Today is the first day of our new budget!! Weaning off credit, paying down debt, and, gasp, saving money.

April Fools Day obviously suits us perfectly as the start of something so revolutionary and life changing.

And, in keeping with His great mercy, the Lord has already blessed our efforts. I ran into a friend last week whose daughter is studying at the Redken Hair Academy.

Time to cut Rachel’s hair.

I cut all the boys’ hair in the family so we save money in that department (thankfully none of them, including Tim, are particular about their hair). The girls, however, are a different story. The expectations for us to look beautiful are higher. It’s a burden we’re willing to bear, with grace of course. Rachel and Sarah both have long hair and only need the occasional trim. I tend to splurge on the rare, but expensive, cut and color.

Have I mentioned recently how lovely it is to have daughters?

What are the beauty academy prices, you ask? Well, let me share with you:

Hair Cuts - $9
Children’s Cuts - $5
Highlights - $29

Those fees are amazing!! I immediately made an appointment for both Rachel and myself. I figured if the haircut turned out well, I could go back for highlights.

Nothing like a fresh cut to improve the day.

Rachel and I were tickled with the ambiance and setting of the hair institute. The academy was professional and tasteful in decor and atmosphere. It felt more like a busy, fashionable salon than a school. Krista did a beautiful job. She was confident and friendly, taking care to listen to our requests and talk through different hair style possibilities. At each step an instructor came by to monitor and approve the work. Rachel and I were thrilled with our extremely affordable and gorgeous new looks. Krista even gave us a tip on the styling brush she used - $7 at Sally Beauty Supplies.

Rachel’s new style is fresh and funky.

Redken Professional Academy definitely works for us! Stop by Rocks in My Dryer for other links, tips and ideas.

Kathy
Project 366 - Day 92

A little more than a week ago, I posted a blog which I whimsically entitled Daylight Savings Time. A rather feeble play on words, I attempted to explore an innovative new idea I discovered: saving money and getting out of debt. I was astounded by the number and quality of responses we received in the form of comments and personal e-mails. It turns out that a large number of people are rather passionate about this subject.

Not one of our actual readers.

“Whoa, there,” I thought. “Most of these people are serious about paying off debt. Some of them think we should actually get rid of our credit cards!” I pulled up a browser window and shopped a while at NewEgg.com until I regained my composure.

Let’s face it: I like having credit cards. I like the feeling of power they engender, and the illusion of value and wealth. I enjoy the convenience and the ease with which I am separated from my money. I value the increasingly-worthless airline miles I earn when I engage in serious borrowing. I even like the mail they send me:

“Dear Tim,” they write. “We’ve noticed that you haven’t reached full indentured-servanthood yet, in terms of the amount you owe us, which is slightly less than Argentina owed to the World Bank in the late 90’s. To tempt you to be even more irresponsible, we’re raising your credit limit to ridiculous levels. You should rush out and buy a computer for every room in your house!”

As we read comment after comment, extolling the virtues of Dave Ramsey’s books and Crown Financial Ministries, we began to feel a bit convicted. “Maybe the time has come for us to actually make a change in how we handle our money,” I mentioned to Kathy, rather hesitantly.

One of the Small Groups at our Church is doing a study using Crown Financial’s book …

“Sounds great! When shall we start? I’ve got our old budget (the one we started last year) right here! I’ve read three chapters of Ramsey’s book, and I have a list of things we need to talk about!” My wife is nothing if not enthusiastic.

I dragged my feet for a week or so, ’cause I like to play hard-to-get, but eventually she wore me down, and I agreed to spend a couple of hours talking about our financial future.

“I’m so excited,” Kathy bubbled. “My friend M. and her husband sat down the other night to talk finances, and they got into a big fight. I’ll bet we can do even better!”

Sure enough, we had a big fight about parenting before we even started talking about money, which demonstrated our superiority and, I felt, put things into their proper perspective. We came to a few tentative conclusions:

• We need to stop using credit cards
• We must build a workable budget that allows us to live within our means, and stick to it.
• We should aggressively seek to set aside $1000 as an emergency fund, so unexpected expenses don’t ‘break’ our budget, or lure us back into deficit spending.
• Once we’ve got the $1000 put aside, we can attack our smallest debt and work to pay it off as quickly as possible.

Dave seems to have an answer for everything.

