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Personal Debt Wrangler – Had my money head in the sand – but no more!


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7 Financial Lessons Learned from My Parents’ Debt

I am very happy to have a guest post from one of my blogging friends, Erin from Journey to Saving.  I’ve mentioned before about how I worried about the impact that our financial bad habits have had on our kids.  Erin shares her story about this below.

financial-lessons-learnedI am no stranger to debt. While I have only personally experienced student loan debt, consumer debt came knocking on my family’s door decades ago, and nearly destroyed us.

Debs is very open in sharing her mistakes and experiences when it comes to debt and her own family, so that others can learn from her. It’s for that reason I only thought it fitting to share my own story here, with all of you, along with some of the lessons I’ve learned from my parents’ debt.

Debt is a common enemy of ours, and even though it brings dark and trying days, I’ve been able to get a few things out of it after starting on my own financial journey. After reading this post, I hope you’ll be able to as well.

The Beginning

It all started when I was 7. My dad had been laid off. I suddenly began hearing the word “No” much more often, accompanied by frustration at the predicament we found ourselves in.

My 7-year-old brain didn’t comprehend this as I can now, but I knew enough to be scared. What will this mean for us? I often wondered, especially after hearing my parents speak in hushed tones.

Bits and pieces made their way to my ears: losing home, can’t afford, might not recover, and can’t keep this up, were just a few phrases that clued me in to what was happening.

The real warning sign was that my lovely grandma was showing up at our house more often, always with food and household products in tow. It was as if we didn’t have to go grocery shopping anymore!

My childhood self was more than a little naive, thinking my grandma was stopping by just to spoil me with goodies. While that was part of the visit, something deeper was going on, as I saw her attempt to hand my mom cash several times. My mom usually refused.

Thankfully, my family recovered in about two years. My dad worked part-time until he found a full-time position, which put us in a better place. On top of that, my mom began to work full-time once I turned 13.

We went on our merry way, and I was none the wiser to the increasing pile of bills that would slowly bury us in several years.

Fool me once, shame on you. Fool me twice, shame on me.

financial-lessons-learnedIt was only at Christmastime that I was told money might be a little tight, but my parents always managed to get me what I wanted most. I never truly knew just how bad of a state we were in, until my dad lost his job again, this time, while I was in college. This time, I knew what was going on, and I wanted to run.

My parents had never gotten their financial act together. They had never saved, and they still hadn’t paid off their debt. I was angry at them. Why hadn’t they learned from their mistakes the first time around? Was I the only one that remembered those times? I didn’t know how they let history repeat itself.

What’s worse, my mom became resentful toward my dad. Without his income, we were relying solely on her income, which was only half of what my dad made. I should say that my parents were never extremely high-earners, so while we kept a mostly frugal lifestyle, losing my dad’s income was a huge blow that we never recovered from for many reasons.

My parents have always been prideful and unwilling to take “handouts.” As such, my mom shouldered the burden of making ends meet by herself, even when I offered to help. Likewise, Debs is the primary breadwinner in her family, and I know it’s not easy at all. There are plenty of mom’s out there who are shouldering this burden, and doing an amazing job of it. While it can be a thankless job, your children will grow up to appreciate and respect you for it.

To say this was a difficult time would be an understatement. I can’t even begin to tell you all how happy I was when we finally got through it. There were times I doubted we would. I took mental notes through everything, because I knew I never wanted to go through that again.

I wanted to make sure I could safeguard myself against debt. Student loan debt had been different in my mind, so I sadly didn’t avoid that, but you can bet I won’t take on any consumer debt after what I’ve seen it do. For that reason, I’d like to impart to you the financial lessons I learned from watching my parents suffer with their debt.

