How do we do it?

There’s no question that we’re paying off a load of debt every month. It’s obvious that many of our peers, regardless of current job situation, are plugging away on minimum payments every month, headed for a ten- or twenty-year payoff date. Some do this while leasing new (“reliable!”) cars, gaining mortgages on big houses, and enjoying luxuries like vacations, eating/drinking out, and new electronics. (Caveat: I was a music major, so my friends from college who pursued the arts as a career are often literally hand to mouth, a situation I do not envy).

We’re big believers in the money management principles set forth in the Dave Ramsey / Total Money Makeover plan, known as the “Baby Steps.” After putting aside an emergency fund, you move toward paying off all of your debts smallest to largest in what’s known as a debt snowball, building psychological and financial momentum moving toward freeing up your money for investments, building wealth, and a lifestyle of extreme generosity.

Within a marriage, to work a generalization, one partner is often a spender (the “free spirit”) and the other is often a saver/numbers person (the “nerd”). Opposites attract, right? (This old clip gives a pretty succinct explanation.) It’s probably obvious to most people that I am the free spirit in this marriage, often buying things for all kinds of reasons… it will solve my problems, it will be fun, it will make a nice gift, it’s a good deal, it will come in handy, I will totally do that project when I have time. I discovered that I even buy things to prove to myself that I am “not poor.” As I started to think deeply into my motivations, the revelations started to make me blush. My relationship with money is rooted in feeling like there’s never enough DESPITE MY MIDDLE CLASS UPBRINGING, and is tied into a deep fear I cannot yet name. I suspect that having signed on for huge student loans I didn’t understand as one of my first independent adult choices fuels many lingering feelings of anger and frustration.

As we move through this year making intentional choices to live on less and eliminate extra expenses, I do not find myself less content than when I was ignorantly buying whatever I wanted in previous years. I’m focusing a lot of my energy on finding creative solutions when I want something, and learning to defer large purchases in order to Make Do with Less, or Old, or Borrowed. There is deep satisfaction in finding a good solution to a problem without having thrown money at the issue (an old habit I’d like to eradicate from my system).

When we talk with people about our project, I often find myself sharing a few bullet points:

  • We stopped buying things we don’t need.
  • We spend less on things we do need.
  • We spend more on certain things we value (locally sourced goods).
  • We carefully audit our entertainment options. Eating and drinking out is rare, as is spending money to do “fun” things. (Plenty to do in Portland for free!).
  • Ali makes me a sandwich every morning for lunch.
  • We use the library more. And public transportation [Ali]. Shared resources are wonderful.
  • We rent a fully furnished, small home. Without the need to fill space with furniture, and no place to store extra things, there is little motivation for aimless shopping trips. (This is a surprisingly helpful factor.) Also: no repair/maintenance costs and all utilities included is a huge point of savings.
  • I got a job. Our income is up, with a second steady paycheck to help supplement our debt snowball.

I’d like to talk more about Day Job versus Self Employment later. And Bringing Lunch. And Public Transportation. They all deserve their own little posts.

Final point for today: if you followed the link above, you may have noticed that the last baby step is to give generously. If the end point of the lifestyle was piles of wealth, I would not be on board with the program. Instead, the end point is the word “GIVE.” I love hearing Dave speak about this topic, because he gets almost giddy encouraging people to get rich and give it all away. I am excited and look forward to months in the near future when we have freed up funds to give more away in support of people doing Good in the world.

5 thoughts on “How do we do it?

  1. mdog

    i would say that you have no idea how much pleasure i take in seeing consistent, responsible financial choices [regarding you or anyone, really]… but i’m pretty sure you do, on many levels :D

    [fyi: i think i will hit payoff by our ten year anniversary! woohoo!]

    Reply
  2. rachel Post author

    Maria, I think I do know but it’s always nice to hear. You should send in some Spencer Mail with a challenge for us!

    Reply
  3. Betsy

    This is an interesting blog. It has definitely started some challenging conversations between me and my fiance, Jason. We’re planning on getting married in November (read: more debt!) but working on getting our ridiculous student loans paid off is not the priority it could be. Thanks for the inspiration…

    But, if we were to start anywhere, where do we begin?

    Reply
  4. rachel Post author

    Betsy, good for you! I am so happy to hear about those conversations. Money fights are the #1 cause of divorce, so having these conversations before lifelong commitment to one another is a really smart idea. I know you’ve probably made decisions about your wedding that are not “reversible” at this point, but I would challenge you to scale back in ways you can as you continue to plan your wedding event. For example, consider deferring a honeymoon, or doing a smaller/shorter trip than you might have otherwise envisioned. Ask guests to put cash toward a major purchase rather than fancy crystal (down payment on a house if you’re planning on buying, honeymoon expenses, a car or scooter, etc.), choose to borrow a friend’s fancy ride rather than renting a limo, etc.

    If you’re really interested in learning more, the links I posted above are a good place to start researching.

    The first baby step is to set aside an emergency fund. It’s a really, really good foundation. Dave talks about it in his book, the Total Money Makeover (and also on his website). At the risk of sounding like a fangirl, I’ll tell you I subscribe to the Dave Ramsey show on itunes and listen to the podcasts whenever I’m driving. I’ve come to really enjoy his direct communication style and common sense advice. It’s encouraging to be reminded to stick with the program on a daily basis! As the ‘free spirit’ I definitely need reminders.

    Reply

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