Wednesday, April 29, 2009

Why I am passionate about frugality

I have a very scattered brain and therefore I am pretty sure I have a very scattered blog.  I went to bed last night thinking of Chystalee's post and how she was able to put into words what I am not good at explaining.  I laid there wondering if people think I am just a nut making her own laundry detergent to save a few pennies. My adventures in being frugal are so much more than that.

Kyle and I have been blessed with a natural desire to be good stewards with our money. But the desire has not always translated into knowlede or more importantly behavior.  Because of our decisions and various trials we have learned a lot the hard way.  I have the ache in my heart that almost everyone has at some point in their life: I WISH I KNEW THEN WHAT I KNOW NOW.

I worked very hard at being frugal from the moment I knew I wanted to be a stay at home mom. When I did become a full time homemaker we still found ourselves not completely adjusting our lifestyle like we should and we fell prey to bad decisions: late car payments, a payday loan, debt consolidation, etc.  We worked so hard to overcome these problems and buy our first home all while I stayed home with the kids.  Living within our means became a challenge that I thrived on instead of  just a depressing fact of life.  

Then I read the tightwad gazette and I became even more jazzed about being frugal.  I started to change how I looked at spending money and I did save in many ways.  But it was kind of haphazard frugality. We didn't budget the right way. We didn't pay down a lot of debt. It was more frugality in the "wow look how cheap these groceries were" camp. Not purposeful.

Then one day I heard this guy on the radio.  I was in the parking lot of Sam's club on 121 - see how clearly I remember?  A woman caller described her financial situation. It was almost identical to ours. I waited with baited breath to hear what he would tell her. I thought it would be like what I had heard in the past - you know the "pay the lowest interest rate first..... yadda yadda." but NO what I heard was beautifully simple and immensely true. Dave Ramsey answered her with what I now know are the Baby steps, and he started with the most true statements ever. 
Finances are not just about the numbers its about behavior. You need to live like no one else so later you can live like no one else. You need to eat beans and rice and rice and beans and get out of this DEBT!

By the next day I was trying to find his book at any library or half-price books. I quickly found out that he is so popular that his books are almost never at any of those places. But eventually I did get it and since reading the Total Money Makeover our lives have been completely changed.  
I am frugal for a purpose. We have a plan - together.

I'd like to say that since then we have been exactly on track. That is not the case! But I have a firm testimony that had we not been following the baby steps and had we not paid off as much debt as we did, that this period of unemployment would have been extremely devastating to us!

Since first reading the book and starting the steps we have had many, many blessings. We have had trials too and we have needed help. But even with what we have gone through lately we still have a plan and most importanly HOPE.

One of the hardest parts for us was actually cutting up and getting rid of the credit cards. When we first started we did get rid of all of our credit card debt. But we didn't cut them up or cancel them. Then somehow we ended up with a $7000 balance again. (I am embarrassed to say some of that includes camera equipment - picture me red-faced)  So if you decide to start the baby steps, don't make the same mistake we did and secretly keep the credit cards  - do it right -- CUT THEM UP!
We finally did it, Ella did the honors - she cut up our Capital One and Sears. And we did it during unemployment. Talk about scary!!! It was the best decision- really!

The kids ask every friday when Dave Ramsey has people call in to scream they are Debt free -
"When will it be our turn to scream 'We're DEBT-FREE!!!!!!!!!!"  I can't wait for that day either!

NOW the really, really, really HARDEST part is real life budgeting. We have been working hard on our zero-based budgeting. And boy is it hard. You only think you are on budget if you are not zero based budgeting.  I could write several posts on zero based budgeting and I could talk your ear off about it too. Maybe I will write more on it. But if you need any resources just ask me! - I am no expert but I do have a lot of resources. And lest you think this is only about Dave Ramsey, The church has been teaching zero based budgeting for years and years and years.

If you are curious about why Kyle and I remain so passionate about our finances- I will let you know about our financial Goliath.  I am an open book so I will not hestitate to tell our debt details. She has a name. Her name is Sallie Mae. She lives with us and up until we listened to Dave Ramsey we thought she would live with us forever. But now we have very hardcore plans to kick her out of our lives as soon as possible!  So without further ado here is our Debt Snowball. It is a short list with a hefty price tag:

Capital One - 6912.01
Sallie Mae - 68,686.02

Bet you feel a little bit better about your financial situation don't ya

I plan to keep living for as cheaply as possible. I am curious to see how little we can live on so that we can pay this HUGE, GINORMOUS, OUT OF THIS WORLD BIG debt off.  

