Over the last decade, I’ve learned more about money than I have in my whole life! Matter of fact, it was almost 10 years ago whenever I was trying to decide which was cheaper – the late fee on the mortgage or an overdraft fee from the bank.
That’s just unimaginable today.
Ernie and I have embraced a new way of living that keeps us sane in the most trying times. I have to tell you though – it’s nothing new. It’s pretty old-school, actually. It’s called “Living on less than you make.” This also means a life without debt.
Debt was taboo back in the day. Like, it was embarrassing for your family to have debt. Not today.
When debt became more popular over time, it became easier to get “things” without needing all of the money now. Before they knew it, it came back with a bite. Now, it’s part of our everyday culture and considered normal. Kids are graduating college with a not-so-good start to life, with over tens of thousands of student loan debt.
If this is normal, I don’t want to be normal. Ever.
1. Debt makes us look good on the outside, even when we’re not.
This is probably the most obvious thing about debt to us now, but it wasn’t several years ago. If 7 out of 10 (now approaching 8 out of 10) people in America are living paycheck to paycheck and in debt up to their eyeballs, how are we really doing? Next time you’re at a stoplight, look around. The majority of those nice cars don’t belong to the owners. They belong to the bank.
Look at the commercials. They’re reeling us in with those monthly payments of only $499 for a brand new car.
We had a brand new house, a truck payment, a motorcycle payment, and a mommy vehicle payment – all within a few years. We managed it really well for a while. Like really well. You’d be proud. We had nice cars, a nice house, and took nice vacations for our age. We were making good money, too. Never once did we think there was anything wrong with it.
We looked good.
The problem comes whenever you continue to live a lifestyle spending more than you’re actually making. You don’t always continuously make more money, since your pay could fluctuate throughout your life, increasing or decreasing at times. So in order to maintain that lifestyle, you need to make absolute sure you’re making more and more money continuously because it will never be enough. You always have to feed the BEAST, so to speak. And the beast is never satisfied.
Then, it becomes a cycle of having to work so much more to make more money to feed this lifestyle. Did anyone ever tell you that feeding the beast is exhausting? That lifestyle may provide more money for a moment, but it steals your time… and sometimes even your health (because of the stress it can bring).
“But I can pay my bills.” Spending more than you’re making doesn’t necessarily mean that you can’t pay your bills. Simply put – if I don’t have enough money to pay for the entire purchase and I use debt to buy it, I’m spending more than I’m making. Now I have to make payments.
2. Debt keeps us in financial bondage.
Even if you’re not currently struggling to pay bills, the emotional feeling that debt brings to our life is very similar to the feeling of stress a person feels whenever their home or car is burdened by too much clutter. I always feel better when my car is cleaned out and vacuumed. It literally frees your mind whenever the clutter is gone, and there’s an emotional sense of freedom. It’s like a fresh start. Ahhhh… I can breathe.
It’s the same with getting rid of debt and cleaning up your checkbook. If you’ve never known what it’s like to live life without it, then you’ve never experienced the freedom it brings.
Getting rid of your debt and continuing to live without it is more than just numbers – there’s literally a spiritual and emotional attachment of freedom that goes with it. Some of us don’t even know what we’d do if we got rid of our car debt and started paying cash for cars. After all that weight is gone, some people don’t even know how to act or think anymore. If you never develop a mindset of not needing debt anymore, you will always think you need it.
It’s kind of like the Israelites wanting to go back to slavery. They were free from slavery, yet they thought it would be easier to just go back to Egypt so they could get their free food. They were willing to be slaves again because it was too hard to live out there on their own, which also required them to FULLY rely on the Father’s provisions.
Freedom comes with a price. But OH, the PRIZE! Weights off your shoulders? Yes, please!
The rich rule over the poor, and the borrower is slave to the lender.
