Common Cents Part Two: Delivered from Debt

Welcome to Common Cents: Money Questions & Answers! These articles are companion pieces to our sermon series, Financial Peace, and will offer a unique, practical perspective on the spiritual truths unpacked by our teaching team.
Part One of the series dealt with Finances and Faith, and Part Two is comprised of personal testimonies detailing the journey toward living debt-free.

Part Two: Delivered from Debt

In Proverbs 6, Solomon counsels his son by saying “Free yourself, like a gazelle from the hand of the hunter” (Proverbs 6:5).  Solomon is speaking about debt here – what does a gazelle have to do with that?

Dave Ramsey refers to this as ‘gazelle intensity.’ He explains: “When you have that kind of intensity in getting out of debt, you can break the gravitational pull and move yourself in a better direction. That’s what gazelle intensity is—running for your life.”

Just as there is no one way to get into debt, there is no one way to get out.  Here are three stories of hope from people who were able to move themselves in a better direction and overcome debt.

Determined, Not Desperate: Rich and Stephanie

When we married ten years ago, the first steps of Dave Ramsey’s plan came easily.  We quickly secured the $1000 starter emergency savings fund he recommends, but we were far from living a debt-free lifestyle.  In fact, we actually purchased our wedding rings with credit.

We both had well-paying jobs and were used to being able to have what we wanted without much financial strain.  Rich especially had no qualms about freely spending at the Under Armor outlet or buying half the concession stand at the movies – the cost was simply accepted as part of the experience.

In 2018, our son (Stephanie’s stepson) began to look at colleges, and we felt motivated to get our finances in order to better prepare for the future.  Stephanie put together a spreadsheet of our outstanding debts.  Including car payments, student loans, furniture, and a loan against a retirement account, the total was $84,000.  The amount was sobering, but it was eye opening to see everything clearly laid out in front of us.

We began making lifestyle changes to pay down our debt.  Stephanie used a weekly budgeting app that functioned as the envelope system without actual envelopes and cash. We each had a small weekly stipend of “fun money” that we could spend on non-essentials so we didn’t feel as though we were completely unable to treat ourselves, and also so that we could learn better habits with saving versus spending.  Rich still shops at Under Armor, but now he saves his weekly “allowance” for those visits instead of limitless spending.  The purchases hold more value given the effort going into saving for them.

For us, the simple act of having our eyes opened to the ways we had been unnecessarily spending combined with being able to track our progress on the spreadsheet was a huge motivator to keep working towards our goal.  When another one of our debts were cleared, Stephanie would call me at work, brimming with excitement to share our latest win.

Several months into our journey of eliminating debt, Rich sold the townhome that we had been renting out since we got married and moved.  We unexpectedly made a sizable profit off of the sale, and while previously that money would have been spent before the check could clear, we instinctively applied it to our debt.  For Rich especially, this was a significant indication of how much our spending habits had changed.

As of now, we are currently debt free with the exception of our mortgage.  Our son ended up getting a scholarship package to his college of choice, but we still stick to a budget in order to have more freedom in our financial future.  Being debt free has allowed Rich to explore enjoyable career opportunities as well as make Stephanie’s dream of owning a beach home become a reality further down the line.  Our daughter (Stephanie’s stepdaughter) is beginning her own college search and it’s reassuring to know that we are in a place to afford to send her wherever she wants to go.

We feel grateful for what we’ve been able to accomplish, and the changes we’ve been able to make.  We appreciate what our financial journey has taught us and our children about money.  We are looking forward to seeing what God has planned for us with what He has provided.

A Change of Perspective: Rob and Cora

When we understood that overcoming our debt was the only way to save our marriage, we knew we first needed a way to bring in more income.  I (Rob) took a second job working evenings and weekends at a seafood counter of a local grocery chain.  It was humbling, but necessary, and I reminded myself frequently that it was temporary.  It also demonstrated my commitment to Cora, both in changing my habits towards money as well as to making our marriage work.

It’s easy to say you can’t find a way to make extra money; it’s harder to make the sacrifices required to do so.  I missed out on time with my family during those months, but it was a worthwhile investment based on the life it enabled me to give my children now that we are debt free.  And working for an hourly wage allowed me to adjust my perspective on the value of a dollar.  It’s one thing to make a $100 purchase.  It’s another to realize that purchase cost you ten hours of work, ten hours away from your family.  It helped me understand one of Dave Ramsey’s often quoted sayings: “It’s okay to have stuff. Just don’t let your stuff have you.”

When you look at a city skyline, you’ll notice that the tallest buildings are often the banks. They need these big buildings to do their big business, and a large part of that business is selling people things they cannot afford. Debt is their biggest money maker.  Once I grasped that concept, it was my mission to protect myself and my family from becoming valued customers of that business.

We chose the snowball method approach to paying off our debts, meaning we paid off our debts in order of smallest to largest, gaining momentum as we knocked out each balance. When the smallest debt was paid in full, we rolled the money we were paying monthly on that debt into the next smallest balance.  Something else Dave Ramsey frequently says is “Everything about money is learning to control your behavior.” 

