Taking Vacations With the Baby Steps

Jake and Danielle on vacation in Maui.

If you're like most people, you can only work, eat, sleep, and play through your weekly grind before the itch to "get away" starts making your insides raw.

But how do you take a vacation and have a good time when you're working your way through Dave Ramsey's Baby Steps to financial peace? I mean, the Baby Steps aren't exactly the best place to be when you want to blow $5,000 on a tropical getaway. Well, here's the good news: you're a fool if you sound like this *in a nasally tone* "We can't go on vacation. We need to save our money. Dave Ramsey says so."

Chill, bro. Or sis. Whoever you are. Vacations are not NOT possible. They CAN happen no matter what baby step you're in. But here's the tough news: you're going to have work at it.

Obviously, the decision to take a vacation is dependent on where you're at financially. If you’re on Baby Step 1 or 2, you’re either building a $1,000 emergency fund or paying off your debt with the debt snowball. In other words, your budget is probably tight—especially if you’re paying off debt aggressively, which you should be. In this case, your options might be limited, but that doesn’t mean you can’t have a fun, relaxing vacation. For now it might have to be a staycation, or an inexpensive camping trip, but it's not impossible. Get creative!

If you can manage—and budget for—a short weekend getaway, then go for it. Just remember, the beach and the mountains and all the fancy resorts can wait until you’re out of debt. They’ll still be there, and they will be an awesome reward for busting it and getting out of debt. The main thing is that you don't incur MORE debt by going on vacation.

If you're into Baby Step 3, you’re out of debt and starting to save your big emergency fund, which is three to six months of expenses. Now you can take a little bit of a breath. You’re still saving aggressively and putting all that money you were using to pay off debt toward the emergency fund. But you are also in a good situation where you can take a little bit of that and go on a vacation paid for with CASH. No credit cards here. Woot-woot!

It's important to not go too crazy though. Give yourself a budget, and keep yourself within that budget.

By the time you're into Baby steps 4 through 6, you're in an awesome spot! You’re out of debt, and you’ve saved up a large emergency fund. You’ve started the process of investing 15% of your household income retirement and you've begun saving for your kids' college funds. An annual summer vacation shouldn't be a problem. Just put it in the budget and set a little money aside every week. Even if it's just $100, that's $5,200! Pack up the van and take the kids to Disney!

Your income will determine what’s reasonable for you to do when it comes to vacation spending. Higher earners will obviously be able to afford pricier vacations, but the point here is to go somewhere and remain debt free. Say it with me now: No. More. Debt.

When you've made it all the way through the Baby Steps, don't forget to be generous. Take some family or friends with you on some of your vacations. Be an encourager and a motivator to people who haven’t reached this point in their journey yet. Be generous with your money and even more generous in your spirit. Everyone’s journey will be different. Some people are able to go through the Baby Steps quickly, while it takes much longer for others.

Keep that dream vacation in mind and use it to motivate you to work through the Baby Steps. Remember, getting out of debt and learning to live debt free won't take you forever. This is just a phase of life. The good times will come. You just need the dedication and a little patience to get there.

Keep pinchin :-)

Breaking Free Part 2: How To See Some Hope

It's been two years since Danielle and I started down this road toward debt-free living. It's been a challenge, a fun ride, a ministry, and a blessing, all rolled into one adventure. This week we'd like to look back on our journey, share some of the intricacies of how and why we do it, and hopefully encourage you to gain some ground in your financial battle.

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Danielle made a comment recently that I'm pretty sure would've proven true had our lives taken different paths two years ago. She said, "If it weren't for our financial plan we probably wouldn't be together."

And I think she's right. Just a few months after getting married we found ourselves locked in a purgatory of money disagreements (we don't like the word "fights") and bad financial habits. She's a saver. I'm a spender. And neither of us had really considered the impact our individual approaches to money would have on our relationship.

In the fall of 2012, just four months after we got married, we took Financial Peace University by financial guru Dave Ramsey. I know there's a lot of Dave Ramsey detractors out there, but a lot of it is simple misunderstanding. I've noticed two groups of Dave-haters. First, there's people of the world who think debt is normal, who think our country's national debt is no big deal, and therefore don't understand why Dave Ramsey is on a crusade against it. Many of them—the biggest haters—also know he's a Christian, and that, in and of itself, paints a big shiny target on his bald dome.

Then there's other Dave Ramsey hate that comes from people—mainly Christians—who simply misunderstand his message. Sure, he can be a little too dogmatic about some things, but if you listen to his story you'll understand why. Dave doesn't claim to have all the answers, but he's built a massive empire around his business that's loaded with people who work their butts off every day to find the answers.

Dave's money management program stems from his own personal experience of having wealth, going bankrupt, finding a renewed faith in God, and having wealth again—lots of wealth! He's currently worth millions. His home in Tennessee—which he paid for with cash—is worth $4.9 million. Some Christians have a problem with this. They think Dave is unbiblical for living in such a way. But I fail to recall any Scripture that says having money is evil, or that when God blesses you in one particular area because of your obedient faithfulness that you need to turn the blessing away.

Their feelings on the matter leave me vexed. Terribly vexed.

Anyway, Dave's plan for achieving financial peace has one major design flaw: it doesn't work if you don't do it!

Ok, ok. That was a little too emphatic. Sorry.

Danielle and I aren't the Dave Ramsey worshippers that many others are, but we do appreciate his method because it has worked amazingly well for us. We also understand that everyone is different and that different plans work for different people. We encourage people who are in serious financial straightjackets to consider Crown Financial Ministries or another biblical-based money management program.

