"'Cause it's a bittersweet symphony, this life
Try to make ends meet
You're a slave to money then you die"
Try to make ends meet
You're a slave to money then you die"
- from Bittersweet Symphony by The Verve
Mark and I decided a long time ago that we were done living with credit cards. We both had them, we both used them, we paid them off the best we could every month.
When I turned 18, my dad told me to get a credit card, use it only for gas or if I had enough money in my checking account to pay for whatever the item was, and pay the bill in full when it came each month. I did that for years. Some months I would "accidentally" max the card out (I had a $500 limit) and have to pay the whole thing at once, which was so painful. But most months I would just charge whatever item or experience suited my fancy and pay for it later. I was living each month on next month's income. But I had built up a very nice credit score and a much larger credit limit (*big grin*)!
When Mark and I got married, he had a credit card balance much higher than I was used to. Life was different for Mark than it was for me in college. I was responsible for only me: I had a part-time job, student loan income every quarter (haha, it was actually debt!), and some help from my parents. My expenses were mostly rent in shared housing, eating out, and shopping. Mark was a single dad raising two girls and trying to run a household while getting an education that could provide a better future for his daughters. He was also left with the responsibility of paying the debt he and his first wife accrued. Mark knew the girls would only have one childhood, so he was willing to go into debt for them and their needs. He figured on paying it all off one day, but he had no idea that I was going to enter his life and complicate things (wink, wink).
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| Our first ticket to debt-free living! November 2006 |
In January of 2006, Mark cut up the credit card and gave it to me for my birthday. One might think that is the lamest present ever, but let me tell you, it was the best present I have ever gotten! The promise to live within our means and be debt-free! And guess what? By the end of the year, a wind storm blew a tree down on our gazebo and broke part of a wall. A few days later, a snow storm blew in and flattened it the rest of the way down. The insurance money was enough to pay off the credit card! Then we were able to focus on the van and student loan debt. We tightened our belts and lived on less so we could pay bigger chunks each month. I always believed the tree falling was God answering our prayers. My proof? The tree just barely missed the house-the exact corner where Baby Evie happened to be taking a nap in her crib!
Fast forward to now and we have been living without credit card debt, vehicle debt, or student loan debt for years (until we had to buy the BWV)! We used as much of our savings for the van's down payment as we felt comfortable with and we should be free of that debt in two years or less. We have been practicing saving for things before we buy them since our dishwasher broke in 2007.
After a few major unexpected expenses this summer, we have managed to drain our savings account, not to zero, but down to an uncomfortable level. Today, the dishwasher quit working. We are already living with a broken coffee machine, a broken cordless phone, soles falling off my shoes, no math book for Ian, and an upcoming copay when Lucky is born right before Christmas. This would be a perfect time to break down and start charging things again. Instead, we took a deep breath, said a few choice words, and got to work trying to fix the dishwasher for as cheaply as possible. Using the same technique we used when the washing machine broke, Mark was able to fix it. And I don't have to hand wash until we save enough to buy a new one (for now, we are living on borrowed time)!
We started using this great software program called You Need a Budget (YNAB). We used to use Microsoft Money or Quicken to manage our money, but those programs were cumbersome, and worse, they only showed you what you had spent AFTER you'd spent it! What YNAB is great at is forcing us to allocate every dollar from every paycheck as it comes in. Each month can have its own budget too. It's super easy to automatically allocate $A for this category, $B for that, month after month. It used to be so easy to say, "I've got a few extra dollars in the account," and make unplanned purchases, only to find at the end of the month we were short for insurance or some other bill. This caused stress, which added to the stress of trying to balance the myriad of transactions we would automatically download with Quicken at the end of each month. Now we allocate our money and it is there when the bills are due. When we have the urge to make an unplanned purchase, we quickly ask ourselves if we have allocated any money for it and if the answer is no, we either reallocate or WE DON'T BUY IT. Did you know that elastic for my sewing projects falls under clothing? Heh, heh, yep!
At some point, you work at getting ahead and using this month's paycheck for next month's expenses. For us, this has meant tightening our belts tighter than they ever have been before to get ahead. And its working! We managed to NOT spend a large part of our gas budget because I've stayed home for a month! It was hard, so hard, to not jump in the BWV and go gallivanting wherever I wanted, even if the event was free. Oh, July was so hard on me! But now we have an extra $90 that we can use for a trip farther away (like to visit the girls for their birthdays!) or it can be reallocated to the car maintenance savings. Because like it or not, there are some expenses that are unavoidable- like new tires or a dental bill-yet are completely within our power to plan for. There is no need to pull out a credit card when you've been expecting and planning for major expenses.
Mark and I will never be rich, and we are still strapped for cash, but we are the masters of that strap and are free from the stress of running out of money before the end of the month. And that is a SWEET symphony!
