Monthly Debt Update - October 2008

If you do the math you will see that we lowered our debt by a whopping $125.00 in October. I guess the big news so far is completing October without a single use of a credit card. This is kind of a big deal since income and outgo are really tight.

Declaration Of Financial Independence

I have the high interest savings account at ING, currently with about $5.00 in it. Anyway, I was very impressed with their full page ad in USA Today with this "Declaration Of Financial Independence:"

1. We will spend less than we earn.
2. We will use our home as a savings account.
3. We will take care of our money.
4. We will defend our credit worthiness.
5. We will ignore unsolicited credit card marketing.
6. We will know the cost of borrowing.
7. We will invest for the long term.
8. We will take care of the things we have.
9. We will remember what matters.
10. We will be heard.

See the full doc here.

Perry Noble

I love Perry Noble, pastor of Newspring Church in Anderson, SC, for his bracing honesty and his willingness to speak truth.

Here are some recent posts that hit me:

Is God First In Your Finances?
Broke & Stupid?
Top Seven STUPID Financial Mistakes That I’ve Made–Part One
Top Seven STUPID Financial Mistakes That I’ve Made–Part Two

Benchmark Debt Review - September 30, 2008

For the purposes of this journey, I'm using September 30, 2008 as my starting point for where we are starting from financially. My NetWorthIQ graph has an entry for August, but I won't cover that here. September 2008 is when I had my IHHE Moment and so that is where we are starting.

The Big Deal here is our credit card debt so I'll start with that.

More Starting Thoughts

We don't have an extravagant, consumer oriented lifestyle but years of making up shortfalls with credit have led to ridiculous amounts of debt and debt service. Our spending side is already pretty lean so after cutting out all the obvious stuff, we'll get down to stuff that hurts some.

I don't anticipate spending a lot of time chronicling how we got into the mess. It seems more productive to determine where the fat is in our budget now and what behaviors need changed now. I'm going to get into that nitty gritty stuff as I can.

What I know up front is that after I make nearly all realistic cuts, I still have to seriously boost my income with secondary sources so that is something I'll be exploring immediately. Additionally, I'll be trying to move some high-rate/high balance debt around so that I can lower my minimum payments and get more cash applying to debt.

IHHE Moment

Joe Sangl describes it as an "IHHE" moment. A moment when you are fed up with being broke and in debt and when you say, "I have had enough," you mean it.

I have building up to this moment over a long period of time as I've been watching my family's financial situation become more and more precarious. I was seeing my credit card balances grow rather than make hard choices about changes that I needed to make in our family budget as well as exploring other opportunities for additional income.

My motivations for starting this debt-destroying journey are several (in no particular order):

• I've been thinking a lot recently about teaching my kids about money and realize that I've been falling into money handling patterns that were modeled before me as a kid. It is urgently important to me that I live by sound financial principles in front of my children.

• As a Christ-follower it is impossible for me to pretend that I am trying to please Him with how I live my life when I am enslaved by debt and demonstrate a lack of self-control to make myself live by Biblical principles for money management.

• Recently I read this post by Pastor Mark Beeson and was convicted by it:
  

  Personally, the state of "my" economy is driving me into a ruthless analysis of my deepest priorities.
  
  I'm focused on this question: "What is most important to me?"
  
  The answer to that question determines what I'm going to do with my money. I'm betting your answer to that question is a predictor of your behavior as well. We all support what we value. Given the reality of our free will, we all do what we want to do. We spend our money on what we want.
  
  It's still a free America.
  
  We get to choose. Here are my choices, listed in order of importance to me.
  
  1. Tithe to my local church. I'm going to put God first - no matter what. I want the church to be stronger than ever as our economic and geopolitical climate gets scarier than ever. God first. I'm not going to rob God. Period. Whatever else we lose, we can't afford to lose God's help.
  
  2. Save. With economic down-turns comes a renewed commitment to spend less than I make. In tough times smart people obey God and face the facts. God tells us, "Look at an ant. Watch it closely; let it teach you a thing or two. Nobody has to tell it what to do. All summer it stores up food; at harvest it stockpiles provisions.(Proverbs 6:6-8 )" I'm determined to pay attention to my personal storehouse.
  
  3. Honor my wife. I want my money to bless her. I want her local church to be strong. I want her to have food and shelter and "daily bread." The bible says God wants that for her too. I'm standing with God on this one.
  
  4. Bless my children. I want to live with honor. I'm resolved to never disgrace my children or bring shame on them. If I handle my money correctly I'll be one step closer to offering them a legacy of faith and dignity.
  
  5. Bless GCC. As GCC has restricted her budget and tightened her belt (reducing her budget three times in the last few months) Sheila and I are determined to give - above and beyond our tithe - whenever and however we can. We want to make the church stronger in a season when America needs the church strong!
  
  I'm inviting you to ask yourself the question I'm asking myself: "What is most important to me?"
  
  If Jesus Christ, and the work of His Church, are on your "most important" list, I trust you will join us in making your financial support of the church a budgetary priority in the days ahead.

  
  Reading this causes me to realize that the priorities that I would profess to be important are are not the values that I live out in everyday life in the way I handle the financial resources I've been entrusted with.

• A most important motivation after my obligations as a Christ-Follower is that of my marriage and how this relates to my wife. I'm going to cover that in its own post soon.