|Jarrod and I celebrating my 27th birthday.|
Yeah, I'm that girl.Let's rewind to January of 2004. It was the second semester of my senior year of college. I naively had student loan debt to cover my tuition but relied on credit cards and multiple jobs to pay for living expenses. I had absolutely no safety net as far as savings, family support, or even family living close to share a meal with. I had no idea what I was doing with my finances. I couldn't pay rent and had to borrow loan money from a friend. It took me months to pay her back, but I worked hard and did it. You'd think that would have taught me to budget. Nope!
I continued living on credit cards, spending every dollar that came into the house, and neglecting budgeting. I over-drew my checking account more times that I care to say. I sold books to go out to eat with friends. I bought things I didn't need. I borrowed from one credit card to pay another. I canceled my health insurance to buy a car that I "needed." Of course I rationalized that I could afford a car that was financed so that the payment was equal to what I was paying for health insurance. I cried, stressed, read books, and thought I would live under debt, paycheck to paycheck for the rest of my life...or at least until I married rich!
Then I went a whole weekend without any money at all. No room on my credit cards and an overdrawn checking account. Fear set in and I knew I needed to change my life.
Around this same time my dad introduced me to Dave Ramsey. He got me started with an emergency fund of $1,000 that was JUST for emergencies. I read The Total Money Makeover. With help from my dad and Dave, I had the confidence and courage to get on a plan. For the first time ever, I had hope with regard to my finances.
As I was getting on a plan, I lost my job. Suddenly. Thankfully, I had a plan and knew that I would be okay. I had lots of free time to babysit and work odd jobs. I used severance to kick-start my debt snowball. This was April of 2007.
Over the next couple of years I paid off three credit cards (one small, one medium, and one large), a car with a VERY high interest rate, and I made a dent in my student loans. I also paid for a wedding, several moves (including one to Louisiana!) and mostly paid for graduate school. I'm paying off my smallest student loan this month. (Note: Smallest does not mean small. It was most definitely NOT small!)
It's been years since I overdrew my checking account, bounced a check, or borrowed money. As I've written, we're slowing climbing our way out of debt. Thankfully we don't worry about money - we know where it's going and we have a safety net. We're on the same page - we have a budget and we stick to it.
Is this fun? No. But it's much better than the alternative. We have peace and while we're not free of debt, we can see the light at the end of the tunnel.
I am so thankful for the foundation that Financial Peace University provided me. Now I know the difference between whole and term life insurance. I know what PMI is and how to avoid it. I know why not to lease a car, buy a new car, or lapse insurance. I know how to budget an irregular income and what kind of insurance is essential. We tithe our income to our church not simply because the Lord requires it, but because we know it is important to our church. God has blessed us incredibly and someday we will give much more than 10%.
Maybe you didn't have to learn the hard way and found peace without hitting bottom. If you are anxious about your finances or struggle to take control of your money, I encourage you to find an FPU class near you. If you are local, sign up for the class that I'm teaching.
Need more encouragement? Check out this video.