Happy Financial Independence Day!!

photo courtesy of Will Hirzy

No, we're not Debt-Free yet, but we have lightened our non-mortgage debt load by almost $15000.00 since October! That's more than $1600/month going straight towards debt on average! WOW!

It is with this in mind that I randomly deem today July 3rd, 2008 as

Financial Independence Day!

While on this debt-dumping journey I feel it's important that you take every opportunity to celebrate your progress in various ways. Some of the celebration may be legitimate, and some of it may be random, contrived, or just plain non-sensical. (Ahem - like this post) But no matter what, the fact remains that the accomplishments should be recognized whether great or small.

We've only been at this for 9 months and so many positive things have come about as a result of this experience. This blog, many of the friends we've made, the lives we've touched and the people that have touched ours - much of it has stemmed from our mission to wipe out our debt for good! It is truly changing us and the way we use ALL of our resources, not just our money. This thing is deep!

Monday will be the one year wedding anniversary for my wife and I. And I can truly say that I never imagined it could be THIS way. Now, hear me out... Marriage has lived up to every expectation and hope that I had, but before the debt-freedom initiative entered our lives, I had envisioned a life where I was going to have to work much harder for the happiness of my family. I was willing to sacrifice -- for my wife and future children -- the thought of possibly NEVER retiring so that I could make ends meet, put the kids through school and one day build a dream house with my wife. But I never, NEVER thought life could be lived this way. I'd never seen it done, I didn't think it was realistic, and everything about my lifestyle and buying habits was completely opposed to it.

This experience has taught me that ALL of those things and more WILL be possible because of the sacrifice we're putting in now. And we're still only at the beginning it seems. We've knocked out just above 25% of our consumer debt excluding the mortgage. And as you'll remember we've paid off 10 of the 30 -- or one-third -- of the accounts we started out with.

I'm not saying it's been all easy street, but it's been well worth it. I see my family walking with a vision and a purpose that is both awe inspiring and humbling. I never thought I could be 'this' guy. To my wife of one year, I hope you hear the excitement in my voice, this one’s for US!

So yes, we still have a lot of the 'baby' present in our 'baby steps' lol. But we are making great progress...

And that to me is cause enough for celebration,

@W

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A Look Inside Our Weekly Budget Meeting

Photo courtesy of rubymatt

My wife came up with this great idea for a post: a brief walkthru of our weekly budget meeting.

I'm sure some of you out there who are just starting out have experienced the 'thrill' of the 2 hour budget meeting, but I assure you it will get better. The more consistently you meet, the faster the meetings will go in the future. You will soon find that both you and your spouse are improving the way you both approach and communicate about finances.

I remember back in October when we first started having meetings.... pure disaster! It would take forever for us to get through it, and just the thought of how our finances looked at the time caused a great deal of tension. Many nights we didn't even want to sit down and look at the budget because we just KNEW it was going to end in silence, or frustration, or that defeated feeling when you know you've got more 'month than you do money'.

BUT YOU MUST KEEP AT IT!

You have to consider the first few meetings like Training Camp. When the team gets together to shake off the rust of the off season and learn what direction the team wants to grow for the season. You learn your routes, learn to read your teammates, and learn how to respond to game time pressure. This is where you solidify your financial chemistry with your spouse which is extremely important because...

How you arrive at decisions about your money is just as important as paying down the debt.

If you are married, this must be a team effort and you both need to have equal say. If you both can't agree how to proceed, Husband it's your call. God made you the head of the household for a reason and this is one of those times when it counts. BUT it usually doesn't even have to come to this point because there is almost always a mutually agreeable solution... or at least there should be. However if it does come to this point, I urge you husbands to make your decision in a way that will best serve your family, not just to 'have your way' or make a point. Sometimes the wisest decision a husband can make is to listen to what his wife says and act on it.

Time is of the essence...

Your weekly meeting should not be a long drawn out event. In fact the shorter the amount of time you take, the better as long as you cover the basics of your meeting. The meeting should be viewed as a tool to keep you motivated and informed of your progress from week to week. I cant stress enough that the first few weeks wont look or even feel good, but soon after you will see the progress, the preparation, and the peace that comes from being on the same page with your spouse.

