Tomorrow
Posted by jefferson on Jul 24, 2012 in Eliminating Debt | 48 comments
“Never leave that till tomorrow which you can do today.”
-Benjamin Franklin
People often ask us why we waited so long to start getting our finances in order, and this is a valid question. After all, the smaller your debt mountain is, the easier it is to climb. Had we decided to get rid of our credit cards and start working in overdrive to get rid of our debt years ago, the challenge that we are currently battling would be considerably less formidable. A similar question was posed by one of my kids the other day as we were watching Extreme Makeover- Weight Loss Edition. He asked “How did they let themselves get to 500 pounds? Didn’t they realize that they had a problem when the scale topped 250?” The answer to both the weight question and the one about our finances is the same. Facing your issues head on isn’t easy, and putting off your problems until tomorrow seems far too attractive an option.
I think that our debt story is rather typical. My wife and I had flirted with consumer debt for years, living in a yo-yo cycle where we built up some debt each year, and tried to pay it down with our tax refund and any bonuses that we received from work. We were living paycheck to paycheck, with razor-thin margins at the end of each month. We didn’t have a clearly outlined budget, and if any unexpected expenses crept up, taking out the credit card was our only option. This was, of course, a foolish way to operate, and as the years passed, it became more and more difficult to keep our debt total under control.
During that time, I can’t say that we really gave a whole lot of thought to tomorrow. We never made a strong commitment to paying off our debt, because it didn’t seem like an attainable goal. Each month when I logged into my bank’s website and fired off hundreds of dollars of payments to our various creditors, I tried not to spend too much time thinking about what these payments meant. This ever-growing portion of my budget that was dedicated to fattening the accounts of Citibank and Chase Morgan Stanley, was money that I was not going to be able to use towards our goals. My retirement accounts were growing at a snail’s pace, my kids’ college funds were nearly non-existent, and my creditors were just sitting back and letting my hard-earned cash roll in.
Of course, as with any home-owning family with small kids- unexpected expenses did creep up. Our family car broke down, the furnace gave out and needed to be replaced, and we were hit with a whopper of a bill for the birth of our third child (yes, even with health insurance). My employer, faced with a downturn in the economy, cancelled their bonus program outright, taking away thousands of dollars that we had been counting on. To top it off, we examined the pros and cons (and day care costs) of my wife continuing to work at her job vs. staying at home and becoming a full-time mommy for our new baby. The picture was clear; our debt had climbed to its highest level yet, and we were now a one-income family.
The next chapter in the story is what we have been discussing in this blog for the past six months. We have already eliminated $9,500 of debt and are on pace to be debt-free in early 2013. My wife and I have learned a valuable lesson, and we did it the hard way. By continually waiting until tomorrow to start addressing our problems, we just made them that much harder to resolve. And every tomorrow has another tomorrow right behind it. If we had changed our lifestyle and spending habits and built a proper emergency fund years earlier, we would have been ready for these curveballs. If we had investigated and budgeted for the skyrocketing costs of prenatal care and childbirth, we could have absorbed them without having to take on thousands of dollars of additional credit card debt. If we had learned to make a budget and started supplementing our income with additional work and some imagination, we could have learned to plan for the future and stop living paycheck to paycheck years ago. The changes that we have incorporated into our lives recently were long overdue.
In our new world order, we have a different outlook towards tomorrow. Tomorrow is not an acceptable option when it comes to changing our financial reality; it has to start today. Tomorrow is when we will have total control over our money and what we do with it. Tomorrow is when we will save up for something that we want to purchase, instead of taking a high-interest credit card loan from Joe Banker. Tomorrow is when we will have a plan for paying for our kids’ college and for our own retirement. It makes me smile to know that we have taken the right steps to make sure that the sun *will* come out, tomorrow.
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Getting out of debt is never an easy thing to do. It took me a little over one year to do it. Congrats on keeping it going, and look forward to your “debt-free” post in early 2013.
Eddie recently posted..Finance Fox Weekend Recap: Seven Super-Duper Reads From This Week
We are committed to getting there, Eddie.. Thank you for your support and kind words.
I’ve found that I tend to avoid doing something if I feel like I don’t have adequate knowledge to make a decision. We set aside $2k to open two Roth IRAs in June but we just haven’t done it yet. Mutual fund jargon is a foreign language to me and I want an adviser I trust. Poor excuses, but “tomorrow” gets the best of me with this topic.
Jessica @ Budget for Health recently posted..Keep a weekly food journal to lose weight
I think this is wise, Jessica. In the world of investing, you can’t jump in blindly. While “waiting for tomorrow” can have dire consequences when it comes to fixing your sinking (financial) ship.. It isn’t a bad idea when it comes to investing, if it means tomorrow means you can make smarter and more educated decisions.