7 Financial Lessons Learned from My Parents’ Debt

  1. Save, budget, and track spending. Keep an emergency fund. Please. It kills me to know my parents would have been fine had they actually taken the time to save money. Because they didn’t have anything to fall back on, any unexpected expenses would go straight on the credit cards. It was a vicious cycle they were unable to break out of. My parents also thought they had a good hold on things, but I guarantee that a budget or spending sheet would have opened their eyes.
  2. Communicate. According to my parents, there was a bit of miscommunication going on. My dad believed that they were paying the cards off in full every month, when in reality, they were paying the minimums. This was because my mom balanced the checkbook and paid all the bills. I know Debs has mentioned a few times that she didn’t realize how bad things were because her husband was doing the same. Even though I handle all of our finances, I always keep my boyfriend in the loop. Your other half needs to be included.
  3. Perseverance pays off. I want to inject a little happiness into this post! I’m glad to say that my parents fought the battle and won, in their own way. They are still in debt, but they were able to retire and move to a place that is much more affordable. They purchased their house outright and no longer worry about a mortgage. With the sale of their old house, they were able to put a large chunk toward their consumer debt, and they now have a good buffer in their bank account should they need it.
  4. There’s more to life than possessions. Having a little less than my peers made me realize early on that there’s simply more to life than having the newest gadgets, prettiest clothes, trendiest accessories, etc. My parents never purchased name-brand anything, and they always shopped frugally. They’re both deal-finders. I got a hand-me-down car (from my grandma to my mom, then to me) and only replaced it once it was unreliable to drive. Even though it was a funky teal color, I didn’t have to pay for it, and that made it valuable.
  5. Experiences matter. I’m an only child, and many of my memories growing up involve my parents. None of these memories revolve around things, though. Yes, I can remember the gifts they’ve given me over the years, but what matters most to me now is spending time with them. No one lives forever. So the next time you feel pressured into buying something for your children, remember that prioritizing experiences is the way to go. They will thank you for it some day. Remember to enjoy the little things life has to offer.
  6. Keeping up with the Joneses? Nah. I never got the sense that my parents were trying to keep up with anyone, even though there were plenty of people around us that were clearly questioning our priorities. They were never phased by it. Sure, it’s a little sad to see people from college “living the life,” (or so they want us to believe?), but I’m happy where I am. I have a great boyfriend, two adorable cats, and supportive friends and family.
  7. Don’t give up hope. This has to be the most important lesson I’ve learned. My parents went through a lot in a short span of time, twice. Yet, they’re still together. They pulled through. And I turned out fine. Looking at my student loan balance can make me feel hopeless at times, but I know I’ll reach a $0 balance someday. Being in debt has taught me things I never would have discovered about myself, and for that, I am thankful.

 

financial-lessons-learnedI want to close this out by saying that things could have been much, much worse. Compared to some people, my family had it easy. I am very grateful that my grandma was there to help us through everything, because I’m not sure we would have survived without her generosity.

Don’t let debt take away from you any more than it already has. I know it can be soul-sucking, and that the journey is a long one, but you’ll make it through if you choose to fight. And I know you want to, otherwise you wouldn’t be here!

What are some of the lessons that debt has taught you? Did you grow up around debt? How has it affected you?

erinmauthorpicErin M. is a full-time personal finance freelance blogger and virtual assistant. She’s passionate about helping other millennials get started on their financial journey. She blogs about frugality, being happy with less, and tackling student loan debt on Journey to Saving.

 

PART OF

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Misplaced Faith

I’m thrilled to have Kirsten from Indebted and in Debt for a guest post today.  Kirsten writes on something I’ve been struggling with.  Faith that God will provide enough for me so that I can let go of my possessions and spend my time on pursuing the minimalist lifestyle I so badly desire.

Pardon the Mess

I don’t do well with messes. Clutter in my house makes my brain feel cluttered. I can’t think with messes around; I feel antsy, ill-at-ease, on edge. We did ok with controlling clutter until we had kiddo #1, but as the parents among the readers surely know, kids breed clutter. And they spread that clutter everywhere, no matter how much you attempt to stem the tide.

While I was on maternity leave with my second baby (just a few months ago), a friend shared an article on Facebook from a successful blogger who had written about taking away her children’s toys. She noticed an improvement in their behavior – they seemed more focused. And of course things were neater. Boy, that sounded nice.

Decluttering Machine

As I looked around my clutter-stricken house, where I was tripping over small toys (newborn in hand!) and cursing my eldest’s “junk”, I had an aha! moment (hi, Oprah!). I could also get rid of the bulk of her toys or, at the very least, put her toys in rotation.

faith-misplaced

One day worth of mess on maternity leave

I write a private blog for our families, since they live so far away, and I even went so far as to post there “stop sending toys” – said the kids wouldn’t get them. I even started collecting a few toys a day that were “junk” and tossing them. I started off strong.

Then I just sort of stopped…

Lack of Faith

The thing is, both my husband and I lived through some lean times as children. We remember doing without. We went off to college (borrowing our souls to do it) and planned for a better future for our children with our high-falutin’ degrees.

Now that we’ve burned through any sort of disposable money that we had, I think we are scared that we’ve reached the end, that there will be no more “stuff” and that our children will be left to do without like we did when we were children.

No, I didn’t have brand name clothes and I was often in ill-fitting hand-me-downs, but I always had clothes. I always had a roof over my head and never once were our utilities shut off. We ate fine. Mr. Indebted went through tighter spots, but even then, he was always OK.

In comparison, our kids have a roof, air conditioning and heat, plenty of food to eat, and through the generosity of family, nice clothes to wear. They do not lack for anything. Why am I so worried that they will?

I’ve come to realize that the problem isn’t the stuff we jam into the closets. The problem is in my soul.

God has provided for our needs in astounding fashion. But I lack the faith that God will continue to provide. I cling to those jeans because I’m scared they are the last pair of jeans I’ll ever own, never mind they don’t fit. I cling to my worn out running shoes just in case. I cling to my ratty sheets because I may never have another set.

