Get Financial Peace- Part 2
continued…
As mentioned in the last Hot Tip, a difficult season in marriage was in 2008. At the time, my husband was a stay at home dad because I had grown so busy with all of the writing and speaking I’d been doing that we wanted to make sure at least one of us was available to our two children whenever needed. We both volunteered for this “role reversal,” but this meant I was feeling the burden of responsibility of being the sole breadwinner, at least temporarily. And boy, did I develop a new appreciation for men who carry that burden their whole lives just so their wives can stay home with the children! If you’re one of those women, GO HUG YOUR MAN RIGHT NOW!!!
When the economy went sour in 2008, most authors’ book sales went sour with it. Books are like Starbuck’s lattes… they’re an optional purchase that get carved out of the budget when folks have to tighten their belts. (and yes, Starbuck’s stock plummeted that year as well.)
So my income dropped by 50% from one royalty check to the other, and then six months later when the next check came it dropped by another 50%. If I told you that I’m going to cut your salary in HALF within six months, and then in HALF AGAIN in the next six months, you’d probably look for another job, huh?But this ministry is my baby, so that wasn’t an option.
So we had to learn to drastically tighten our financial belts as well… and as a result, our sexual belts received some much-needed slack. Once we got a black-and-white game plan going strong, we were able to relax, exhale, and not spend our evening hours bickering over finances or worrying how we were going to manage. We were able to focus on loving and pleasuring each other again, which is what those bedtime hours are supposed to be all about!
In addition to cutting up our credit cards and establishing a “cash only” system for all purchases as I mentioned in the last Hot Tip, we also took Dave Ramsey’s advice and followed the first three baby steps of his “Seven Tip Plan for Financial Peace.”
First, we established a dedicated Emergency Fund, which is baby step #1. No more panicking when a car broke down or a refrigerator died. Some household expenses simply can’t be avoided, and to have to put stuff like that on a credit card and wonder how/when you’ll be able to pay that off created far more stress on the budget (and us) than necessary. We began with the minimum $1,000, and let it grow from there until we accumulated the 3-6 months of living expenses that Dave recommends in baby step #3. Now we can absorb expensive household emergencies with nothing more than a shrug and an “Oh, well. That’s life!”
Baby step #2 was to pay off ALL debt except our house. This wasn’t too terribly difficult for us because we never let credit card balances build up anyway, and we don’t mind driving moderate vehicles that we pay cash for so as to avoid car payments altogether. Our most recent car purchase earlier this year was a very nice 2004 Honda Accord with 120,000 miles (just getting broken in for a Honda) that we found for $11,000. Do you know how fantastic it feels to be able to write a check for a car and drive it off the lot with NO car payment looming over you? My daughter had a similar experience this same year when a woman hit her and totaled her Scion. As she shopped for a replacement car, she was very determined NOT to spend more than the insurance company check she had in her hand, and after some shrewd negotiations she drove a 2005 Jetta off the lot for $10,000 cash and NO additional payments. That kind of financial freedom is absolutely priceless!
I guess to really understand the value of paying cash vs. carrying a loan on something, you have to understand interest rates. If you were to buy a $15,000 car with cash, you’d pay $15,000. But to finance that car for 4 years at 10% interest, your payments would be $380.44. Multiply that monthly payment times 48 months, and now you paid $18,261.12 for that car! Another scenario is what we do to ourselves when we go on a credit card shopping spree. Let’s say you charge $1,000 of clothes or household items to your credit card, and make a payment of $36.15 each month. Not only will it take you 3 years to pay that off, you’ll have paid 30% more for the merchandise considering the standard 18% interest rate most credit card companies charge. In fact, most companies require you only to pay such a LOW monthly payment, that you wind up accumulating interest faster than you reduce your balance, so you just keep getting deeper and deeper in debt, without even buying anything else at all!
So do yourself and your marriage a BIG favor! Cut those credit cards up, begin paying off all of your balances, establish a budget and a “cash only” system, and begin to SAVE rather than SPEND! Create some wiggle room in your life so that you can spend far less energy worrying about money, and spend far more energy investing in each other!
Wishing you tremendous financial peace,
Shannon
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Excerpted from The Sexually Confident Wife: Connecting with Your Husband Mind*Body*Heart*Spirit by Shannon Ethridge. Copyright 2008. All Rights Reserved. Published by Random House Inc, New York, NY. Used by Permission. Not to be copied without Publisher’s prior written approval.