Similar to a weight loss program, the changes to working towards a debt free lifestyle can be the most uncomfortable in the beginning, before they become habit.  The snowball method works because it provides hope.  It allowed us to see progress quickly.  Once our first (small) debt was paid off, that debt was out of our lives forever, and we could move on to the next. Seeing the plan working was what motivated us to stick to it for the long haul.  It gave us the focus to finish the race, even when it felt more like a marathon than a sprint.

And like weight loss, we found it important to celebrate the wins in paying off debt as well.  Ramsey advises not seeing the inside of a restaurant while paying off debt unless you are working at one, but just as a cheat meal can be a reward for reaching a goal weight, Cora and I would celebrate our milestones by rewarding ourselves with an occasional night out or a small expense that wasn’t budget-approved.  Since our perspective on money had changed, we could spend half as much as we would have before we started our journey and still feel like we were treating ourselves.

One of the most important things we learned while paying off our debts is that short-term sacrifice for a better future is worth it.  Focusing on our future allowed us to pay off more than $75,000 in debt in just a few years. Time and again, God has shown us that His plan for the future is worth the present struggle we face. Living debt-free is no exception.  

Sober and Financially Secure: Paul 

I was a functioning alcoholic… well, at least I was for most of the years I was drinking.  I got up and went to work on time every morning, I made great money as a sales director for a large international company, and I provided well for my family.  I also regularly blacked out or threw up on a typical Thursday evening after stopping for “one drink” on my way home from work.

In an effort to keep the peace with my wife regarding how much I was drinking, I made poor decisions with money.  Instead of telling her we couldn’t afford something because of the amount I was spending on bar tabs and at the liquor store, I would apply for yet another credit card.  When she fell in love with a home that was out of our price range, I gave in, due in part to its proximity to several local watering holes.  When she complained it wasn’t worth cooking since I was rarely home by dinner time, I often picked up carry-out for my family on my way home from the bar.  When she confronted me about spending more time at happy hour than I did with our kids, I charged an expensive Disney World vacation for our family of five and probably spent the same amount on $15 beers in Epcot Center that I did on our plane tickets.  I made a six-figure salary twice over and we were still living paycheck to paycheck. 

Often, I was so strapped for cash that even my corporate credit cards would be maxed out.  Expense checks were delivered in person in the office on Fridays (opposed to paychecks, which were directly deposited) and since I was often out of the office traveling, I trained my admin to duplicate my signature. She would sign and deposit the checks into my account on her lunchbreak, saving me from overdrawing my account at the last minute.   I once spent hundreds of dollars on a business dinner in Miami and then several hundred more at a nightclub afterwards.  The only thing that saved me that time was that the nightclub charge was made after midnight – my company believed that I had taken the clients to dinner on two consecutive nights.

My rock bottom came when I got a DUI driving home from the bar one evening.  Without a license, I couldn’t do my job, and unfortunately, I was let go shortly after.  The day I was fired, I was terrified to go home.  For the first time, there was no way to hide the severity of my problem from my wife.  For some reason, instead of heading to a bar when I drove away from the office, I drove to a church.  I came clean to God and I prayed for the strength to change.  I gave my life to Christ that day.

I was given three months of severance pay as part of my termination.  I had 90 days to get sober, find a job, and make major changes in how I was handling our finances.  We had car debt.  Credit card debt.  Vacation debt.  And major house debt.  Without the promise of a regular income, I didn’t feel I had the luxury of time on my side.  I knew how quickly what we owed could overwhelm us and leave us desperate.  I was concerned that extra financial strain would make my sobriety more difficult to sustain. I prayed for guidance and then I sat down to have a very hard conversation with my wife.  We were going to have to sell our home.  Finally, I was facing our situation head on instead of digging myself deeper into the hole to cover my tracks.  She was upset but I was convinced it was the right thing to do and despite everything, she trusted me.

I began applying for jobs in another state where the cost of living was significantly lower.  Once I secured a job, we listed our five-bedroom colonial and downsized to a cute three-bedroom rancher in a much more affordable real estate market.  With the money I made from selling our house, I was able to pay off our outstanding debts and put a sizable down payment on our new home, allowing for a 15-year fixed rate mortgage.  Between the much lower mortgage payment and the money I was saving on a sober lifestyle, I noticed a difference in our income immediately.  Motivated, I implemented a household budget.  My wife happily got on board. When I wasn’t worried about keeping my addiction from her, I was able to be much more transparent with our financial situation.  I was using the time I’d previously wasted on bar stools to recommit myself to my family.  Our relationship thrived.

I have been sober and debt-free for over ten years.  Just as I can’t imagine taking a drink ever again, I can’t imagine living paycheck to paycheck either.  Some of our best memories as a family have been made in this three-bedroom rancher – we all agree that it is our favorite place we have ever lived.  Instead of a local watering hole, we now have a local church where I currently lead a chapter of Celebrate Recovery.  The money I used to spend on alcohol goes to God.  I lost my job, we lost our big house, but He gave me back my life.

Please visit next week to read our article on money management: Managing Dollars with Sense.