Journey to Financial Freedom
We got married young (22 and 23) and like most young couples, we made some very naive decisions. In the matter of four months we graduated college, got our first "real" jobs, purchased a (much too expensive) house, financed a second vehicle and started an on-the-side business. What we didn't know at the time was that three of those decisions (car, house and business) would cause major stress that endured for years.
The biggest detriment was the purchase of our house. We financed a house at the tune of $180,000. Payments were ONLY going to be $1,300 a month. This was 45% of our monthly take-home pay. Not too bad, right? Wrong! Not only that, but we spent another $20,000 on furnishings for the home. So, before we had even been married for one month, we were in debt over $200,000. Not to mention our student loan and car debt, and we soon afterward wracked up some huge credit card debt from a bad business decision.
Fast forward one year. We're expecting our first child. Like any first-time parents, we couldn't wait for our baby girl to come. However, she came a little sooner than we would have liked. Alexis Ann was born three months premature. She spent her first 130 days of life in the NICU at Blank Children's Hospital. It took a toll on us. An emotional toll and a financial toll. Not only did we have the expenses incurred from a 130-day stay in Intensive Care, Justin lost his job, and we were putting all of our daily travel expenses to the hospital on a credit card. Ouch!
Fast forward one more year. We were 25 years old and in debt over $270,000. Not to mention we had a fragile daughter at home to take care of. Stress was high. But, God is good! He lead us to a class being offered at our wonderful church. Financial Peace University would forever change the outcome of our marriage and the financial future of our family.
It was NOT easy but in four years, we eliminated all of our non-mortgage consumer debt. We made job changes, relocated, rented a trailer house, and started the quest to save money for a more affordable home for our family. By living below our means, working second jobs and being very intentional about our finances, we saved up enough money to pay CASH for a house. We wrote a check for $78,167 on March 28, 2012. We are now debt-free. It's an AMAZING feeling and we hope to use our story to help others who are in the shoes we were in just a few short years ago.
Here are our tips for improving your family's financial situation and paying cash for a house, if you choose.
- Pray. This is huge. The Bible tells us that all things are possible with God (Phil 4:13). We pray a lot and give Him all of the glory He deserves.
- Give. The Bible also says give, and it will be given to you (Luke 6:38). It's not our money anyway, it's God's money. He allows us to us to be good stewards and manage it.
- Budget. This was key for us in realizing just how much money we were wasting every month. We recommend Mint.com. Setting a budget is key for financial success!
- Live below your means. Downsize if you need to. We went from a 2,000 sq. foot suburban house to a 1,200 sq. foot trailer house. It wasn't fun but it enabled us to save cash to buy our house with.
- Sell your junk. We made an extra $100-200 a month for 18 months by doing this. It took the place of second jobs and allowed us to be home with our kids more often.
- Set financial goals. After seeing our mortgage tax form in 2010 and realizing that over $9,000 of our hard-earned cash was going down the drain in interest, we decided a mortgage wasn't for us. The Bible says that the rich rule over the poor, and the borrower is slave to the lender (Proverbs 22:7), and we were tired of being slave to banks who were getting rich on our mortgage interest.
If you are serious about getting out of debt, we recommend you take Financial Peace University. This class offers much more great financial advice than I provided. We thank God daily that someone told us about this class. It forever changed the financial future of our family.