My biggest struggle is that I LOVE TO SPEND. It's an addiction! I tell myself that I work hard... and let's face it, I am a workaholic, I enjoy working... so I "deserve" to treat myself. But that kind of thinking is what led to a maxed-out credit card, and the ensuing stress of feeling hopeless when I looked at the mountain of debt I had to climb. Thankfully, Nathan is more level-headed when it comes to finances, so he was very encouraging when we created and implemented a budget.
Here are the five tips that Dave gave tonight:
1. Live on a written budget. Kelly and Dave always say, "Every dollar has a name" when you PLAN for the month ahead-of-time. My dad used to say, "If you fail to plan, you plan to fail." Put a budget on paper, and then stick with it. It's making your money work for you!
"For which of you, intending to build a tower, does not sit down first and count the cost, where he has enough to finish it?" Luke 14:20
2. Avoid debt. That's the opposite of our current culture, which preaches that debt is good, debt is healthy, put it on the credit card, blah blah blah. Basically that's just buying stuff that you can't really afford. Dave is all about paying cash for everything. He even told us tonight that he hasn't had a credit card in 25 years, and he pulled out cash from his wallet and said, "Imagine that-- not having a credit card gives you money!"
In his Total Money Makeover book, he writes there's something psychological about spending cash that hurts us more than swiping a piece of plastic. So he encourages using the envelope system, where you put the amount of cash you budget into an envelope. When the cash is gone, it's gone, so you have to stop spending. Simple, yet effective.
"The rich rule over the poor and the borrower is the slave of the lender." Proverbs 22:7
3. Foster high-quality relationships. I've heard before, and I believe, that your income is typically an average of your five closest friends. Dave was like, "You don't need to go out and get a new set of friends," but he did say that people who were high-quality individuals who made positive choices had a greater tendency for wealth building.
"Do not be deceived: Evil company corrupts good habits." 1 Corinthians 15:33
4. Save and invest. Dave mentioned if someone tucked away $100 a month in a Roth IRA starting at age 30 until they were 70, they would retire with more than $1 million.
"In the house of the wise are stores of choice food and oil. But a foolish man devours all he has." Proverbs 21:20
5. Be incredibly generous. He said, "I'm not just talking about your regular tithing, I'm talking about giving with a purpose. It is life-changing!" I have ALWAYS wanted to earn more so that I could give more-- it feels so great to be generous and be able to share your wealth with others! I am blessed that I come from extremely generous parents and a very loving, giving family. It taught me early in life that it is far, far more blessed to give than receive, just like Jesus said.
"Each of you should give what you have decided in your heart to give, not reluctant or under compulsion, for God loves a cheerful giver." 2 Corinthians 9:7
If you're interested in getting debt-free, or changing your finances like we did, I encourage you to consider reading Dave's book, taking a course of Financial Peace University or consulting with a certified financial coach like Kelly. Even if you have to do baby steps, you will eventually eliminate all of your debt, and it will feel so great when you do! Speaking from experience, you will get way more satisfaction from living debt-free. :)
Here's to financial freedom!