’t we have the right to take a believing wife along with us, as do the other apostles and the Lord’s brothers and Cephas? 6 Or is it only I and Barnabas who must work for a living?

7 Who serves as a soldier at his own expense? Who plants a vineyard and does not eat of its grapes? Who tends a flock and does not drink of the milk? 8 Do I say this merely from a human point of view? Doesn’t the Law say the same thing? 9 For it is written in the Law of Moses: “Do not muzzle an ox while it is treading out the grain.” Is it about oxen that God is concerned? 10 Surely he says this for us, doesn’t he? Yes, this was written for us, because when the plowman plows and the thresher threshes, they ought to do so in the hope of sharing in the harvest. 11 If we have sown spiritual seed among you, is it too much if we reap a material harvest from you? 12 If others have this right of support from you, shouldn’t we have it all the more?

But we did not use this right. On the contrary, we put up with anything rather than hinder the gospel of Christ. 13 Don’t you know that those who work in the temple get their food from the temple, and those who serve at the altar share in what is offered on the altar? 14 In the same way, the Lord has commanded that those who preach the gospel should receive their living from the gospel.

15 But I have not used any of these rights. And I am not writing this in the hope that you will do such things for me. I would rather die than have anyone deprive me of this boast. 16 Yet when I preach the gospel, I cannot boast, for I am compelled to preach. Woe to me if I do not preach the gospel! 17 If I preach voluntarily, I have a reward; if not voluntarily, I am simply discharging the trust committed to me. 18 What then is my reward? Just this: that in preaching the gospel I may offer it free of charge, and so not make use of my rights in preaching it.