We started our debt free journey with LOTS of consumer debt. About as much as our gross income. Yep, we screwed up…..BIG TIME.
I remember the day when we sat down and told our four kids that we had made a mess of our money. A BIG mess. We expected them to be ticked. I’m not sure why we expected them to be angry. I mean, it must’ve been obvious to some extent that money wasn’t great by the amount of times we said “no” to anything fun as we struggled to pay the bills each month.
“How did you get into debt?” the then-five-year-old asked.
“Well,” I answered with trepidation, “We spent more money than we had for a lot of years.”
“How can you spend money when you don’t have it?” he replied.
Kids are so logical it’s annoying.
Next thing we knew we were educating our kids about credit cards, about how they give you money to spend on stuff but then ask you to pay back more than you borrowed because of interest.
It was then that the uselessness of it all become crystal clear. The uselessness of keeping up with the Joneses. The uselessness of caring what others think about what we owned or didn’t own. The shock when we realized that we were okay with giving our money to the banks instead of keeping it for ourselves.
We told the kids about how we always believed that wealth was a “luck of the draw” thing: either you had it or you didn’t. And about how we found some info online (the blessed world of personal finance blogs) that showed us that we didn’t have to stay deep in debt and struggling for money.
We told them that we wanted things to be different for our family; that we didn’t want to have to struggle for money anymore. And we told them that our journey to debt freedom meant money would be really tight for a while as we reigned in spending and put extra cash toward debt.
We then made a budget for the first time in our sixteen years of marriage. Like Brian and his family, we used tools like Dave Ramsey’s debt snowball to make a plan for getting out of debt.
And we told the kids that as we worked to pay off debt we were going to teach them a better way of handling money so that they could avoid the mistakes that we made with our finances. Here’s what we’ve taught them (and ourselves) along the way.