Getting on the same page
Couples must be on the same financial page in order to be debt free; this rarely happens automatically. Please do not assume that your great love for each other will translate to seeing eye-toeye in regards to finances. There is clear evidence that the opposite is true.
Consider that each of you have been raised in different families resulting in grossly different influences. Your spouse’s parents may have had varying outlooks as to how credit cards are used, whether or not having a savings is important, or how discretionary money should be spent. Marriage brings this cornucopia of views into one new union. This often leads to conflicting views and arguments.
Have an open and non-judgmental talk with each other. Ask each other about your dissimilar experiences and what they recall about their parents’ views of money. Seek first to understand your spouse. You’ll be amazed at what you will learn.
When Victoria and I sat down and asked each other those questions, I learned that my wife witnessed her parents simply buying what was needed with no talks of saving up for purchases. If they needed a new TV, she watched them go out and buy a new TV. From my recollections, my wife learned that I observed my parents saving and scrimping before making those same purchases. Sometimes even fretting over the thought of spending money. You can see the conflicting points of view we brought into our marriage. Exploring our past influences has helped us understand each other in this vitally important area of money.
Without question, both participants in a relationship need to be in full agreement and fully committed to the goal of getting debt-free to achieve success in this worth-while, God-honoring, endeavor.
Bring this matter to the Lord. Confess sins and ask for the mind of Christ in this stewardship matter. Ask the Lord for a clean heart and a renewed spirit (Psalm 51:10), then mutually commit to honoring Him in this area of your lives.
Account for your dollars
Be thou diligent to know the state of thy flocks, and look well to thy herds. Proverbs 27:23
God has called us to be faithful stewards (1 Cor. 4:2) and that requires knowing where every dollar is going. It is common to have leaks in our financial buckets. The first step is to identify money that is flowing to unnecessary areas or items.
Print out your bank statements
Grab some colored highlighters and the last three months of your bank statements. We want to look at the variable expenditures in the household such as shopping, dining out, and entertainment. These tend to be the areas where overspending is easiest to control. After assigning a color to each category, go through your bank statements and highlight every transaction that falls into one of those categories. We need to find an estimated monthly average, so it is important to add up the totals in each category for each month.
For example, you may find your spending looks something like this:
Feb March April
Shopping $850 $927 $819
Dining out $290 $180 $220
Entertainment $110 $90 $83
Next, add the total of three months together for each category and divide by three to find your monthly average.
Shopping: $850 + $927 + $819 = $2,596 divided by 3 = $865.33. That is your monthly average for shopping.
The goal is to deliberately reduce spending in areas that can be cut back and re-purpose those dollars toward debt elimination.
In the example above, the average amount spent on dining out is $230. Ask yourself, “How much can we pull back on dining out and still survive?” Let’s say you agree to reduce your dining out by $80 and set a monthly budget of $150. That’s $80 that you have recaptured to be used for debt elimination!
Now give entertainment and shopping the same treatment. Consider your cable or satellite TV service. Cable and satellite TV services are quickly becoming obsolete given today’s technology is able to provide streaming video, free news options, and other lower-priced entertainment offerings. How much money can you divert away from television or your cell phone bill? Take a hard look and make some calls to these service providers. Request lower monthly payments and you may be surprised at the results.
Aggressively identify as many dollars as possible to put to work toward your goal of being debt-free.
Adding $100 per month to the minimum payment on a credit card balance of $5,000 with 16% interest, results in the balance being paid off in 19 months instead of 12 years! That’s exciting! Think about the reality of being debt free by focusing and re-directing those dollars you already have toward defeating your debt!