Many of you have heard the story of how Lori and I worked our way out of debt. Here's where we found ourselves in 1991:
We were making about $60,000/yr gross income. Not bad, but we had a problem: we owed over $65,000 in debt, not including our home. Credit cards. Car loan. Student loans. We had a "budget", but no plan. We were both working, but not together. Big problem, little hope.
The good news is that God gave us a wake-up call and we answered it. Here's what we did to turn it around:
1. We got together on our budget. If we didn't earn it, we didn't spend it.
2. Stopped using credit cards ... cold turkey.
3. Began giving regularly to our local church. Tithing came about a year later. We now are able to increase our giving every year.
4. Increased our income, but didn't increase our spending.
5. Paid off our cars, and never had a car payment since.
6. Began using cash for discretionary spending (groceries, eating out, entertainment, clothing, etc). This alone saves us over $8000/yr.
7. Meet once a month to review our finances and make adjustments for the upcoming months. We now spend less than 30 minutes/month on this, including balancing our checkbook.
8. We lay out our upcoming annual budget in December each year. Takes us about 90 minutes, tops.
9. We save aggressively for retirement. We have fun with what's left.
10. We seek to please God first with our money. And we always seem to have far more than we need.
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