An article posted by CBC entitled ‘Household debt loads inch higher: StatsCan’ poses the serious question – how many of us live beyond our financial means? The art of saving before spending has been lost upon previous generations, despite the ongoing success of financial writers such as Gail Vaz-Oxlade, Suze Orman, and Dave Ramsey who tell us that the only way not to stress yourself financially is to practice this art of saving.
It surprises me that, especially given the recession we experienced and especially watched in the US, people still don’t care if they can’t pay off their credit card (or cards, as it usually is) at the end of the month. I knew a girl who told me, ‘Why would I pay off the whole thing if all they tell me I need to pay is $15?’ I am still baffled at this lack of education in terms of finances. I admit completely that I am no innocent in this; budgeting was hardly passed on as a mandatory skill through my formative years at home & school. Honestly, it was only after marrying Andy that I really started to learn how to save. Living pay cheque to pay cheque, even if your income is more than your expenses, is completely and utterly contrary to good stewardship.
Too often our money, how much we have, and how much we give in to instant gratification is what gives shape to our lives. Instead of money helping us to live, we live for money. Instead of us ruling our money, our money rules us. I highly doubt that any of us do this intentionally. However, I would say most of us do this out of ignorance or negligence. I am happy to say both of which are curable (especially happy for me!).
Currently Andy and I are using Dave Ramsey’s audio cds to help us refine our budgeting skills, and they’ve been very good (the exception being the American-based references that are not applicable in Canada). Gail also highly recommends this action: first step, cut up your credit cards. You. Don’t. Need. Them. If you do, then you’re living outside of your budget. Cash in hand will always speak louder than O.A.C. (On Approved Credit). This is definitely one area we’ve struggles with. Questions always seem to arise: ‘How will I pay for groceries?’ ‘What about purchases I can only make online?’ ‘Do you realise how many air miles I’ll lose out on if I get rid of my cards?!’ Honestly, it really comes down to this: if it is making me sin, I must lose it. Groceries: we now use cash. Online purchases: find a local dealer. Question whether you truly need it. Last resort – pre-paid credit cards (though we’re still working through this step). Loyalty points: get. over. it. We’ve weighed it on a scale: debt or loyalty points? money ruling us or loyalty points? I do believe there is a time and a place for credit cards (they are not evil. they are not the devil), but we need to master the art of learning how to manage our finances before we place ourselves in disaster’s path. I speak from experience; while in the States the only way I could get a credit rating (so that I could get a phone, not have to pay extra fees on items, etc) was to get a credit card. Catch – I had to pay a $100 fee and my limit was $200. In order to manage things, I felt it wasn’t enough, so I got another credit card, approved limit of $300. After 6 or 9 months I applied for another one, this time I had an approved limit of $1000 (which was finally enough to get a flight home). However, I didn’t stop using the other two in favour of the one. Pretty soon the pay cheques were going almost directly to paying off the credit cards. I never felt like I had money. I never felt like I could work towards something. I did feel constricted. I did feel opportunities fly by when all I had to work with in terms of money was a credit card (or fake money, really).
Things can change. Things have changed. The art of saving, while always being refined, has helped to change our approach to life. It’s easier to say no. It’s easier to recognise when my desire for instant gratification (ie. shoes, purse, clothes…those are definitely my downfalls, along with home decorating items) is calling out of me. It is hard to say no. But it is an option. Andy and I are choosing the way we go about purchasing a house (basically how can we best be stewards of our money). We will not purchase a house with less than a 20% down payment. We will not have a mortgage longer than 15 or 20 years so that we can then put that money towards future education of our children. Currently that means our price range is $150,000 (read: out in the boonies or rent). Despite the fact that I am sick of renting and that I want a permanent, stable place to raise my family, the option that we are choosing is to rent and save over mortgaging long term and under 20% which would mean an unstable financial situation (which is much worse environment to raise my family).
Choices. We have the option to make ourselves better. We have resources to help us make better decisions (read: library). What strategies are you using to be stable financially? Where do you want to be in 20 years, and how will you get there?
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His make-shift pillow (what a cutie!)
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Our second-last outing with the Iversons (so sad!)
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Enjoying the breeze by the river!
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Elizabeth helping walk