Thursday, December 20, 2007

Debt Free!

Today is the day that my family owes no one anything. Our house is paid off, we never owed anything for our cars (we paid for them outright). Our schooling was taken care of (my wife is extremely smart and I was lucky enough to fool the school into giving me enough academic scholarships to get by without paying anything, plus an older woman in my old home church believed in why I was going to school and picked up the slack) and everything else we have, we bought out right. So there it is. Debt free. I don't really feel different but I will tell you this much: It is freeing to know that if something happened tomorrow we would not have to worry about what we are going to do about this bill or that bill. That feels nice.

Just to give a little more information, back when my wife was a still at University we got married and lived in housing on campus. We did that for a year and all the while looked for a house via a friend of ours who is in the real estate business by the name of Jon Putt. One of my stipulations was that we had to have the house paid in full in 5 years so it had to be in a certain price range. We found the perfect house, did some work to it and here we are 2 years and 9 months later with a fully paid off home. Now we can really do some things we want to do with the home. I am now 27 and my wife is 25.

Some resources on getting out of debt and understanding money can be found at Crown Financial Ministries as well as Dave Ramsey.

Some questions:
-Why is this type of mentality not the norm in our American society?
-Should 15 year mortages be the status quo or should we be more aggressive in buying things we can afford in a timeframe that reduces risk?
-What single purchase do you think brings about the biggest possible risk for an American consumer?
-What does scripture say about being fiscally responsible?

15 comments:

Tim Ellsworth said...

Congratulations. I think you should celebrate by buying my lunch.

j razz said...

I didn't get out of debt by buying other people's lunch Tim :)

j razz

Timm said...

Congrats! That is very exciting. My wife and I are debt free except for the house and we will be going full steam on that one as soon as our emergency fund is built up enough.

I think that the number one issue in America is the standardization of Credit Cards. One hundred years ago they would have thought us crazy for financing a Pizza, but that is essentially what Credit cards allow us to do.

I'm also amazed that people are willing to finance a Car that loses 40% of it's value as soon as you drive it off the lot.

Timm said...

Did you come accross all this finacial know how on your own, or did your parents teach you?

On that note, what steps are you planning on taking/are taking with your children to teach them these values?

Laz said...

Congrats J!

j razz said...

Did you come accross all this finacial know how on your own, or did your parents teach you?

Sadly, my parents did teach me. I watched them (and still do) struggle with finances and having to borrow money from the bank for even the smallest of emergencies. When I try to talk to them about a budget the response I get is, "you have to have money to budget it". Isn't it funny how my wife and I can be doing so well and they see that and they can still make a statement like that? So, yes my parents did teach me... to hate debt and not to buy things I could not afford to pay for up front. Of course, there was no way I could do that with a house first off but I do not ever plan on taking out a loan for a home again.


On that note, what steps are you planning on taking/are taking with your children to teach them these values?

I think it would have been great had my parents have included me on the bill paying and helped me to understand that I am a steward of the money entrusted to me. I think this will definitely be a part of our family when we have children. I also think it wise to explain to them and lead by example at an early age how to save money and how to be prepared for emergencies, etc. I also think it would be wise to teach them the value of a dollar by letting them earn money.

Of course, since we do not have children currently, I have not implemented any of this, but I hope to think through it better and find teachable moments with our children so they can learn by example as opposed to mistakes.

j razz

Kellye said...

Hey Jer,

I think you should consider teaching money management class for some of us who need it. Maybe you could use the Crown material. I will take it! If I can afford to buy the book:)

j razz said...

To be honest Kellye, I have not used either of the resources I cited. I have listened to both radio programs on occassion but I have never bought their material or went through the programs. I guess I was just hardwired through experience to not be okay with being in debt.

j razz

Timm said...

I'm not familiar with Crown Financial, but I can tell you that Dave Ramsey teaches Common Sense at best. Unfortunately, most of us push common sense to the back of our minds in favor of the financial myths that our society teches us. Such as, "You have to have credit card debt to build credit," or "You have to have money to budget it."

j razz said...

I will say this concerning the difference in the two. Larry Burkett (Crown Financial) helps you to have a biblical foundation upon which to build your ideaology concerning finances. He deals more with concepts and biblical thinking while Dave Ramsey deals more with the practical/commonsense aspect of money.

j razz

Timm said...

Ahhh... I didn't realize that Burkett and Crown financial were one and the same. Ramsey credits Burkett fairly often on his show. He learned a lot of what he teaches from Burkett. I'll have to check out Crown Financial.

misawa said...

Woo-hoo! Congrats, J! That's an awesome feeling that I hope to have in a year or two when college gets completely paid off.

Concerning your questions, I have taken to telling people - especially my former classmates that were about to go from $7.50/hr jobs and eating ramen to $50K/yr and not eating ramen - to live within their wage (as Dave Ramsay puts it). Thus, they're not a slave to anybody.

B Nettles said...

Jrazz and A., that's great news! It IS a wonderful freedom to enjoy, and gives you freedom to be charitable, too.

Misawa, yeah, living within the wage is a large part of it, but without a perspective that the Lord God has supplied your needs and knows your "today" situation, people get dissatisfied and try to live in "the future" imagining a bigger income.

Of course, prosperity is NOT the goal in being debt-free. Glorifying God through faithful stewardship and ministry, being a wise conduit of resources--those are parts of this journey.

GalatiansC4V16 said...

Way to go j razz! Congrats buddy!

Kellye said...

I have heard good thing about the Crown Ministry. I think that Cafe 1040 uses them for ministry budgeting and individual staff members have to go through the program.