The more I thought about it, the more I realized that this is not going to be a quick or easy path for us. To follow these simple steps, Kathy and I will have to change quite radically. We’ll have to learn to defer gratification, and to find joy in paying off debt, rather than in the acquisition of ’stuff’. We’ll have to temper our generosity, and live under actual constraints. We’ll have to learn new vocabulary, as in “We can’t afford that right now,” or “We’ll buy that just as soon as we save up for it.”

“Afford? Saved? What do those words mean, Dad?”

It will probably come as no surprise to those who have been down this road, that even now, as we stand on the brink of making a decision to change our way of life, we are facing some considerable expenses:

Not my actual tooth.

1. I’m in the middle of an implant process for one of my teeth that will probably cost me another $1800, after insurance
2. Kathy faces a potentially costly dental process in the near future (cost unknown)
3. Our van badly needs new brakes and other maintenance (ballpark $600)
4. We urgently need to replace the roof on our house (probably around $14,000)
5. We are in need of some homeschooling materials by the end of the summer ($600)

Not my actual roof.

So, what would you advise?

(1) Shall we abandon our well-intentioned, but naive attempt to shake off our dependence on debt?
(2) Shall we satisfy these immediate costs, and only then embark on a course of correction (admittedly, with a much higher debt load)?
(3) Shall we stick to our guns and refuse to go further into debt, even if our safety, our health and the value of our home may suffer as a result of deferring these expenses?
(4) Shall we take some drastic step (sell our house & move back to the country, change jobs, get a second job) rather than accept additional debt?
(5) If we do borrow money to get through these expenses, can I sneak in the purchase of a new computer, since it would be such a small proportion of the money borrowed? (Well, OK, I think I know the answer to that last question.)

Examining my heart, I really don’t know if these are smoke screens or not. Each of the expenses seems ‘necessary’, and my spirit quails at the prospect of abandoning the alternative of credit (I’m afraid I’ve leaned on credit too long). Do I just need to trust in God to provide for each in turn, or is this a case where I can’t reasonably expect God to bail me out from a series of bad decisions? After all, it isn’t God who borrowed money to acquire ’stuff’, and who failed to save for these kind of expenses. The roof, for example, is certainly not unexpected — we’ve known since we bought this house that we needed to replace it. Is it reasonable to live for years beyond my means, and then, suddenly, when I finally get the courage to change, to expect God to save me from the consequences of my misconduct?

She makes climbing look so easy …

These are serious questions. I value the wisdom and encouragement of the many responses we received from the first blog, and I’m hoping that some of you will take a few more minutes to offer your insight.

Tim

I know Backwards Day was last week but my wonderful dh wrote this post yesterday and I just know there are some other Works for Me Wednesday bloggers who have words of wisdom for us regarding finances. Leave a comment, we need all the help we can get!

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This blog doesn’t really have anything to do with daylight savings time, although the recently-lost hour of sleep looms large in my consciousness. This afternoon Kathy and I were talking about a novel concept: saving money.

It isn’t an idea that comes very naturally to either of us, I’m sorry to say. We tend to live ‘in the moment’ much of the time, and (thanks to an excessive number of credit cards) we usually just buy something if it is not very expensive and we want it. We don’t go in for big ticket items, but the steady flow of self indulgent and other-indulgent spending is definitely not under strict regulation.

I looked it up on the internet, ’cause if it is on the internet, you know it must be true. It is sort of funny to see that there is a whole Wikipedia page on the subject of savings — I guess I’m not the only one that needed to research this strange concept.

Don’t get me wrong — we do actually do some saving. My employer matches a part of my 401(k) savings so that I’d be a fool not to put aside 5%, so I do. But apart from that, we don’t really save. We use credit to buy things we need but can’t afford, and (like many Americans) we have some considerable month-over-month credit card debt.

One of the significant problems we face is that saving doesn’t seem real, when you have any kind of debt. It doesn’t make a lot of sense to put money aside in a bank account that doesn’t generate interest, when you could pay off debt that probably costs you at least some kind of interest or fees. But once you pay off some debt, when do you decide that you can buy that item for which you are saving?

Thankfully this stuff only cost a dollar.

Let’s start with a hypothetical example: suppose you owe $5000 on credit cards, and you’re paying 6% interest on that debt. Suppose (hypothetically, remember) that you really want to save up for a new computer that costs $700. What do you do?