To help you increase the impact and efficiency of your budget meeting, I've broken this post down into a few sections.

- Establishing an agreeable meeting time.
- Finding a place outside of the home where you can meet.
- The tools you should have handy.
- The Objectives you should meet at every meeting, NO EXCEPTIONS.
- Goals to set for the next meeting.

Times that you should NOT be meeting:

-Late at night - It can RUIN you sleep for the night...

-Early in the morning - It can RUIN the day ahead...

-When either of you are sleepy, cranky, hungry or watching 'the game' or Iron Chef. lol

Any time other than the three I mentioned is highly recommended.

Rendezvous Point:

Where you meet helps determine how effective you meeting will be. I don't recommend doing them at home because you can easily be distracted, or tempted to multi-task other things at the same time. Instead, I recommend meeting at a coffee shop, restaurant of public library (my personal favorite). It's good to find a relaxing environment, but not a cozy one. Or if the weather is decent you can meet outside, the fresh air will help you concentrate.

Tools of the trade:

-Prayer, always start with it!

-An agenda of the items you want to focus on.

-2 copies of the budget. *You will both need your own copy for note taking, doodling, and editing, because your budget NEVER stays as it was first drafted.

OR

-Paper to take notes. *Trust me by the 2nd day you'll have forgotten everything if it isn't down on paper. This saves you from recapping all of last weeks' meeting this week! lol

-Resource materials such as The Total Money Makeover, or the book/program you may be following. *This is optional, but helpful to have at the ready. Don't try to do it all yourself, there is plenty of help out there available to you, most of it free.

Prime Objectives: (If nothing else gets discussed, these are a MUST...)

Naturally there are topics that you should strive to discuss every time you meet. Here are a few, but your list depends on how you both approach things.

-"The 4 Walls": Food, Clothing, Shelter, Transportation.

-Know your next payday.

-Know what dates each expense/payment is next due.

-Know who does what: who's calling the creditor, writing the check, withdrawing the cash, dropping off the payment, addressing the envelope, putting the stamp on it, purchasing the stamps if you don't have any, and who's placing the envelope in the mailbox. *The 'who' does not and should NOT have to be one person. This is a team effort!

-Know when each of the prior items should be done by.

Close with a look ahead to the next meeting:

-Have tangible goals you would like to see completed by the time you next meet.

-Discuss payments, conflicts, possible problems you foresee on the horizon.

-Propose changes in strategy or format. *This can be helpful because your partner wont feel like a suggested change has been 'sprung' upon them. It gives them enough time to think and digest the suggestion in time for the next meeting. It's both a considerate and fair way to voice your objections if you don't like how something is going. And it also means your not just 'complaining' about the process, your bringing a solution to the table.

Well that's about all there is to it! If you take some of these things into consideration going forward, I'm sure it will help smooth parts of the process out for you. And as always if you have any suggestions of how you and your family do something differently, please let us know in the comments section!

Till we 'meet' again... get it? lol

@W

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How To Remain Generous In Your Giving While Getting Out Of Debt

Photo courtesy of monoculaire

The title of this post is a little oxymoronic, isn't it? For those of you who are on the debt-dumping warpath, I'm pretty sure you've struggled with how to continue your generous ways while seemingly pinching each and every penny till it screams.

Well, below I've listed a few observations that I've learned from people I consider to be generous givers who also just happen to be turning their finances around at the same time. I've noticed these traits frequently enough, and across a broad enough swath of people that I thought it warranted listing them for all to see. (If you think of any that I missed, please let me hear from you in the comments!)

*Also a quick note of clarification: When I refer to 'generosity' here, I mean separate from Tithes and Offerings given in church. I'm talking about street-level, everyday, practical giving.

1. Generosity is a character trait - Getting out of debt is not.

Being charitable for most people cannot be turned off and on. Either you are a giving person or most likely you just aren't. Now you can become more frugal and still maintain your generosity, but you cannot be stingy and expect to still be considered generous at the same time. Being frugal means that you are simply more considerate of getting the most value out of your money and the resources you acquire with it. Being stingy means you are miserly, or selfish with your money and usually have little regard to the true value your money holds.

