Family and Finances: Episode 2, Part 2

I want to go back through the list and give people some hope, because young couples are listening now and they're going, wow, that's where we are, that's where we are, or we've done this or we've done that. How do you fix it? And so I want to go literally back through our list, Ann, but for me, it came to the realization that it wasn't more money that was going to fix it, it was the management improvement of what we had that would fix it. And so God had to get our attention, which he did, and we said, God, you own everything, we want to do this differently, let's start doing it your way. And what we did that's not on this list that I think changed everything is we made giving our top priority, because we weren't giving at that time, I mean, not enough. No, and I felt very convicted that we were years behind on giving. Yeah, because we were just laden with debt, so we decided to start tithing. And I remember I thought this is the craziest thing we could possibly be doing when we're not doing all this other stuff, right? But you wisely knew that it would reset our financial priorities. If God would become first, then we would have to fix these other things on 90% instead of thinking that we had to do it by keeping 100%. So we started saving, little by little. And it just took the discipline to start saying no to what we wanted, to start looking for deals, to start buying wisely, to start really reshaping our mindset where we would give first, save second. And that was after 21 years of doing it the wrong way. But that little shift, all of a sudden, we started creating margin in our life. And margin reduces your stress, and it helps you to make better financial decisions just by giving and saving first. And then what did we do next? Got on a budget. So we had to figure out what our, add up all our expenses and figure out how we were going to keep those under the income.

Well, do you remember when we went to a cash budget for a long time, where we literally would divide the cash that we got paid and put it in envelopes? And our premise was we had to spend less than we were earning, otherwise we couldn't give and save. And that brought sanity into our life. I think that's where I discovered garage sales and goodwill. Yeah. And you started saying, whatever it takes, we're going to spend less than whatever we're earning so that we could give and save every month. And then suddenly we started having margin and had stability and emergencies could be paid for. And then we attacked the credit cards. What do we do today with credit cards? Give people some advice on that. Well, I think the big thing for us is we don't want to, we don't carry a balance because we don't want to pay interest. So when we use our credit card, which we use frequently, my goodness, we use our credit card a lot, but we pay it off at the end of the month. Essentially it's not a credit card because we don't ever pay interest or penalties on it. I mean, it functions like a short-term loan, but we're never in debt because we have the money to pay for it and we never go over our limit. We never get near our limit. In fact, they keep raising our limit because we've been so faithful over the years. We have this huge limit that we're never even close to using, pay it off every month and we only use one credit card. There have been times I've thought we've needed more, but you're pretty adamant that we just need one. Well, we get all those bonus miles. Right.

And we're sure using those right now, aren't we? Yeah, we're not using the bonus miles right now. So tell us, so Anne, how do we do our cars differently than the way we used to? Well, now we do write a check for them. We learn to save up and you're a great buyer of used cars and you have just several principles you go by when you're looking for a new one. It may take you a year, but you find us good ones. Well, we usually look for a car for a year. Once we've decided we're in the market for a car, you and I both research. We look very diligently to find what we want, do all of the analysis of what would work best for us, find it used. Why don't we buy used? Well, because we don't have depreciation, and it's so much cheaper. It's easier to write a check for it. Yeah. And so we both now drive used cars. We have no car payments. And I think that saves in our budget about 14% of what most Americans pay today for transportation. When you borrow money to buy a car, they're paying up to 14% of their budget month after month. We don't have that expense, which means it allows us to give more and to save more. And then let's talk about houses. This is where so many make a mistake. Our principles today are at least 20% down payment, no PMI, and no borrowing against your equity as a home equity loan, where you're constantly using the money that you have stored in your house value. And we only pay cash for any remodel or improvements. Any improvements. Yeah. And so by doing that, we stay out of trouble of ever getting upside down on a mortgage or ever in a bind of not being able to pay our mortgage.

And so we've gone much more conservatively than we've ever been when it comes to houses. You know, the cost of your house should be less than 40% of your total budget. And we've tried to stay well below that. And I know you've done the research on super savers. Super savers spend, what, 10% on their housing cost? Yeah. A lot of them are very content living in tiny homes so that they can invest and save and put their money to work. And one thing that most people don't realize today is that 50% of the people who live in a home today, it's paid for. And that seemed way inconceivable to us years ago, just like paying cash for a car. But it's doable if you steadily work the system, where you pay extra down on your principal as you're able and, you know, get low-interest loan. We believe in a long-term mortgage, no adjustable-rate mortgage. And we're always trying to advise young people, save the money before you get into a house because there's always going to be an expense. Right. Did I leave anything out, Ann, of major financial mistakes that we've made? Those are the biggies. You want to go over them again? Yeah, go ahead. So we started with no savings. So should we make it a positive? Yeah. Save. Yeah, save first. Save first. Give to the Lord. Be sure that giving is your financial priority so that you're not materialistic.

Get on a budget. Would you put that next? Yeah, because if you don't have a budget, how are you ever going to create financial margin? And I think we need to go into how to get on a budget and stay on a budget in a future podcast. Okay. But it's definitely an essential part of keeping on plan. And then paying your credit cards off at the end of the month. And we'll probably get into that, how to get out of credit card debt. Well, we don't believe in any kind of consumer debt. We don't have any store accounts. We don't open those store accounts every time they offer them when you check out these stores. We always tell them no. Right. And we only carry one. We pay off our balance. And we have no consumer debt whatsoever and never want any again. No, and part of that is because we learned to wait and to exercise self-control. Well, we learned how painful it is. You really can't make financial progress if you're constantly paying high interest on consumer debt. It's the worst form of debt. And then we change the way we do cars. Tell them what we're driving right now. Oh, let's see. I drive a Highlander. I don't know what year it is. 15 maybe? 2015. And how long have you had it? A year. One year.

So it's new to you. Oh, gosh. Before I got it, I was embarrassed. I went to a party and had to park where the employees parked because I didn't want anybody to see my car. That's pitiful. Well, it was it was a little dirty that day had a broken windshield It was in bad shape was a 2006 so you drove it 14 years and it ran well it ran great But it was it was not looking very pretty Yeah, so you upgraded and got a 2015. I'm still driving a 2007 both paid for Both maintenance free just everybody everybody in the family drives Toyotas because they've served as well. Yeah, and then Last is to be careful when you buy a house Mm-hmm, because it's the biggest financial mistake that you can make is to have too much house and become house poor And you're big on where you buy a house Well, I'm big on buying a house that you Have stored value in and I will I want to buy a house that other people might want to buy in the future so that you never get stuck if You have to move or you lose your job So that's the mistakes we made and how we've recovered if you divide it sort of in half our first 21 years were pretty much Difficult and challenging going backwards And the second 21 so far have been the opposite of that Make any plotting making very good progress the biblical principle of steady plotting brings prosperity hasty speculation brings poverty and one of the reasons that we're so committed to helping people and is that pain was immense and It didn't look like we would get out of it at some point That we would even recover from it not only financially, but just emotionally the trauma of it and so we really are

Passionate about helping people do it differently from a young age Right because they never have to dig the hole that we dug. No, they can start young. They'll be way down the road Learn I wish we could go back and do it differently, but we learned we're learn these lessons for a reason Yeah, if it were if we did it differently, it would be a totally Dramatically improved financial picture from doing it right starting out and I hope the people that are hearing this will Be encouraged and you can make as many mistakes as we did and still recover, right? Thanks, Sam. Thank you. Thank thank God for all he's taught us. Amen. Look forward to the next one You