One school of thought is that you pay off the entire $5000, before you even think of buying anything you don’t absolutely need. “Attack debt like the cancer it is!” they cry, frothing at the mouth at the idea of debt unvanquished. While such ideas are very inspiring, they don’t really take into account the self-indulgence that probably caused the situation in the first place. When I contemplate this scorched-earth attitude toward debt, and the barren wasteland of consumerism it requires (even for a season), my spirit quails. I’m just not willing to wait that long to gratify my desire, unless I have to.

Another school of thought gives a nod to motivating the saver, and suggests that payments against debt must be made, but (once those payments are satisfied each month) allows saving toward a goal. Supposing that monthly income minus expenses netted $400, they would say, “Spend half on retiring debt and half for future savings.” All other things remaining equal, this would mean that in three and a half months you’d have paid down your debt by $700, and saved enough for the new computer as well.

Maybe Sarah should save up some money for a new hairdresser.

One problem with this is it is sometimes hard to see where the money goes, and hard to avoid dipping back into the debt that you pay off. Suppose I’m two months into my savings plan, and I’ve paid off $400 in debt and saved $400. Suddenly, you realize that you have to fix the brakes and tires on your car, which (hypothetically) costs $700. Do you:

• (a) wait to fix the brakes until you’ve saved the $700, even if waiting may be unsafe or cause further costly damage to the car?
• (b) spend the $400 that you’ve saved toward the computer, pay the rest on a credit card, and start over on your savings?
• (c) pay the whole $700 for the brakes on a credit card and leave the $400 in savings alone, since it is allocated toward a particular item?
• (d) pay the $400 from savings to the brake shop and negotiate for monthly payments (to avoid increasing credit debt)?

Not my actual cash …

Also, how do you actually handle the money? Do you put the $400 in a separate savings account, or do you go ahead and use it (until it is needed) to pay off the credit card?

Perhaps the most widely-accepted school of thought reasons like this: “Once you have a debt that is more than you can easily pay off, you might as well just buy whatever you want (within reason) and try not to let your debt get any bigger. Why get all upset about it, or deny yourself? Sooner or later, you’ll get a bonus, or you’ll sell your house for a profit, or you’ll earn more money … or something will bail you out.”

Of course, this last school of thought may be partly responsible for the massive 2.545 trillion dollar consumer credit debt currently plaguing our citizenry.

Several Bible passages come to mind:

The rich rule over the poor, and the borrower is servant to the lender. — Proverbs 22:7

The wicked borrow and do not repay, but the righteous give generously; — Psalm 37:21

Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Love, for the Day is Near. Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law. — Romans 13:7-8

I know there must be at least one or two savers out there. What do you do? What practical steps do you use to help you get control of your money? Please be gentle — remember, you’re dealing with typical American consumers, thoroughly indoctrinated in the ways of easy credit.

Tim

Husbands - love your wives.

Wives - respect your husbands.

How can this teaching be so simple and yet so profound?

Your spouse isn’t wrong, just different. Can you accept that he or she has needs that you don’t share?

These were some of the questions which challenged us this weekend at a Love and Respect video conference hosted by our church. We went as a family. Joshua and Rachel served in the children’s department, the rest of the kids were, um, children IN the children’s department. We brought treats, welcomed people as best we could in our (always late) manner, and helped put away chairs and tables at the end.

We did walk away with 3 leftover pizzas so the time obviously wasn’t wasted.

Oh, yes and we also left with a renewed commitment to practice love and respect in our marriage. A reminder that we have have tools available to us in a conflict.

In the afternoon we had a family meeting. Time to talk about finances, budgets, and other exciting topics. Nothing like hitting some of the big issues!

We watched some sermon clips from Pastor Mark at Mars Hill Church in Seattle, listened to several discussions on stewardship with Randy Alcorn, and were challenged by some words from John Piper on the prosperity gospel.

Just your typical afternoon viewing.

We ended the day with the rest of our Pollyanna movie.

How about you? If you have children, do you wrestle over the big issues with them? Do you talk about tithing and stewardship? Do you discuss the problems facing the poverty stricken people in other countries? Do you let them see that marriage takes WORK? Do you let them see you struggle?

Tim and I are both spenders, not a saver between us. As our children have gotten older, they participate in our conversations over money, debt and stewardship. They see our weaknesses and faults.

It’s humbling to know they are aware of your flaws.

I hope amidst it all they also see we are striving to grow and follow Jesus.

But he knows the way that I take; when he has tested me, I will come forth as gold. My feet have closely followed his steps; I have kept to his way without turning aside. Job 22:10-11

Kathy