The Time When We Saw Hope

Danielle and I faithfully worked through the small-group version of Financial Peace University in the fall of 2012. I didn't want to do it. I didn't think it would work. But both Danielle and I needed to change the way we felt about money, and, more importantly, we needed to find mutual ground upon which we could start building a budget to get us out of debt.

Dave Ramsey's Baby Step #1 wasn't that hard for us—get $1,000 emergency savings in the bank. During our time leading FPU we met some people who struggled with this, so, trust me, we know how hard it can be, but we were just married and we didn't have any children, so finding $1,000 to put in an account was no biggie.

But then came Baby Step #2—pay off all non-mortgage debt using the debt snowball. This took some time, but we doggedly tracked down every spare dollar we could and eventually paid off the credit card. Then we took the money from the credit card payment and added it to a vehicle payment and we paid off that vehicle a year early.

And then our eyes opened.

Then we took the combined payments of the credit card and the vehicle and added it to another vehicle, and that one was paid off six months early.

And our eyes opened a little wider.

The plan was working, and, most importantly, it was changing the way we felt about money. Seeing progress was making the change happen within us. We began to see the value of cutting back on how much we spent on eating out. So we cut back some more. As our debt went down and our savings went up we saw the value of canceling nonessential monthly bills, like our Netflix account. We even decided not to budget for vacations for a while.

As time went on our vision for our financial future came together. Gone was the fear and desperation that my wife had felt before. Gone was my frustration at her for being so tight-fisted with money. We had learned each other's "money language," and there was newfound respect and empathy.

Our friend, Jacey, over at The Balanced Wife, puts it well: "Taking the first step takes so much more energy than staying in motion."

The great thing about Financial Peace University is that it allows you to see hope in a short amount of time. Usually within 1-to-3 months you'll see that $1,000 emergency fund in the bank. After 3-to-6 months you'll see that debt snowball working wonders. You'll start to feel more in control of your money, instead of feeling like you're money is controlling you.

You might even start to see that maybe Dave Ramsey is really onto something after all.

Other posts in this series:
Part 1: My Personal Wake-Up Call
Part 3: Overcoming The Comparison Trap
Part 4: The Things We Didn't Give Up

Jake's Take: Hoosiers - Just Start Shooting

Deriving financial insights from today's blockbusters and yesteryear's classics.

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My wife will be the first to tell you that her husband is very weird. There’s two things about me that are fairly odd that, frankly, not even I understand.

1. I hate professional sports, which is strange because I grew up in a family of people who were always rooting for someone—Red Sox, Patriots, Celtics. Even my sister likes sports more than me.


2. But I love sports movies. I find them to be some of the most feel-good and inspiring movies around—A League of Their Own, The Rookie, Major League.

So, yeah. Hate sports. Love sports movies. Weird. I know.

It’s kind of a paradox then that I would derive any kind of insight about anything from a movie like Hoosiers, but, let’s face it, Hoosiers is one of the best sports movies ever made, and it contains a great life lesson. It's an oldie, but it's worth seeing if you've never seen it.

In the film, Coach Norman Dale, played by Gene Hackman, coaches a small Indiana high school basketball team all the way to the state championships against all odds. At the finals he walks his team into the gymnasium where they’re going to play the final game. The new gym is huge. A basketball palace, far bigger and more impressive than any gym the tiny high school team has ever seen. It’s not what they’re used to. It’s intimidating.

Coach Dale pulls out a tape measure and has the boys measure the height of the basket and the distance to the foul line, and points out that it is precisely the same as back home. Don’t worry about the size of the gym, he says, just play your game.

Dani and I led a Financial Peace University class at our church this winter, and it has opened our eyes to the wide range of financial backgrounds that people come from. Some people have debt that they can easily pay off within six months or a year; others are facing decades of work. But it pays to remember that no matter how big and scary your situation is, the financial steps to get out of debt are the same no matter what:

• build your emergency fund
• use the debt snowball
• gazelle intensity!

And these steps never fail to help when you use them. When you employ the right practices, it won’t matter if the stadium is a basketball palace or a small Indiana high school. You’ve got the tools. Now start shooting!

Keep pinchin’ :-)

Confronting the Biggest Obstacle Toward Financial Peace: Yourself

We have successfully completed leading the first session of Financial Peace University, a nine-session money management program by financial guru Dave Ramsey. I'm pleased to report that both Dani and I came out alive.

It was so exciting to walk through the doors and see all the FPU kits set up—about 30 of them—each one containing a bundle of potential, so much hope. It felt great to be leading a class designed to help people break free from their financial burdens.

It was tough, though, knowing that there would be some people who would squander that potential. Dani and I know from experience that this is hard work. For most people, going through FPU means making significant changes to how you live and how you view money.

It's so easy to get wrapped up in our own personal financial problems that we forget that everything we have is actually God's. When that happens we lose sight of what's important. How differently would we live if we could remember that God owns it all, that we are simply stewards? How differently would we handle money? I think that managing your finances properly can be a big part of your Christian walk. Maybe you'll never be rich, but you can follow biblical principles of handling money that will create an awesome testimony for Christ.

In his book the Complete Guide to Money, Dave Ramsey talks about the "pain of change." Even when it comes to that first baby step—getting $1,000 in the bank—for some people it feels like such an impossibility that they quit before they even begin. They're too afraid to look in the mirror and ask themselves: "Am I done living the way I've been living?" "Am I willing to sacrifice to win?"

And then Dave drops this bomb: "When I tell people the first thing they need to do is put $1,000 in the bank and not touch it, it can be a deal-breaker. It requires you to look in the mirror and say, 'You're the problem.'"

And that's hard to do. I know, because I did it once. Both Dani and I had to do it. We both had to realize that there were ways in which we handled money that simply were not working. It's only when we got honest with ourselves that real change begins to happen.

Keep pinchin' :-)