I am a worrier so it comes naturally to me when we have some debts. In this case, being anxious pays off since it prods me to finish paying those loans even before the due date. I could never rest knowing we had unpaid debts. Even with a small income, our family has some emergency fund, live comfortably on our budget and can spare some amount when there are necessities cropping up.
Amy Turner recently posted..Getting Out of Debt
Actually, it doesn’t sound like your debt is as bad as it could be. Which is great news. And now that you guys have committed to stop yo-yo debting, you’ll be set really soon! ANd man, what a great observation your kid made about weight loss.
TB at BlueCollarWorkman recently posted..How to Treat Your Garbage Man
Yo-yo debting is destined for failure, because new expenses will always crop up. And you are right about the weight loss observation, I was floored.
Very inspiring! What are you going to do with the blog when you’re out of debt in a few short months??
Emily @ evolvingPF recently posted..Why We’re Not Getting the Chase Sapphire Preferred Card Even Though It’s a Great Deal
Emily, we aren’t going to count our chickens before they hatch.
If we meet our goals, and we have every intention on doing so, our lifestyle isn’t going to change.
We should still have stories and tips to share with the world..
I love the personal stories you tell, and I’m excited for you to reach your debt payoff goals. I can’t imagine having to pay off that debt and raise a family. Kudos to you!
L Bee and the Money Tree recently posted..Requiem for a Nightgown
Thank you lbee.. Very nice comment. The kids can make it challenging at times, but they are also a huge motivator. Every time we look at their beautiful faces, we are reminded that it will be easy for us to give them a better life with better experiences, if our finances are in order.
Great post! And that’s correct about the weight comparison, I’ve never thought about it that way.
Michelle recently posted..What’s NOT in my Purse?
Lucky for me.. My journey to a more healthy weight is quite a bit smaller than our journey out of debt (I am only shooting to lose ~25 pounds)..
I think the first step is the hardest. Many people have to get to “rock bottom” with whatever it is that they are doing prior to fixing their problem. I am lucky that my rock bottom was never too dramatic.
Daisy recently posted..Handling Mistakes at Work
I don’t know if we allowed ourselves to slip all the way to the rock bottom, Daisy. But without a doubt, finding ourselves buried in debt with one income, and 3 babies to take care of was a serious wake-up call!
Great post! I just finished up a series where I highlighted some poor choices I made that added up to me being in debt–alone, they might not have. It’s hard to take that step forward to stop doing something you’ve been doing forever. It doesn’t happen over night.
bogofdebt recently posted..And I hit rock bottom
That is a really great series on your site.. We have gone into great detail here on See Debt Run to discuss the various things that we are doing to cut spending, and to raise additional funds.. But I don’t know how much time we have spent discussing how we got into financial trouble. This is a big reason why I wanted to write the post above..
Nothing like a new baby and a switch to being a single income family to open your eyes about your debt. I think early on in paying off a lot of debt it is natural to have little motivation to clear it off. With no end in sight you just slowly chip away at it, likely paying the minimum. It sounds like your new found approach is working very well. Best of luck clearing off that debt and building up a better tomorrow.
Modest Money recently posted..Does Everyone Need An Emergency Fund?
Our new approach is working well for us, Jeremy. We have made a ton of progress already, and as the debts fall, one-by-one, we notice the strain of our monthly bills easing up ever so slightly.
Totally thought about the movie Annie.
Very thought-provoking post. I have to agree that the thoughts of tomorrow spark all thoughts of financial order and organization. I wasn’t living for tomorrow when I was racking up consumer debt and buying everything like there was NO tomorrow. My thoughts have changed and mentality has shifted, and I am so glad to be living for tomorrow.
From Shopping to Saving recently posted..I Don’t Even Have a Backpack
So true, Erika. I think that concern for our future and a better tomorrow played a huge role in us getting our house in order.
That’s a great observation your kid made about weight loss. I’ve said that before, people can’t even be trusted to manage their own health (by staying at a healthy weight) why should their finances be any different? Congrats on bucking the trend and starting the long and slow climb out of the hole. I’m right there with you, slogging on and paying for past mistakes. It’ll be worth it when it’s done!
Jordann @ My Alternate Life recently posted..How I Wiped Out $16,000 of Debt in Minutes
There are definitely parallels between weight loss and debt repayment.. I know, because I am trying them both right now! First and foremost, they both require a ton of patience!!
So true, Jefferson! I think that is how so many of us end up with so much debt: we’ll just deal with it tomorrow.
And then tomorrow makes itself known…
Mackenzie recently posted..Christmas in July
Sometimes tomorrow barks at your loud and clear, Mackenzie!
I think starting is the hardest obstacle to overcome. It forces you to admit there is a problem and that change is necessary. Furthermore, changes requires knowledge and an understanding that things can be better (and different). However, many people lack that basic knowledge and believe the life they’re living is the status quo (therefore okay).
