Last night, we listened to Dave Ramsey talking about Wealth Building. Our kids were in the kitchen as we cleaned up from dinner. We’ve always tried to be intentional, open, and honest in discussing money with our kids. Money conversations were not a practice in our homes growing up. We honestly did not know much about finances when we married, except no matter how hard you worked, there never seemed to be enough money. It was time to teach out children how we got smart with money and became debt-free.
The Conversation
The conversation started with our 20-year-old daughter talking about her peers at college. Student loans and how she doesn’t want to have massive debt even with plans of PA School. She described how they go into debt for school, cars, and other things they want but can’t afford. Our current system allows college-age students to become thousands of dollars in debt before getting their first serious job.
She stopped and asked, “How Did Y’all Get Smart with Money?”
The question stopped me mid-dishes in the sink – Let’s be honest here, I’m always ready to stop dishes!!!
But her question made me look across the island at my husband and ask him what the defining moment was. His response was something like, “Well, we never really had a lot of debt.” But then my mind went back to 2007.
Rewind to 2007
In 2007 we had been married 17 years, our now 20-year-old daughter was six, and our now 18-year-old son was about to turn 4. It was a year that will live in my mind forever. We lost our 8-year-old nephew to an illness that we didn’t expect to happen. The shocking realization that sometimes we can lose our children at a young age hit home, and we were committed to spending every moment possible with our two.
In 2006 we had decided to homeschool, which meant we would continue on a single income until our children began college. We were the typical American family at that point; we had a mortgage and two car payments. We had never carried credit card debt, and we cash flowed my husband’s college education before our children were born. Still, our debt could have easily overcome us on one income if we had an emergency.
At the end of 2007, the economy was shaky, and the housing market was about to take a huge hit. The company my husband worked for was a supplier in the housing industry and had been sold three times during the six years he had been there. Then, in Sept/Oct of 2007, that company’s stock price dropped into the thirty CENT range! I don’t even know why I tracked that at the time, but I remember watching the drop and thinking we would be in trouble.
Time For Serious Change
I did several things – the first and most important was to bring my fears and concerns to my husband.
We needed to be in agreement with our plans.
We updated my husband’s resume and started applying for jobs with other companies.
We got serious with our budget and found where we could trim expenses.
He took all over-time hours possible, and we saved every dollar.
I went through our house and began selling anything that didn’t move, collected dust, or felt like we did not need anymore. Finally, the walls became bare, and the freedom came with letting go – I hate dusting, and clutter makes me irritable!
By December of 2007, my husband had gone on three interviews. He turned one job down because he didn’t feel it was the right fit. So the saying that it’s easier to find a job while you have a job is true, and it can keep you from accepting the wrong job out of desperation.
That’s Not What I Had in Mind!
On December 24, 2007, we were driving an hour from home to visit both sets of parents when he got a call from an HR Manager from the chemical company where he had previously worked as a contractor. They wanted to hire him! That’s good news, right??? Unfortunately, we were on the road and didn’t have an opportunity to discuss it when I heard him say yes, he would accept the position. The next words were the rate of pay – wait! That wasn’t the plan!!! This offer wasn’t what I planned or had in mind.
On that Christmas Eve night in 2007, we effectively took a 25% cut in pay. My heart dropped, my stomach was queasy, and my thoughts were racing. How? How are we supposed to make it on this? We did not have a large emergency fund. I’m not sure we even had three months of expenses.
Trusting and Making Change
I’m going to be really honest here. My husband has always made it a main priority to ensure that our children and I are well cared for. He has always put our needs/wants above his own; he is the most selfless man I have ever met. So at this moment, I somehow knew that I had to trust him and the Lord to provide.
He began his new job in January of 2008, and the change of environment was something he had needed for more than a year. It was much less stressful, and for the first time in our children’s lives, he was working normal day shift hours. I hadn’t realized how much we all needed that shift at the time.
At home, I learned to save money by hanging clothes in our laundry room or basement to dry instead of using the dryer. I cooked meals at home, made snacks, and my husband took leftovers to work. I learned to can food from our garden. I was able to purchase half a beef for our freezer. We became very aware of our spending habits, and any available extra money that we got went towards paying off our vehicles and mortgage.
Please Don’t Add to My Overwhelm!
I don’t have exact numbers, but the total debt was at least $60,000, likely closer to $65,000, and our gross income was $50,000 or less before overtime hours. We had never been in debt more than our annual income since the first two years we were married. I know to some that may not seem scary, but to a couple raised in single-income families, we were trying to raise our children on a single income – the debt was more than we could feel comfortable keeping.
