MInTheGap

Standing in the Gap in a Society that's Warring with God.

I’m Out This Week!

July 9th, 2007 Viewed 2870 times

Yes, that’s right. I’ll be out of debt this week! It’s going to take a lot of my savings, but today I’ll be moving money out of my emergency fund and some of the kids savings account to make up the $2,800 that I need in order to say goodbye to the credit card debt.

That means that I’ll be making the gas gauge 0%, removing the chip-in widget, and start moving on to saving for Christmas!

Some things I’ve learned along the way:

  • Not everyone will understand your desire to get out of debt.
  • People don’t understand delaying getting something that they think that you can’t live without now.
  • It’s difficult to budget without spending much on yourself– but once you get in the habit, it’s easier to resist spending money you don’t have. In fact, it makes it seem odd when you spend a lot because you wonder what you could have done cheaper.

That last one happened this weekend. Saturday was VirtuousBlonde and my anniversary. Her mother sent us some money to eat out, so we knew we had the money. We went to Denny’s, and ordered our meal. At the end, when we got the bill, it was over $40 (before tip) and it felt really strange to spend that much for food. We usually keep it under $20 with the five of us (well, the youngest is free). We started to analyze the bill and saw a bunch of places where we could have saved money. We had to say “hey, we have the money, we should live once in a while!” That’s how ingrained saving money has become.

So, a bit of encouragement: It might be hard to budget at first, and sticking to it might seem a pain, but eventually it becomes habit and you’re free– because you aren’t borrowing on your future!

Remember, It’s About Your Behavior

April 16th, 2007 Viewed 2798 times, 1 so far today

Debt and DemandOver a year ago my wife and I watched a demonstration of the Rainbow Vacuum cleaner in our home.  Impressed by its filter-less system and wowed by the power it seemed to have, we wanted one– but had no money to purchase one.

Never the ones to pass up a sale, they had multiple plans for us:

  • Buy it outright
  • 90 days same as cash
  • “One of our great financing plans”
  • Become a Demonstrator yourself

It was the last of these options that appealed to us.  We didn’t want any more debt and those things are expensive.  However, we were already looking for something that my wife could possibly do in her spare time as a chance to get away and help the family bottom line, and since it could be done at her leisure after earning the vacuum cleaner we signed up.

A Faulty Premise

March 5th, 2007 Viewed 4320 times

Debt and DemandI was talked into my first credit card by someone on the phone.  I was told that it would help me earn points towards computer games I was buying already, so I thought it a good idea, even though I hardly used the card ever, and I always paid the balance.

My first real encounter with debt was when I graduated from college.  I had two debts– a college loan (kinda, it was a balance on a credit card my parents wanted me to pay off) and a loan to the school.  I also decided to pick up a third loan– this one in my name– for a car.  A 1992 Red and Gray Saturn SC2, power everything, moon roof, pop up lights, the works.

My father told me that it would be good for my credit score to pick up a short loan for the car and that way I’d be on record as able to pay a loan back.  We opted for a six month loan for the $6,000 simply because I was making good money, staying at home, and I could make the payments.

There was my first problem.  What I was taught here was that debt was a reasonable way to get something that I wanted right now and not have to wait and save.  Sure, I made the payments, but the pattern is what was established.  I was a slave to the “as long as I can make the payments, I can have what I want when I want it, and that’s fine with me.”

This is what’s at the root of today’s debt problem.  We have instant access to thousands of dollars, and we don’t realize just how much money we are throwing away because we refuse to wait.

Waiting does four things:

  1. It makes you wait on God.
  2. It combats selfishness– having credit encourages the “I have the power, I can get it now” philosophy.
  3. It saves you money– just think about how much of each payment actually goes toward principal.  Add it up over the lifetime of the loan, and just think how much that interest money could be worth now if you’d been putting it in a savings account (or in a sock under your bed for that matter!)
  4. It gives you time to evaluate the thing and to watch the price come down– it’s no secret, but time devalues many things.  If you wait for that thing to come down in price, the same money that you’ve been saving will buy you a bigger/better flat panel LCD monitor than the one that you’ve been having your eye on.

The first thing that we have to come to grips with is that we should not use credit to buy things– cars, televisions, even houses.  But more of that as we keep going.

MInTheGap

Standing in the Gap in a Society that's Warring with God.