Thursday, July 22, 2010

Overcoming the Money Funk ~ My Financial Testimony (So Far)

Upon receiving the call from the car place last Friday afternoon, I sent my husband a text with the news:
"Well, they found more wrong than just the brake pads...After all parts and service, it's going to be about $350..."
He immediately called me at work to ask how I was doing and if I was okay with the amount. Whether or not you pay with cash, check, or throw it on the emergency credit card, $350 is no small chunk of change (at least not in the minds of recent seminary grads!). After hearing the tone in my voice when I assured him I was fine and we would just have to take the hit, my husband who knows me so very well was quite surprised at my level of calmness. In the midst of a season when we are on a tight budget with one income, more than likely moving apartments to one less expensive in November, him searching on an almost daily basis for church postings, I didn't snowball into what we have affectionately come to know as "the money funk."


For quite some time, years perhaps, I have viewed the idea of a financial testimony as something one can't declare until they have arrived at the end goal (whatever that end goal may be). I would hear stories of individuals and families reaching the enormous goal of getting themselves completely out of debt, and would think to myself, "Hopefully some day my husband I will have a story to tell, too." Call it the results of my upbringing or the fruits of an ungrateful and worry-filled heart, but I have always been a "glass half-empty" kind of girl and very short-term thinker. If I'm faced with something unexpected, especially something higher in cost than seems affordable, my immediate inclination is to downspiral into "the money funk." Definition: my reaction is panic rather than calmly thinking things through, freaking out rather than exhaling, and trusting (believing) in that moment that the Lord is our Provider and is sovereign even over this financial matter.


While there are definitely long-term goals to work towards and achieve, my perspective on the here and now has been shifting recently. Through the small goals achieved, through taking financial matters one day at a time, through maturity and trusting Him more with each passing day, I have learned that I am already in the midst of a financial journey and testimony! My gratitude for my husband and his perspective on finances and debt has deepened as he has been such a calming factor when I am prone to react with anxiety. I have also realized more than ever that we can derive so much wisdom and encouragement from others who have made the financial decisions (both the wise and unwise they have learned from) that have led them to where they are currently and what they hope to accomplish in the near or distant future. Through putting all of this sound advice together, spending extensive time confessing my lack of faith in the Lord, submitting my selfish and limited perspective to Him, I have come a long way from where I was! Below is a list of things I have gleaned from others and learned during this journey thus far. Keep in mind that my husband and I still have debt and we are still far from where we would like to be, but these pointers have been of significant help for me to keep in mind as I take things one day at a time:

1) Don't become overwhelmed and paralyzed with the total amount - Breaking it down helps begin setting and achieving those smaller goals. And for those who have control/anxiety/stress issues and struggle with daily trust in the Lord, let this one speak for itself. Trust Him and be a faithful steward of what has been afforded to you. This is a daily journey.

2) Remember that there are always others who are much worse off than you - my husband reminds me continually (sometimes daily) of all we have to be thankful for, for all we have that we don't deserve!

3) Snowball technique - The snowball technique helps break down the total debt by paying off the amounts from smallest to the largest that you owe. You might have to consider varying interest rates with this one; you might be paying off your smallest debt while another one is accruing interest at a pace that may cancel out all your efforts! Example: the principle I still owe on my car is similar to what I once owed on my credit card. I focused on the credit card because the interest on my car payments was both fixed and a lower percentage.

4) Set aside a certain amount in savings whether big or small - For some individuals, the task of setting aside a lump sum is more achievable in the short-term than it is for others. For us, savings and being in seminary didn't exactly work so well together... My goal was to get a small amount into our savings account and gradually add to it even if in small increments. Some months that small increment was maybe $15-20, while other months it was $50-75. Although our savings account is still meager compared to some (most), I am comfortable with the dollar amount and know that we can pull from it for emergencies if necessary.

5) Itemize your income tax return - So the first year I received a pretty nice income tax check in the mail, I didn't know what to do with it! I was overwhelmed and stressed out about not blowing it on something unnecessary. Thankfully, my husband intervened and we walked through some of the things we wanted to purchase, as well as some small debts we wanted to tackle. After applying what I learned then to this year's income tax return, not only were we able to pay some things off, but I was able to put a chunk in savings and contribute to our health savings account! Even if you think you're being too meticulous, itemizing will get you much further than just buying something on a whim or not thinking through the other specifics of your current finances.

6) Do your research on a reputable, pre-approved credit card - Oi...I'm still suffering the consequences of my first experience in getting a credit card. In my immaturity, I did not do my research, did not ask questions to those older and wiser, and ended up getting a credit card with a horrible interest rate and embarrassing rewards program. I kept roughly the same balance for about four years, only able to pay the minimum monthly payments, and continually felt like I was sinking further into debt quicksand. Thankfully, I was recently able to get approved for a better card which came with a special feature of 0% on balance transfers and purchases until next year. For my personal financial status, this is not only helping me pay off the balance much faster, but my credit score increased - again, do your research! Depending on your financial history, opening up another line of credit might actually hurt rather than help your credit score in the short-term.

7) Take the advice of others, weigh their opinions, and seek wisdom in applying to your own situation - Especially if you're young like we still are and feel like a kid trying to figure out this whole adulthood thing, set aside the pride and ask questions! Family or friends can provide such valuable wisdom! Whether overcoming their own financial mistakes, setbacks that were outside of their control (i.e. medical bills), or those who have been financially wise for most of their adult life, we can derive so much wisdom and encouragement from those who have gone before us!


So this is where we are at thus far. This financial testimony comes from a woman who still lacks maturity, is still figuring things out, and is still in debt. However, even slight progress is progress! I am more at peace with where we are at financially, and I can actually pinpoint areas of focus now, whereas just a year ago all I could see was this overwhelmingly high dollar amount far out of my reach. While each day comes with its own struggles, I know that our financial testimony can speak of the Lord's provision over our lives. My medical bills could have been much higher, my undergraduate loan could have been much higher...I could go on and on. My perspective is shifting from one was characterized by continually reacting in fear to one who is daily learning to trust Him and learn what it means to be a wise steward of what He has given. Mine and my husband's financial testimony is part of a much greater story, and that alone is enough to change one's outlook~

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