I remember visiting a financial advisor associated with the bank where we had our mortgage during this time. He went through our financial health and advised that we needed at least a one-million-dollar insurance policy on ME!
I walked away feeling defeated and overwhelmed. We were trying to put food on the table, keep the electric bill paid, work our way out of debt and prepare for our future. His attempt to help us find perspective added to my stress.
Now, the thought of “What if Something Happens to Me???”
Twenty years, later we have survived. We didn’t take out huge policies, we did along the way increase our policies as we could afford them, but we didn’t add undue stress to our tight budget.
I Think We Can, I Think We Can…
By February of 2009, we paid off both of our auto loans – one year early! We had not had a major increase in income; we had just been diligent with the income that we had. The next goal was the house, and I had set a personal goal to be debt-free before I turned 40 in November 2010, also before our 20th anniversary in May 2010.
Soon after paying off the autos, a 2-year investment CD of $7,000 matured. We cashed out the CD and Paid Off the HOUSE almost FOUR years early! I can tell you the day that I went to the bank and made that final payment – I Cried Happy Tears!
The Feeling of Freedom!
A lot of saying “No” to my kids, ourselves, our families, and opportunities had gone into that moment. There was a lot of emotion tied into the accomplishment that we hadn’t considered possible just five years before. At the time, we lived on less than we had most of our marriage and made huge progress in paying off debts.
We had found freedom and knew that we would be okay if we temporarily lost a job.
Where to Next?
Have we ever experienced financial stress since 2010? Oh, Yes! But not the overwhelming feeling of drowning or feeling like we couldn’t make it. After several years of so closely watching our finances, it doesn’t come easy to spend large amounts of money at one time.
In 2013 we bought a 4-Runner that we did finance; we had the cash to pay for it, still remembering 2007, I didn’t feel safe spending that cash.
In 2016 we sold our home and purchased a foreclosure home that we remodeled and later flipped – with cash.
In 2017 we built our current home with cash.
In 2019 our oldest started school at a private four-year Christian university, and we are paying cash for the portion not covered by scholarships.
In 2019 when a sudden opportunity came, we purchased an older model “cool” truck for our youngest with cash.
In 2020 we bought another house to remodel and flip. We did finance a portion of this house. We felt the investment was worth it, and we knew having no debt or mortgage, we could pay for it if needed. We sold that house by the end of 2020.
In 2020 we also decided that I would not return to the public workforce but use my experience in managing money to help others who have needs with learning to manage their finances and set big goals for their future.
In 2021, our youngest graduated homeschool, I retired as a homeschool teacher, and he started college. He chose a state school that pays for his tuition for his first two years.
In 2021 we also needed another vehicle; we purchased a 2010 Highlander that we paid for with cash.
Do We Ever Stop Planning?
Currently, our focus is on building my business by reaching and serving as many individuals and families as possible. My goal is to help them find the hope and determination we found with less stress and fear.
We also focus on helping our children finish college strong.
We spend as much time with our children as possible, which means vacations or day trips when we have the opportunity.
We are preparing for retirement in the next few years and intend to travel whenever we desire.
Back to our 20-year-old and Our Conversation.
I keep thinking –
- What if I had known at her age what I realized in my mid-30’s?
- What if I had even had questions, goals, and dreams as she does now?
- What if I had someone who could have guided me and talked to me about finances?
- What if I had known that you could accomplish your goals without having massive debt?
- What if I had even dared to dream that we would be where we are today?
I’m thankful that we didn’t lean more into debt and learned how to manage without putting a lot of financial stress on our family.
I’m also thankful that our children will begin their adult lives knowing a lifestyle not always about NO but KNOWING limits and achieving attainable goals are necessary. They know that dreams are important enough to make them happen when we decide we can.
I’m thankful to know that our children can see a life of giving when there is a need or feel the Lord speaking to us about something.
I am glad that by listening to sound advice and the wisdom of those farther along the journey, We Got a Lot Smarter about Money!
Does the Story End Here?
My story is unique to our family, but the concept is not uncommon to anyone willing to make goals and determine to change the trajectory of their life.
You don’t have to carry that same lifestyle you’ve lived for 10, 15, 20, or more years. You don’t have to live your life stressed with debt and overwhelm, worried that one emergency could change everything in your life.
When you have the desire and determination to change your future, your academic level doesn’t matter; You Can Become Smart with Money.
If you are interested in changing the way your family handles their finances please feel free to book a session with me to learn more about how I can help guide you on your own unique journey.