God wants us to be in a position to be able to serve others in His name – NOT to be in bondage to payments. He wants us to have freedom and options. Many of us know that God is calling us to do great things for Him, but when we’re in debt, we just don’t have those options. [paraphrased from Chris Brown]
There’s things we’re in the process of doing right now that we would’ve NEVER been able to do if we wouldn’t have tackled our debt with a vengeance and learned to live without it. It’s something that God put on our heart, and there’s no way we could follow through on that plan if we didn’t get out of the bondage of debt.
3. It is possible for regular people like me to live without debt and pay cash for everything.
But don’t you need a good credit score? What do you need a good credit score for? Only to add more debt to your life.
If you’ve decided that you no longer want debt in your life ever again, you won’t need a credit score. Not even for a mortgage.
You may be wondering why a mortgage is okay. Although paying cash for a house is the best way to buy, your house does go up in value. As long as you’re on a 15-year payoff plan, you’re living in a house that’s not too big for your budget. Having debt for things that go down in value is equivalent to throwing $100 bills out the window everyday.
If you have an emergency fund and no debt, why do you need to go back into debt to buy a car? We now save up and pay cash for cars. But like I said, everything comes with a price. That price is called “being responsible.” You say No to things that aren’t important and Yes to things that are.
There’s loopholes around certain things that you think you need a credit score for, and you simply don’t. Some apartment complexes and landlords check your credit score to see if you’re good at paying on your debt in order to approve you for renting. What if you’re debt-free and no longer have a credit score?
If you’re debt-free, you have something else – money. You should have that, anyways. If you have no debt and no money, you may be spending everything you make, and we need to have a serious talk about your budget.
4. Using a budget is not life-threatening; it’s life-changing and can keep you out of debt.
Talk to any self-made millionaire, and he or she will tell you they live on a budget. Bottom line: It’s how they became a millionaire.
You may not be worried about millionaire status, but there’s a lot to learn here. If they became millionaires by living on a budget, then why were we wondering around life without using one?
Truth is, no one is born with financial knowledge. We must be taught. It’s simple money principles that somehow got lost in the culture from generation to generation. It’s not always something taught in schools around the country, and should be something that’s taught in the home. The good news is that anyone can do it.
It’s elementary Math: Income – Expense = Zero
Giving every dollar a place to go before you spend it is called a zero-based budget, which is something taught in Financial Peace University. It’s nothing new, though. It’s very simple, but it can get complicated and throw people for a loop. Irregular incomes, months bleeding into the next, etc., but it’s a lot less-complicated than you think.
That’s where my upcoming course comes in. I want to walk with you so you don’t throw in the towel when budgeting becomes overwhelming. Some of you just don’t know where to start.
Using a budget for every single paycheck is how you pay off debt quickly. It’s how you save up to pay cash for cars. It’s how you organize your spending into categories for your everyday life. It’s a simple plan that gives you the freedom to spend and save the way you really want to.
Whenever school shopping comes around, you have the money for it. Whenever the AC needs to be fixed, you have the money for it. Whenever Amazon Prime takes $119 out of your account, the money was waiting to be taken. Doesn’t that sound like relief?
A budget is NOT a straight jacket. If you’re not wanting to use a budget because you’re afraid of restrictions, then I can only convince you by telling you that a budget will find you MORE money, guaranteed. You will be able to plan for upcoming purchases without the guilt of spending frivolously.
It will give you PEACE OF MIND, knowing that every dollar is accounted for. Speaking from experience, that’s something worth having.
This picture is very special to me because we’d come to a place in our life where the burden of debt was no longer hanging over our heads, and Ernie was able to accept a job that gives him off every other Friday. We get to spend a lot more time together as a family, and YOU JUST CAN’T BUY THAT! I want others to be able to experience this very same thing.
One of those Fridays…
If you’ve never thought about debt this way before, I hope I’ve been able to give you some insight to how it’s affected our life and others’ lives in negative ways. Sometimes a different perspective can open our eyes, and I want you to know that you CAN get rid of it if you really want to! Get that burden off!!!
Ladies! I have an upcoming masterclass to share what we did to change our finances around. I don’t want you to miss this!