An Exercise in Faith

God didn’t tell me He’d give me everything I ever wanted. But He has promised to take care of me and I realized I need to let Him. I realized I need to turn loose of “stuff” to make more room for Him in my heart and for Him to work wonders in my life.

I’ve started off slow. The first day, I chose one thing to say goodbye to (symbolically, a maternity / nursing dress). The next day, two. I’ve been going for a week now, and I gave up seven things today for a total of 28 things (which just happens to be my lucky number). And you know what? I feel lighter, less worried about tomorrow, and less cluttered in my closets, my brain, and in my soul.

faith-that-God-will-provide

There’s room to breathe. There’s room to let God work.

Do you feel cluttered where you live? Have you ever tried to declutter? If so, did you take baby steps, or just fly through the house?

Indebted-Moms-faithKirsten blogs semi-anonymously at Indebtedmom.com, discussing her faith and family’s large student loan burden, which has cost her an opportunity at being a stay-at-home mom.  Kirsten is an actual rocket scientist who actually doesn’t know a lot of things people think rocket scientists should know. She loves lists, coffee, and NASCAR, but not necessarily in that order.

Endnotes:

I had the highest traffic Monday when my guest post was published at Financial Samurai.  448 views baby!  OK, when I hear people talk about 20,000 views, this is nothing but it’s big for me and it’s my first so I’ll take it all day long!

I haven’t been doing blogger Carnivals lately but I had submitted to one (twice evidently – you’ll see the same post listed two times!) before I moved my blog to self-hosted and I guess it only runs once a month, even thought it’s listed as weekly in the Blogger Carnival site.  Consequently, I never got a pingback on this site, but happened to come across the Carnival and saw my post so I’m linking back here, which I understand is good carnival etiquette.

How to Blog Carnival – The Benefits of Cloud Software Edition

Do you enter blogger carnivals?  Why or why not?

This post has been linked up to
and of Friday Jet Fuel #7

 


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My New Enlightenment Since Acknowledging our Debt Crisis

ImageChef.com-debt-crisisMy Come to Jesus Moment was in March 2012 (aka D-Day).  I hesitate to use that phrase, because I am quite spiritual and don’t like to use the Lord’s name in vain.  However, Brett Nelson, a contributor at Forbes wrote:

CTJMs, we understand, are all about focus, clarity, intention and gravity—in other words, the very stuff that, if consistently mustered, would wipe CTJMs from the schedule.

He suggests ways to avoid CTJM’s including establishing milestones, embracing conflict, defining priorities and avoiding surprises.  Well that is really is what good personal finance management is all about, minus the embracing conflict thingy.

But wait!  When I think about how we got here, part of it was because we did not embrace conflict.  We avoided it like the plague.  We placated ourselves with shopping trips, one up-ing each other with purchases (well he bought that, so now I’m going to buy this) and saying “I deserve” when we were tired or stressed or just plain frustrated with life.

Laurie from The Frugal Farmer wrote on Debt Roundup What Do You Really Deserve?  I identified so much with that post.   All I wanted was peace, freedom and security but I was looking in all the wrong places.

I defended my spending habits as stress relief from a busy lifestyle that I had created by not prioritizing. I absconded from my role as joint financial steward justifying it in my mind that I was the higher income earner and worked long hours, so that was the ‘least he could do’.  I looked for peace a few too many times at the bottom of a bottle, weary after a long day or fretting about other family stresses.

So now what have I done to (help to) turn things around?

  • I don’t do things that are in conflict with our goals ~ this includes unplanned spending, shirking responsibilities in managing our finances.  I’ve even started grocery shopping (for deals) and cooking a little more which is crazy (for me).
  • I speak up, instead of burying my head in the sand, if I think things are going astray.  Better to have these small difficult conversations straight away, that are actually quite insignificant compared to the ones we had around D-Day.
  • I practice living in the moment – from “The Power of Now” by Eckhardt Tolle.  This helps keep me from getting down about our debt situation and worries about family members.
  • I try to set an example and communicate within our household about ideas we could do to save money and not waste.  It appears I am the most frugal person in the house now, turning off lights, conserving gas etc. It used to be The Irishman.  Go figure.
  • I’m discussing my new frugal philosophy and sharing tips and tricks, budget and amortization spreadsheets and cool posts with my adult children.  I could bear great guilt about how I have not set a good example for them but I know guilt is a wasted emotion.  Instead I am trying to help them as much as I can with the new smarter ‘me’ and an excel file for any situation up my sleeve!
  • I’m a cheap date LOL.  Visiting my grandson on a weeknight, is now Nama’s favourite night out.  Otherwise it’s history channel or just being side-by-side, both on our computers.  A beer on Friday night, unless we splurge on a champagne Friday which means bubbly in the bathtub.

So I think Jesus is helping me, and smiling, when I say my new frugal enlightenment instances are affectionately called “Come to Nama” moments.
Photobucket.com:  tailz2006

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