It is easy to think about eating healthy, taking a walk, and lifting a weight. But until the scale reaches the number you never thought you'd see, the doctor gives you a stern warning, or G-d forbid, you have a serious medical emergency, many people never act on those healthy thoughts.
Financial stability has been the same for us. For years we've thought about getting financially secure. Thought about getting debt free. Thought about living on a budget. You get the idea.
We've even occasionally acted on these thoughts - in fits and spurts - through the years. Paying off bills here and there. Loving the feeling and vowing to not make any new debt. But the feeling wears off and a shiny new __________ (insert toy, vacation, etc...) shows up that is such a great deal and the monthly payment would be so low that we can just add that little payment right into our month and never notice.
So why the debt free band wagon now? What makes this time so much different? We'll, we've reached that magic tipping point - the stern warning from the doctor so to speak.
And that warning said this: "If we do not make a change we will lose our home." Period. Cut and dry. No punches pulled. If we didn't stop our frivolous ways then we would no longer be able to call this little farm our own.
Now, let me soften that a little.
Looking from the outside you would not see frivolous living. You would see frugal living and, in many ways, that was the reality of our life. For example:
- We drive older vehicles and have not had a car payment in years.
- We have 4 credit cards with an average of a $500 balance on each card.
- We take 1 vacation per year and spend less than $1,000.
- We eat 90+% of our meals at home and 75+% of those meals are from scratch.
- We had hobbies that cost significant money to maintain.
- We spent a lot of money on food and often let food rot in the refrigerator instead of eating left overs.
- We drove our low gas mileage vehicles instead of our high gas mileage vehicles. (Yes, we have multiple vehicles)
- We signed up for unnecessary services that added significantly to our monthly cash spending.
Life was going along just fine - money came in, money went out. Most months there was enough to go around to all of our debts, buy our food and gas, go out to eat with friends each weekend, indulge our hobbies, etc... Every once in awhile our expenses would over run our income and we'd get that panic where we realized that we were in over our heads. But we'd get through it and the next month we were back at our regular routine.
Then our income was reduced. First my job - Down $600 per month. Then Shane's weekend job closed - Down $400 per month. Then Shane had to take a different weekday job - Down $400 per month. BAM! In two months our income dropped $1,400.
We had enough savings to cushion the blow for a couple months. When that ran out, we robbed Peter to pay Paul for a few months. When we realized that we were behind on almost every bill, including our mortgage, it finally dawned on us that if we kept on this path we would lose everything.
Thankfully, our (very late) refund from the IRS showed up (on my birthday!). We spent it all on bills. It was gone in a matter of days. But, it started us down a new path. A debt free path.
Today we are far (far) from being debt free. We even have some bills that are still behind. But, we finally heard the warning and we are now on the path to becoming debt free. We've put on our jogging shoes and have been putting in the miles to get financially healthy.