I’m glad you guys got started! If you wouldn’t have then you wouldn’t be one of my awesome blogger buddies!
Jason recently posted..Being Cheap or Frugal – 12 Signs You’ve Gone Too Far
Jason, you are so nice. Seriously.. one of the nicest people ever, and you are so right. There are many reasons why I love writing in this blog: it motivates us to get our butt in gear and it allows for us to branch out and interact with some many great people!!
You are about to change the saying “Tomorrow will be worse” into “Smile, tomorrow is another win over debt!”. Good luck with the battle over debt.
gekko recently posted..Would you hire back a person that left?
Tomorrow will be the day that we kick our debt in the rear!.. Well, not tomorrow literally.. but a tomorrow really soon!
This may sound funny, but the problem with today is that it has to end at some point! Especially since starting blogging, I often am plugging away at things and before you know it it’s at least an hour past when I should have headed to bed. If only “today” was 100 hours instead of 24
DC @ Young Adult Money recently posted..10 Skills to Add to Your LinkedIn
I know the feeling DC.. I think I finished touching up this very post at about 1AM the night before
Don’t stop thinkin’ about tomorrow!
I can’t wait until we can write things like, yeah, so back in the day, I had some debt.
Kathleen @ Frugal Portland recently posted..The camera of my dreams
That is going to be awesome, Kathleen. I am confident that we both are well on our way!!
Can’t wait to see you out of debt! You are almost there! The first step is the hardest!
SavvyFinancialLatina recently posted..The Exciting and Not So Exciting Parts of Growing Up
I am so glad that we made the decision to start living in a responsible way.. One of the best decisions that we have ever made.
What an important story to tell that we can all relate to! I’m not even married with children yet but have still been musing about why I didn’t take care of my financial situation more aggressively right after college. You are absolutely right, without having a clear picture of the goals of tomorrow, it can be very easy to ignore the problems happening now and push them off.
Shannon-ReadyForZero recently posted..Fun Staycation and Local Travel Ideas That Can Save You Money
Shannon.. I hear you loud and clear. When I graduated from college, I was making good money and had no responsibilities to speak of. Did I jumpstart my retirement and build up serious savings during this time?? Of course not. I spent pretty much everything that I made.. Looking back, I don’t even know what I used to spend all of my money on.
Yep, that’s exactly how I feel. Better late than never though!
Shannon-ReadyForZero recently posted..Can The Mortgage Forgiveness Debt Relief Act Help You?
Tomorrow is everyone’s favorite day because tomorrow will be different. Things will change tomorrow. But really – things will be the same tomorrow because you did nothing new today. Great article.
A Blinkin recently posted..What Makes Me Different? Funancials’ Value Proposition
So true.. Mr Funancials (Love your site, by the way)…
If you don’t change the way that you are living today.. Tomorrow will be exactly the same…
I know how much your financial situation can change when you have kids! It can be a real shock to the system and you can feel pressure from all sides with less coming in and more going out.
My wife is also a full-time mum and although it brings extra financial stress it also brings great rewards!
As you say ignoring the change in your financial situation can soon land you in financial trouble. I completely agree that changing your money habits today, can prevent or solve big financial problems tomorrow.
Great Post!
Money Bulldog recently posted..Save Money ~ Raising A Baby On A Budget!
Nice to read this article. It ain’t easy way to get rid of debt..
I’ll follow this blog to give some inspiration
zolar recently posted..Ways to Protect Yourself Against CyberCrime
Welcome, Zolar.. I hope you stay a while
Very inspirational post, Jefferson. Where I am today is the culmination of efforts or lack of efforts on my part for the past 5-10 years. And, where I will be in next 5-10 years will be defined by what I do today and going forward for the next 5 years.
Shilpan recently posted..10 Reasons Why it’s Easier to Build Wealth Now
Shilpan.. Michelle is almost always the first person to read my posts.. And after she read this one.. She told me 2 things. 1> She really liked it.. 2> It reminded her of something that our friend Shilpan would write on Street Smart Finances.
I considered the latter comment to be some serious flattery.
Great job so far! It will be such a relief when you are debt free. We don’t have any consumer debts, but are still working on the mortgages. We are paying extra every month, but it will still take years to pay that off.
Joe @ Retire By 40 recently posted..First Week of Retirement
I think that this is a very important idea – so many times I see people tell themselves that they’re going to be better “tomorrow” or that “tomorrow” they’ll start exercising/saving money/whatever. But it’s easy to make excuses and one day, you run out of tomorrows. It is so important to start today, even if it is just a small start.
CF recently posted..Don’t donate to charity
Amen. It’s so easy to let things slide till tomorrow, but it’s so much easier to live with the mentality of, “If I can do it right now, I will.” This can apply to so many aspects of our lives, including PF and debt.
femmefrugality recently posted..I’m in the Olympics