I remember applying for my first credit card. I was 18 or 19 years old. I was living on my own, had a full time job, a new car and all the expenses associated with all of that. With time, my car needed maintenance done to it, to help keep it running smoothly, which included tires. I didn't have the money for new tires and didn't know, at the time, about used tires so I applied for a credit card to help me pay for the upkeep of my car. In my head, I rationalized getting this piece of plastic. I told myself it was a need. I qualified, bought my tires and was on my way.
I hardly used the credit card but for rare times when I felt it was "needed". I still have it today, but usually keep it at a zero balance. See, I was raised in a home where my parents didn't use credit cards that often. They handled their finances wisely. They paid cash for most of the things they bought. I'm fortunate to have a husband that came from a similar family background when it came to debt and staying out of it.
This coming July, my husband and I, will be married for 15 years and the only debt we have is our home mortgage and a small student loan. No credit card debt. No car loans. We are blessed.
Our philosophy is to always pay cash for things we want. If we do not have the money to pay cash then we can not afford it. Simple. We save our money for the things we would like to purchase.
Do we have a big screen tv? No
Do we have brand new cars? No
Some items we purchase second hand, like kids clothes. They grow so fast!
What we do have is almost no debt and good credit.
Every time we get a paycheck, we go over our simple budget. Groceries, bills and gas money get paid first. Anything else is discussed between the two of us on whether to purchase now or wait. Of course, we budget in a date night here and there, if we can afford it. All left over monies, if any, go in to the savings account.
We do not keep up with the "Jones's".
We do not spend over our income.
All our needs are met. We have a cozy home, two vehicles, two laptops, a tv, internet, cell phones, plenty of food on our table and clothes on our back.
Spending more money than what you bring in will lead you down the dark road of out of control debt.
Of course, we could go out and get the bigger, nicer TV, car, home, add a boat in there and then some but we would rather not have the added stress and burdens that, being in that amount of debt, brings along with it.
Let's say you can comfortably make all those monthly payments for the things you have purchased on credit. That's great your job pays so well, but what if tomorrow you get in an accident and had to be out of work for several months to heal? Or What if the company you work for goes under or downsizes? No one is beyond the hardships of a layoff. Are you prepared? God forbid those situations would occur to any of us, but life happens and we should be intentional about being prepared for the security of our family.
Some financial experts suggest having a 3 to 6 month emergency fund for such hardships in life. Do you know how much it would take to pay all your bills and provide for your family for 3 months? If so, do you have that in your savings account? If not, than you can not afford the stuff you are purchasing on credit.
I know this probably sounds backwards and maybe a tad harsh. I understand in today's society it is shoved down our throats and widely encouraged to buy bigger and better than everyone else around you.
However, who is there to help with the spiraling out of control debt problems?
There was a daily average of 3,422 bankruptcy filings in February, compared to 3,804 from the previous year. Total February bankruptcy filings were just over 65,000.
We have created a very simple budget, that we use regularly, to help us see where our money is going and what we are doing with it. I would like to share it with you. Click on image below to get your FREE Printable Simple Budgeting Tool.
It's time to take baby steps to get out of debt. Be patient with yourselves.
Read this post I wrote on 10 Ways to Save Money.
If you have any questions about the simple budgeting tool, please do not hesitate to ask.
I strongly encourage you to Pray over your finances and ask God to give you discipline and wisdom in handling your money in a way that honors Him.
Have you paid off any debt lately? Share in the comments below so we can congratulate you!
More than blessed,