Debt only works in an idealistic world – A different perspective on credit.

By Sarah Brinker

Earliest memory of Debt

My earliest memory of debt was when I was around 14 years old. There was this video game I so badly wanted but didn’t have the money for. My mom agreed to loan me the money but required me to write up a contract stating that I would pay her back a certain amount of my allowance each month until the debt was paid back in full.

It was in that moment I signed my very first loan. I had the advantage of growing up with a mom who worked as a debt counselor and later became certified as a financial planner. She saw first hand what debt can do to destroy the lives of people and how building wealth was important for a person’s future. She walked me through taking out a loan on a car at the age of 16, gave me my first credit card at the age of 18, and when I graduated from college, she sat me down and we worked out my first budget at the age of 22.

Good life lessons are those we learn from

I am thankful for those lessons because I believe I would not be where I am today without them. I learned to be responsible with money and debt at an early age which helped me make (mostly) responsible decisions.

While dating my future husband, we had many discussions about personal finances. He did not grow up learning the same principles I did, but then again, he didn’t have a parent working in the business of personal finances to teach him those qualities.

As he became independent of his parents, he faced many financial struggles. Expectations were set early on in our relationship that we would not be a family who would be irresponsible with our financial decisions. I wasn’t willing to enter that world and he wasn’t willing to ever go back, so we did all the right things.

We only took out debt we could afford, and we never carried balances on our credit cards. We budgeted well and if we wanted something it never crossed our mind to save for it prior to buying it.

We’d charge it on the credit card and pay it off out of the next paycheck or we’d take out a loan and try to pay it off early. Even though we were responsibly paying what we owed, we got into a cycle of instant gratification and failed to practice the discipline of saving/waiting.

What was the point when we could get what we “needed” right when we “needed” it, and pay for it later? As a result, we were living a life where we were constantly paying for the “thing” we bought last month.

A shock is needed to set the right course

We have good friends who decided to follow the principles of a certain individual – Dave Ramsey. Our friends paid off their $124,000 of debt in 32 months to become debt free. I was shocked that anyone could do that and began feeling a tugging at my heart that there was something to this.

I spent time reading Dave’s books and listening to his Podcast and I heard stories of people making less money than us paying off debts higher than ours! Dave Ramsey has a program called Financial Peace University where he teaches 7 Baby Steps to show you how to save and build wealth.

It all seemed hopeless

My husband and I were sitting at about $30k in debt (not counting our house) which included a truck, small business loan, cell phones and a loan against our 401k for the down payment of our house. This is such a normal thing in our society; so why was I feeling so hopeless?

As Christians, we are taught that the borrower is slave to the lender, and I couldn’t think of a better way to describe how I felt. My husband was working in a job where he was not utilized to his fullest potential, and I was working in a job where I enjoyed what I was doing but felt called to step down from my leadership role.

The problem was that we felt trapped by our paychecks. We felt that we needed to make a certain amount of money in order to afford our payments and we were scared to make a change in our career that could potentially put that in danger. We also dreamt of all the ways we could use the money that God has trusted us with to bless others, but we weren’t in a position to do so. I became convicted that we needed to get rid of our debt and truly live a life within our means.

Finally Taking charge

In June of 2017 we began our journey to become debt free by cutting up our credit cards and closing the accounts, and in April of 2018 we finished paying off the last of our $30k non-house debt. During this time, we began to feel the chains loosen and we were able to shift our careers into areas that have brought us much more fulfillment.

Sure, we’ve had emergencies arise and unexpected expenses come our way but let me tell you about the complete peace we experience. When you decide to never take out another line of credit you have no choice but to make decisions involving money that fit within your means.

After thoughts

This often means, especially in the beginning, that you must get creative or be uncomfortable until you can save cash to address it, but I can promise you it is worth it! You see, debt only works when it works. If everything in your life turns out like you thought it would, then debt always works. But I’ve figure out that nothing ever turns out exactly like you thought it would.

Come back next week for part two of my guest blog post where I will walk you through some of the principles that Dave Ramsey teaches on living a debt free life, how we are applying them to our life and how you can too!