I figure some people keep up weight loss blogs. I'll keep you posted on our debt loss on my blog. Hopefully some will be inspired by my honesty of our Debt Snowball goals. And before you think I am crazy for homemade detergent, cloth diapers and thrift store purchases you can remember my friend Sallie and how much I hate her!

If you are interested in borrowing any of my Dave Ramsey stuff let me know. But if you want your own he is having a huge sale on his website right now - EVERY BOOK HE SELLS IS ONLY 10 bucks!!! And even bigger news in September he is going to do his Live Total Money Makeover show via webcast at locations all over the country - So people can attend all over, even in places that he usually doesn't travel to. I figure if I start talking about it now all the people I love and care about can make plans to go!

Seriously the stuff he teaches is so common sense, but so valuable I wish I could gift the knowledge to everyone I love. I also think what he teachers applies to everyone, small debt, big debt, no debt and any size income. That one book has all the stuff they should have taught us in school from budgets to investing!

I wish I could go back in time and give it to myself.


Haley said...

You are awesome. We love Dave too. We are starting Financial Peace University on May 19th!


Ryann said...

Your right. I do feel better about my student loans now! You do have a long way to go but you'll make it. And through you, I too am trying to live the baby steps.

Abby said...

That is very awesome, Janie. If it helps, I never once thought you were crazy. I like ingenuity and thrift in general; it's something that if I weren't so damn lazy I'd love to do myself. I love seeing that it is possible to make things--things we assume we cannot live without unless a company has made it for us for ten times the cost--on your own and for cheap.

We don't have debt. The only reason we don't have debt is because the Husband is frugal as hell. I wasn't. When we got married his savings paid off every loan I had acquired as a single woman living on my own. I never had credit cards because I don't trust myself, but I didn't have money ever to buy anything I needed (car, college, computer, surgery loan) so I needed loans that I SLOWLY paid off. Since marrying the Tightwad Master I have learned to tone down how I spend, I am accountable to someone so I don't blow the entire paycheck he brings in, and I've taught myself what are essential purchases, what are nice purchases, and what are downright stupid and totally unnecessary purchases. I don't spend money at all like I did when I was single and accountable to no one. So sometimes it really helps to have a partner in this saving money bit. And it helps that the partner is very tight with his money. I've taught him it's OK to have fun once in a while and he keeps us out of debt. It's a great pairing. Anyway, I admire what you're doing and I never once thought you were crazy for doing so. Everyone in your situation should be doing the same darn thing instead of concentrating on which big screen TV they should buy next.

Janie said...

Well I am jealous of all ya'll

Abby, you are right it does make a HUGE difference to have a partner to keep you in line. And kudos to your husband for be frugal by nature.

Haley - We want to do Financial Peace but in a way we feel like we are already living the baby steps and we've given Ramsey enough of our money :) But please tell me all about it and if it is worth the time!!

Amanda said...

Janie ...I have to say way to go and putting yourself out there...being honest...on a subject that sometimes is just NEVER talked about HONESTLY. I just found out that our Escrow was underestimated and so our payment would be going up $100 a month...but now it is going up $200 a month for a year to have the minimum they require and pay off the deficit. OH. MY. WORD. $200 MORE a month. I am freaking out. I have spent a lot of time sitting and thinking where we can cut corners....hence why I asked you about his book. Thanks for all this info.....and for keeping it real:) I love REAL:) I will say we only have car debt, house debt and a small student loan left . But I feel like we can't ever save.....Every time we have gotten a chunk of money like (taxes, selling our old home....) Steve has lost his job and we end up having to use it all up to live on:( I want to feel FREE--I need to read his book:) I have heard him on the radio many times before.

LaFish said...

First of all I love that you are a straight shooter. We too love Dave Ramsey. We discovered him several years ago and have several of his books. Although we have always been frugal and conservative with our money, his common sense perspective on money encouraged us to be more aggressive in eliminating debt and saving. Which, allowed us to be able to adopt two kids and pay a mountain of medical bills all within a 15 month time period.(let me just also say that blessings from heaven played an important part too!) We feel that we are in the calm between storms and are working on getting our savings account back to where it needs to be. We can't wait to be debt free!