Why You're Still In Debt

I call it a 3 a.m. moment. It's the instant you realize that you need to do something about your debt. Maybe it doesn't happen at 3 a.m. necessarily. Maybe it happens when you look at the next credit card bill, or when you go to write that massive check for an unexpected car repair. It's like waking up in the middle of the night with the horrible realization that you forgot to do that very important thing.

So you decide to make a change. You even get a little angry about it. That "3 a.m." moment made you determined to get out of debt for good!

Buuuuut it didn't take. After a while, your conviction waned and now, sadly, you're still in debt.

What keeps people from getting out of debt? Why would someone want to stay in chains instead of living in freedom? Sadly, there are all sorts of reasons people choose MasterCard over being free from debt, but here are a few:

1. They want to keep up appearances.

This is what realty TV has got us trained to do—keeping up with the Joneses, or, to many, the Kardashians. But most people who appear to have it all really have a steep mortgage on that million dollar home, and a lease on that expensive car, and a Visa card that's maxed out. These are some of the most broke people in your neighborhood! Trying to keep up appearances with anyone is nothing but your ego taking a stroll on the uneasy side and it will lead to bankruptcy if you're not careful.

2. They are unwilling to sacrifice.

When Danielle and I got married, I couldn't fathom not going out to eat at least once a week. But it was a sacrifice I eventually made. Now we go out to eat once every few months. If that. And you know what? It's not as dreadful as I imagined it would be. We have since come to sacrifice many other things in order to get ahead—cable TV, high-speed internet, Netflix, vacations. This doesn't mean we have to do without these things forever, but the savings we've accumulated over the last two years is precisely why we are currently debt free! It’s about priorities. Here’s the question: What are you willing to sacrifice?

3. They’re addicted to stuff.

During my time as a UPS driver I had two stops on my route to women who were full-blown shopaholics. It was a rare day that I didn't stop at their houses with multiple packages from amazon.com. A love of stuff isn't that hard to understand, really. I mean, who doesn't like stuff? Heck, I LOVE stuff! And learning not to impulsively purchase everything we want isn't easy, because, for some reason, the more we have, the more confident and powerful we feel. But it's all a fraud! Eventually, stuff just weighs us down.

4. They don’t know how. 

A lot of people get those "3 a.m." moments and want to kick their debt to the curb, but they just don't know how to do it. Our culture, with its mentality of immediate gratification, has trained people to look at their mountain of debt and see it as something too big to bother with. Quick and easy, that's what people want. Hard work? Forget about it! But hard work and discipline is exactly what it takes to get your debt under control. That, and a plan. Thankfully there are plenty of solid, reliable budgeting programs to help you out—be it Crown Financial or Dave Ramsey, for example. You may have to plunk down some cash to get the program or take the course, but it's well worth the investment.

5. They’re lazy.

Some people know what to do. Maybe they know about the debt snowball and they sorta, kinda want to get out of debt. They know how debt can negatively affect their marriage, their stress levels, their relationships, and their future; they know that buying expensive coffees and cable TV packages and newer, more expensive cars and clothes isn't a wise move, but they just aren’t motivated to make a change. And that's... well, embarrassing. Especially if you've got kids. It's now not only your life you're ruining but theirs because they're going to learn their financial habits from you.

Every day, people are making the decision to get out of debt and change their lives. They’re ready to sacrifice and get rid of their fear of change or their addiction to stuff. If you're ready to take that leap, we can't recommend Dave Ramsey's Financial Peace University enough. It saved our finances and our marriage.

If a lazy, stuff-lovin' bum like me can make this change, then anyone can!

Keep pinchin' :-)

The Debt Snowball: Why It Works, How It Works

It's been 16 months since Dani and I first went through Financial Peace University, and in that time we've completed the first three baby steps. We're just now getting around to thinking about things like insurance and retirement planning, so I'm sure we'll have more to say on those topics in the months ahead.

For now, we're experts on the "debt snowball." What is a debt snowball? How is it supposed to work? Essentially the debt snowball is a behavior modification plan. It's purpose is to get you to start thinking differently about money. It's also designed to motivate you by getting you to pay off some smaller debts more quickly.

When you were a kid, making snowballs usually started with a small pinch of snow, then you added to it and added to it until you could roll it into a nice little aerial projectile of devastation. Rolling was key to making big snowballs because they got bigger quicker when you rolled them. That's exactly how Dave Ramsey's debt snowball plan works.

Start by listing your debts smallest to largest, and ignore the interest rates. It doesn't matter if it has a 2% interest rate or a 22% interest rate. Forget about it. This is behavior modification and motivation, not math.

Pay minimum payments on all the debts except the smallest one and then attack that one with a vengeance. Once it's gone, take the money you were putting toward that debt and add it to the minimal payment on the next smallest debt. Once that's done, take that combined payment and go to the next one. Knock them out one by one.

The reason you start with the smallest debt first is because if you start with the largest one you won't see it leave for quite some time. You'll see numbers going down on a page, but that's it. Eventually you'll lose steam and motivation and you'll probably end up quitting. But when you attack the small debts first you see progress. When you see the plan working, you'll be more inclined to stick to it.

The only time you might make an exception is if one of the debts is to the IRS. You don't want them hovering over you, so pay off that debt first, then proceed down the list of other debts, smallest to largest, using the debt snowball method.

Dani and I had about 19 months of payments on a car, a motorcycle, and a credit card when we started to employ the debt snowball method. In about six months our debt was GONE! This. Plan. Works!

If you want more details about the debt snowball including an example, Dave Ramsey explains it best here: How The Debt Snowball Method Works.

Keep pinchin' :-)

Some Practical Steps We Took Toward Budgeting: Part 2

One of the things Dani and I have found helpful is to differentiate our Monthly Expenses from our periodic expenses, or what we call "Rollover Expenses." Understanding the difference has helped us budget more wisely for some of those bills that come up as regularly as every four or six months, or even every couple of years.

For example: Our town is weird when it comes to sending out its water bill. In fact, we're still not sure what the schedule is, but we know roughly how much it will be, so we've been preparing for that all year by setting aside a little money every month. By the time the bill comes we would have set aside enough money to cover it.

Here's an itemized breakdown of most of the things we budget for:

MONTHLY EXPENSES Tithing Mortgage Electricity Phone Internet Groceries Gas/Vehicles Health/Personal products ID theft Pocket money

ROLLOVER EXPENSES Home needs/Repairs Heating oil/Firewood Clothing Car repairs/tires Water License/Taxes Auto insurance Gifts Children Car replacement Savings

Dani and I have decided to cut out things like entertainment and restaurants for the time being, but back when we were budgeting for those things we put them under Monthly Expenses. If, at the end of the month, all the money in the entertainment budget hadn't been used we added it to whatever bill we were attacking the hardest that month. This helped us substantially with our "debt snowball."

Here's a great video from daveramsey.com to help beginning budgeters prioritize their spending.


No matter how you chose to go about budgeting: just do it! It's like the old saying goes, "Idle hands are the devil's playground." The same could be said for money—idle money that hasn't been dedicated to a line item on your budget is money just waiting to be spent on some frivolous thing. So give your money a plan. You'll find that the more you tell your money what to do the more of it you'll end up with.

Keep pinchin' :-)