Book Commercials & Misanthropic Observations

Let’s talk about money

I learned a new term the other day: SPAVING. The act of spending to save. This could be in turns true and sarcastic. It is sarcastic when you buy something you didn’t need because it was on sale and you “saved money on it”. It was true however, when the act of buying a book gave me the shot in the arm I needed for some consumer spending self control. Given my digital toys habit, this $17.00 expense – hopefully - will help me not spend hundreds or thousands more in 2007.

The book is Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders by James Scurlock. When I first saw it a few weeks ago at Borders I was very interested but found it funny to pay a hardcover price on a book about how we spend too much. I was just gonna wait for the paperback.

But as I watched my thinking habits, I caught myself considering charging expensive things I wanted, telling myself that “we could pay them off easily, life is good, what’s the worry?

I know this thought process- it is my nemesis. It has gotten us into trouble before. A few years ago - I would say maybe four- Paul and I were at a flash point in our marriage. We were shocked to discover that we had somehow skipped our way into somewhere around $11,000.00 of consumer debt. (A fancy term for credit cards) Now, this wasn’t all done by actually charging stuff on our card, although a healthy percentage was. A large chunk came by having our credit card attached to our checkbook as emergency overflow. Then we didn’t balance our checkbook but since we never got any overdraft notices we noticed nothing amiss. What was happening was that any time we would have bounced something, instead it just was added to our credit card balance. As those payments became higher, our regular checkbook balance became lower, making more “overdrafts” and on and on we spun. AND during all this, we never once checked our lifestyles or spending habits, including vacations and large purchases. I don’t know why Paul never looked at my spending, but for me, I didn’t want to be too nosy or controlling of him. We were happy campers.

Then God woke us up - it was not fun. I can only say that our marriage was tested. Nothing else will do it justice anyway.

We both say that we are blessed. We know we can weather a hard time, learned that we are accountable to each other, and we got cold buckets of water over our heads before we were more like something around 50,000.00 in debt- not unheard of in the United States.

We got a home equity loan that covered the 11,000 and some unpaid auto loans (we didn’t even consider the auto loans to be debt- why, I don’t know. Maybe it would have been too much for us to face head on) and started living on an allowance and something that could be called a budget, sort of. Since the home equity loan was for 7 years and the interest was so much lower than credit cards the payment was about ¼ what we were spending before to pay off the same debt. We felt like we had breathing room, finally. This would have been a wise move and lesson well learned if we had really changed our habits. But I, for one, didn’t really.

Now we began to charge items and pay them off within a couple of months, because we seemed to have so much more income not going to that old debt. I told myself I was such a good budgeter, I always paid our credit cards off in a few months. It never occurred to me that it would be wiser to SAVE for something and pay cash for it. And since I was always spending our discretionary income to pay off something we already owned, when real bills came due, like ferrelgas or property taxes, I had no cash. No problem, I just charged them and scrambled over the next few months to pay them off too. We were treading dangerous waters, friends.

This story has no second dramatic event – just a growing realization on my part that this was not what God wanted for us and how precarious our situation was.

So in December 2006 we decided to treat our second mortgage like an actual debt. We actually had to refinance again to fold in the trickle of debt I had built up with my good budgeting habits, and cranked up the payments until it hurt. We also started saving. Our target date is Jan 2010 to have that paid and some emergency savings – my goal is 3 month’s worth of expenses. And we do ok. We each get an allowance, we don’t live miserably, but we don’t charge things that are not in the budget, and we pay off in full every month (after having locked the credit cards in the safe for a few weeks to just break the habit). Now I use it like a check card, but with better rewards points–SO FAR.

But I was just catching myself dreaming the other day…