My budget backstory
I’m not sure if many of you women reading this are like me – passionate about dealing with debt, budget, and purposeful spending. But I do have a backstory to the reason behind my interest in these topics. There was a time when I used credit cards as a miraculous fall-back cushion. In college I relied on that shiny bit of plastic when I needed something that I didn’t have immediate funds for. Soon my balance was over $1,000, and I typically paid little more than the minimum payments.
Credit became a way of life.
By the time I got married at 23, I had my credit card paid off. However, now my negative balance had increased due to college loans and my decision soon after marriage to purchase a small business. What seemed like it should be a simple transaction – buying a tiny business in an international transaction – cost me $10K in legal fees and much more than that in inventory expenses. I “cash flowed” this on zero interest credit cards. The tiny problem was that I lacked the organization to pay attention to payment deadlines or maximum balances. Soon my interest rates shot up to 18-25%.
Between my business, a small car loan, and student loans for my husband and I, we had a lot of debt. I felt too scared to look at the debt in the face, had no idea how much there was. If I hadn’t started listening to Dave Ramsey, I probably would still be making payments on debt at this point in my life.
After listening to hours upon hours of Dave Ramsey podcasts, I started to actually listen to his thoughts on debt, budget, and purposeful spending.
I knew I needed to apply his debt reductions steps to my own problem. I was fighting guilt for bringing that big red deficit number into our marriage. I realized that by closing my eyes to the problem I was never going to conquer it.
So what was this big red number in my life? After entering all the numbers into the Excel debt snowball spreadsheet I created (you can now buy the same spreadsheet from my Etsy shop here), I saw the breathtaking total. $60,000.
This debt did not fit within the plan we had for our future. My husband intended to be in full-time ministry, and our priority was for me to be a stay-at-home mom. There wasn’t going to be room in our budget to pay off this debt once we had kids. In fact, I knew it might actually hamper us from being open to going directly into ministry. This much debt would require an income that could provide for our family needs plus the paying down of debt. (Side note: my husband put absolutely no pressure on me to pay off this debt, but he supported my decision to work toward debt freedom.)
Our debt lit a fire under me
My business wasn’t bringing in enough to quickly pay off debt, so I sold my business for the cost of the remaining inventory, $11,000, and began working my tail off at an out-of-town job. I was 28 years old and determined to pay off all our debt and come out with savings by the time my husband graduated with his Master’s degree two years later. It took it’s toll on me to be away from my husband and home for the majority of two years, and the job became increasingly stressful. However, I felt like I had in large part gotten us into this mess and I would, with the Lord’s help, get us out.
This temporary job God had graciously provided for me paid well, and we lived on a tight budget. I faithfully drove back and forth from L.A. to San Diego in my old Corolla. I parked next to my coworker’s BMW and living out of a hotel during the week.
By living on much less than we made, we were able to accomplish our financial goals. $60,000 was paid off in 19 months, and the remaining months we saved enough to buy a used car for cash, and to put a small downpayment on our first (and current) home. I quit my job a month before our oldest daughter was born, the same month my husband graduated from his seminary. We will probably never again make the income we made in those few short years, but it was a supernatural provision while we set a solid foundation for our family.
Whew! Getting this story down on paper always overwhelms me with thankfulness to the Lord for allowing us to get out of that mess. Maybe you have a similar story? Or maybe you have always been faithful with finances – or maybe you are in a tough financial situation at this very moment.
Your life without a budget…
When we don’t faithfully keep a budget, what usually happens is spending money accidentally instead of purposefully. When accidental spending happens, it usually means spending is not according to priorities. Non-prioritized spending most likely negatively affects generosity, savings, and debt.
Not living within our means might also hamper us or our spouse from taking the job we would like to take because our hands are tied financially.
Not living within a budget is an indicator that we are not relying on the Lord as our provider, and not obeying His command to be content with what we have, by remembering that He will never leave us nor forsake us. (Hebrews 13:5)
Budgeting is a part of purposeful living
As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life.
1 Timothy 6:17-19
Our wealth is not our own! God is the one who richly provides. Staying on a budget is key to having enough to spend on the Lord’s work, the key to generosity and storing up treasure in heaven.
Don’t spend today what is needed tomorrow.
Budgeting is key for getting out of debt and staying out of debt, and saving for future (known) expenses. In this way we will prepare ourselves to continue to care well for our own families and God’s Kingdom work. Living in continual debt is a way that we pretend to be rich, yet have nothing. (House mortgages I consider in a different category than consumer and student debt, but it’s great to work toward having them paid off too.)
“One pretends to be rich, yet has nothing;
another pretends to be poor, yet has great wealth.”
Proverbs 13:7 ESV
The Family Budget Series
I will be posting a series of family budgeting blog posts here in the next month! Stay tuned for the next budgeting post, on budgeting with cash. If you haven’t subscribed to blog posts, you can subscribe here.
Tools for Budgeting
If you are struggling to get out of debt, I recommend the following products. I know it might seem weird to spend a little money to get out of debt, but believe me, you need some tools for this journey!
This Dave Ramsey bestseller will inspire you to get on track with budgeting and debt repayment.
(The link above is an affiliate link, but I only link to products I absolutely believe in!)
This debt snowball calculator is in my Etsy shop. It is a super easy-to-use Excel spreadsheet where you can enter each debt payment and see the numbers drop. I designed this calculator back when we were paying off our debts, and it was extremely helpful. At only $5, this is one of my shop’s top sellers.
Not reconciled to the idea of online budgeting? I also have this monthly budget spreadsheet in my shop, another popular seller at $5.