About 7 years ago, we were the typical American family–in debt and living paycheck to paycheck. It had never really bothered me much. We had never missed any payments, we were healthy and I bought into the lie that “everyone has debt” and “you are always going to have a car payment and a house payment”. But in late 2006, I began to really look at our finances. What I saw really began to scare me. We had $32,000 in credit card debts and $28,000 in student loan debt. $60,000!!! We were over the age of 40 with $60K in debt, nothing in liquid savings, a little in retirement savings, and no plan. One adverse event could cause us to fall over the cliff and start missing payments and potentially even lose our home.
On December 28, 2006, that “adverse event” happened. My daughter and husband were at a movie. Suddenly, in the middle of the movie, my daughter started having seizures. I was at work and received the frantic call from my husband. 911 was called, my daughter was taken to the hospital. I left work and spent two hours in traffic trying to get to the hospital. I had spent the two hours that it had taken to get to the hospital praying, asking for others to pray and thinking about what could be wrong. As a nurse, I knew what some of those possibilities could be and it was very frightening. I walked in to the emergency room to see not only my family, but members of my church family all gathered around supporting my husband and daughter. I had made it just in time to be able to accompany my daughter to the CT scan. I knew that this test would show if my worst fears were confirmed. After the scan, we waited in the ER room with our family and church family. More church members arrived and my daughter and family were surrounded by prayers and love. Finally after about 30 minutes, the ER doctor came and told us that the CT scan was normal–there was no sign of a brain tumor. We all praised God and breathed a sigh of relief. The cause of the seizures were unknown and we were told that it could have been a single event and my daughter might never have the problem again. Four days later, however, she did have another event. The next several months were spent seeing specialists and having multiple scans and tests. In the end, no cause was ever found and my daughter was put on anti-seizure medication. Thankfully, she has never had another seizure since and, in fact, 2 1/2 years later she was taken off the medication and is still fine today.
Why did I tell you about this health scare? This was the “adverse event” for us financially. We had a high deductible insurance plan. $2000 per year. The first seizure, ambulance ride, hospitalization and CT scan happening on December 28th, 2006 and then the subsequent seizures and all other testing happened starting January 4, 2007. So, we had $4000 in medical bills that started coming due around March or April 2007. I had no idea how we were going to pay that debt, let alone the $60K we already had.
I tried to figure out a budget for us to live on and start paying down the debt, but no matter what I did, I couldn’t see a way out. I was extremely stressed and worried about money. The money situation caused stress on my marriage and my children were also affected. One day, while at work, a group of us were talking about prayer. I mentioned that I prayed, but I wasn’t good at discerning God’s answers to my prayers. I said “I just need God to put a billboard in front of my that says ‘Lisa, do this.’” Everyone chuckled and agreed, but I didn’t think much about it after that conversation.
Not long after that conversation, I was sitting in traffic during my long afternoon commute. I sat in my car lost in my thoughts and worries over our financial situation. While I sat in traffic that wasn’t moving, I looked up out of my front windshield. One of the billboard that was looming above had a picture of a man I didn’t recognize. The words on the billboard jumped out at me—”Live debt free! Listen to the Dave Ramsey show 4-6 p.m.” I had never heard of Dave Ramsey, but those words were exactly what I wanted–to live debt free. It happened to be about 5 p.m. so I immediately turned my radio to that station. I couldn’t believe what I was hearing. People were calling in to tell their stories of how they were in debt and struggling. Dave was quoting scriptures, talking about God’s way of handling money, answering questions, offering advice and was talking about these “baby steps”. There were other callers that were calling in to tell their success stories and how they were debt free. They were screaming “We’re debt free!!!” on the radio. Some of these folks were in situations worse that my family was facing, but they had overcome and were thriving. I became hopeful and excited. I called my husband and told him to turn on the radio. I couldn’t believe what I was hearing. Here was a man quoting scripture and sharing practical ways on how to get out of debt and stay out of debt. I remembered the hallway conversation with my co-workers and thought “God, you put that billboard in front of me!”
I began listening every day. I bought the book “The Total Money Makeover” and my family started following the plan. Several weeks into listening to the show, I realized that maybe I had actually heard of this guy several years ago. My brother, who lived in Tennessee, had been visiting and kept talking about this guy on the radio in his local area. He kept droning on about this guy and how his financial principles made so much sense. I politely listened, but really my eyes glazed over. My brother even gave me a book. I never read it. But as I listened to the radio show one day, and Dave Ramsey was talking about Financial Peace, something suddenly made me think of my brother and the book he had given me so many years ago. Was this the guy my brother had told me about? Where was that book? When I finally got home that day I ran in to my home and started searching for the book my brother had given me. I finally found it under my bed, covered in dust. There is was “Financial Peace” by Dave Ramsey. I had had the book for several years and never even looked at it.
My family and I continued to follow the plan. We learned how to work a “zero based budget” and it was the first time a budget ever really worked for us. We began to see our debt going down–fast. It was so exciting and we had hope for the first time. But, there were other challenges. By May, we were faced with another health scare. This time it was our son. The words “lymphona” were being used. My son had to have many tests and, thankfully, everything was fine and he is healthy, but that was another large deductible triggering event. We were able to cash flow all of those bills and kept working our plan.
In August, we decided to take Dave Ramsey’s class “Financial Peace University” at a local church. After only one class, my husband ended up in emergency surgery for acute appendicitis. Another $2000 deductible. I didn’t miss a class and my husband only missed one class. We kept following the plan and we cash flowed that medical bill as well. It was obvious that we were being attacked and I knew that we were on the right track. I remember standing in my bedroom talking out loud and rebuking the Evil One. We would not be derailed. We would continue to follow God’s for our money and our lives.
We continued to follow the Baby Steps and by the summer of 2010, we had paid off all of our debts and had a 6 month emergency fund! We have continued to follow the same principles and live below our means. In fact, we made it a priority to live primarily on my husband’s income. We watched as our savings continued to grow and we put into retirement savings. We have never gone back to financing purchases and have paid cash for two used cars. We will never have a car payment again.
Living below our means has allowed us to save enough money to have more than a year’s worth of living expenses in the bank. The funny thing is that living below our means has actually made us more content. Additionally, we know how to live on one income. This has given us flexibility and now will allow me to take a sabbatical from working and take care of my mother for whatever time she has left in this life. It will allow me to take time to get healthy and really think about what I want to do next in my professional life. I don’t know what that will be. It might be going back to being a Nurse Manager, but I may not choose to work in that kind of stressful environment again. Perhaps I will go back to strictly taking care of patients as a staff nurse. Maybe I will do something entirely different. I am grateful to have gotten financially fit so that I can take time off for this sabbatical.
What steps are you taking to get more financially fit? What could that mean for your life?