2. Generosity often has little to do with just money.

Too many people equate generosity with how much money you donate to charities, and other philanthropic foundations. But I'd venture to say that financial giving is only the tip of the iceberg, not the iceberg itself. You can be generous with your time, energy and talents more easily than you can with your money. You can be generous with your faith or your spiritual gifts. You can volunteer towards causes you have a passion for.

Do me a favor and look closely at the picture at the top of this post. I chose that picture for this post because the donation box didn't say what to donate... so the people who did give something gave freely. To me it serves as a metaphor for the many ways you can show your generosity while staying true to your mission of becoming debt free.

3. Generous people excel at assessing genuine 'needs'.

(Brace yourself this is gonna be my 'soapbox' part of the post lol)

Many people in our society have formed the nasty habit of describing their 'wants' as desperate 'needs'. It's gotten to the point where the line between the two has completely faded in the minds of many people. This blurred line between wants and needs is one of the general contributors to the cycle of debt and overspending we see today.

Because of this, generous people need to be selective in who, what, when, how, and why they give of their resources. Being carelessly generous can sometimes do just as much harm as being selfish or scrooge-ish.

Years ago I was downtown for lunch and came across a homeless man begging for change. Naturally he asked me for some money so that he could get some food. I told him that I didn't have any change but since I was on my way to lunch I would buy him anything he wanted to eat. Amazingly he turned ME down. At first I was offended, but soon realized that he didn't 'need' to eat. In fact I later learned that he didn't need the money at all. Get this - he wasn't even homeless, he was simply too lazy to find an honest, stable job! He spent his days staking out prime pan-handling real estate -- The White House, The Capitol building, Georgetown, and local tourist attractions etc.-- and making about $100/day doing it!

The moral of this story -- all of it true -- is that people don't always need what they say they need. The other moral is that if anything, we NEED to be careful of giving to every seemingly good cause. Again this goes back to being frugal vs. being stingy vs. being an aloof giver.

4. Generous people have a firm grasp on the concept of 'Blessings of Increase'.

This past Sunday, I took my bike out for a ride. I didn't want to carry much in my pockets, so I only took my driver's license and a $20 bill. Somewhere along the way, either coming or going I dropped that $20 bill. (Which was a large chunk of my food money for the next week) Upon realizing that I dropped it, I was initially disappointed -- in part because I was now in line to order some food lol -- but I quickly got over it and hoped that my 'lost' bill would 'find' someone else when they needed it most.

Though I lost $20, so what! It will be replaced in the first hour of my next working day. Instead I realized that I gained a blessing (multiple actually) in the fact that the next person who finds it will be pretty hyped over it. Another blessing for me was that I was ok over losing it. It was another timely reminder of the Financial Peace that I continue to gain as we eliminate our debt. I could've obsessed over what a nice snowflake $20 dollars would've been, yada yada, blah blah. But as I said before, so what! I could've lost my driver's license instead of the $20.... and then I'd really be getting some use out of my bike!

5. After you get out of debt, there's no limit to how generous you can be!

The title of this post is "How To Remain Generous In Your Giving While Getting Out Of Debt". Yes, you already knew this, but i just wanted to point it out again because it's meant to be a transitional concept. You are not always going to be 'getting' out of debt, one day you'll just be 'out'! (Can I get an AMEN?)

Baby Step #7 of Dave Ramsey's Total Money Makeover is simply this: "Build Wealth & Give!"

Once you're out of debt for good, it's my hope that you will carry on the obligation of helping others to get out as well. It will truly be one of the most generous things you do with your new found financial freedom!

6. Generosity is a core responsibility for the Christian.

A compelling promise is given in the bible to those who chose to be generous in their giving. It is found in Luke 6:38*:

*Taken from the NIV translation:
Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.

This is the basic formula for the blessings of increase that I mentioned in point #4. But just like bread cant be made without yeast, this recipe is useless without a loving spirit. There is no such thing as malicious giving. And although there is such a thing as indifferent giving, it's just as pointless as not giving at all.

The recipe given in Luke 6:38 simply cant be followed by just anyone. It's the hallmark of a seasoned chef, one who has come to understand and know the six points laid out here.

So with that I ask you, what's cookin'?

@W

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