Debt Free Journey… How to Stay Out

I’m back after a bit of a hiatus, partially due to other priorities, as well as some website issues after I migrated domain managers. Now that, this is all out of the way, it is time to get back. My goal is to really zero in on finances, while you will still see the posts regarding growth and leadership, many of these start with your finance.

Let’s start off by painting a picture. Close your eyes after you read this and try to picture it. It might sound a little familiar, or it might not, but it will help to lay the groundwork for where I am going here.

You are out of college, you got your first job, maybe have a girlfriend and life is looking great. Now that you have graduated from college and no longer have to work that dead end retail job those paychecks are looking bigger and suddenly that car that seemed to serve you well for all those years is just not as cool, so you go car shopping and find a nice car that you can easily afford the payments on based upon that new cushy salary you got. About a year goes by and you and your girlfriend are starting to get serious, maybe time for marriage, then of course with that comes the need to buy a house, combine finances…and the story continues. As the years goes by you get promotions and/or pay increases, bonuses and somehow you are just paying the bills month to month.

Now that you have that picture in your head I want you to help you see that your job is now tied to your debt, your peace and everything you have. If the company changes trajectory tomorrow or you could feel like you are stuck and would like something different, but now if you lose your job or step away from your job, you could default on your car payment, house, rent… The list goes on, that is why finances and work are so critically tied together and why finding that peace is so important.

Now, let’s flip that picture a bit, same scenario above, but you save 15% from each paycheck or MORE, you keep your rent where it needs to be and you drive that car continuously because it does the job intended for it. Now you owe no one anything, you have money in the bank and you keep yourself in control. Your focus is on living within your means and now you have a nice nest egg, a 3-6 month emergency fund and a plan for your future. Should you lose your job or need to leave tomorrow, you have no fear, you have a fall back fund to take care of you and there is no longer that OH NO moment. That is what I call financial independence or financial peace.

The challenge with scenario 2 is the pressure from the outside, you work hard, your friends and colleagues are telling you about the latest cool features in their car and well you know that car you have is not the most exciting one to drive. I’ve been there, I purchased a brand new 2001 VW Jetta, Wolfsburg Edition. I felt I earned it and I justified it to myself at the time and really loved that car. I drove that for 160K miles before I parted ways with it, because I got annoyed with it and wanted something new with Bluetooth and all that… That continued up until my Jeep, which I paid cash for. Now the only good thing I did in all of this is that I kept to 1 car payment at a time, my car, Shea’s car, Shea’s car, Shea’s car…yes, she got many replacements over my 160K miles, but part of that was due to a growing family.

I say all this to show that, this all seemed normal to me. The car payments seemed reasonable, but the retirement account and savings never increased. My wife and I were pretty good with planning house upgrades and paid cash for them, but definitely managed them. I paid off my credit card monthly and occasionally, especially around Christmas let that get a bit out of control, taking me a month or 2 to get that paid off.

Again, no big deal, all was normal, until pressure started, job constraints, potential losses and before you know it I was feeling the pressure. I don’t want to feel that again. Now I tell my story many times as a bit of dumb luck. For the most part I’m what people would call a Baby Step Millionaire, but here is how that happened. My home appreciated greatly! My 401k stayed above my employer's match at 6%, creeped up to 10 at one point, but stayed above 6% thanks to some great advice I got early in my career. I had a whole life policy for about 10 years that I discovered, got rid of and cashed out that matched my car loan for Shea’s vehicle so I paid it off. Now I invest 15%, have 50K sitting in the bank and if I lose my job tomorrow, that is ok, all is good and I am sure that I will find something else.

What does that open up…the opportunity to work differently. I can take risks, be fully me and not do things in a way with concern for my job. It sounds silly, but it is the truth. When you don’t really need that paycheck it changes the way you work. Do I like my job?, Absolutely! I love seeing individuals grow, I love coaching to see others get better and overall appreciate the people I work with. At the same time, I do not come into work because I need the job, I come into work because I want to.

All of that is intended for you to think through your story. Do you want to be debt free? Do you want to find that peace? If not, continue the way you are going, no one says you have to do it this way. There are plenty of influencers out there that will tell you to leverage debt, use it for yourself… You have to decide what is important for you. For me, I sleep better knowing that I am on track to pay off my mortgage about 8 years ahead of schedule (with a goal to pay it off before my youngest son goes to college). Not having to pay a bank for my car, lets me see the title is mine and only mine (and Shea’s). That is how you stay debt free!! Stay focused on what your goal is, know your why, and keep focused on that. Becoming debt free for some is hard work, for me it was a focus of how I used what I had, along with a little smart work and a good job. If it is hard, keep after it, because that will make you never want to do it again. Be content with what you have. That is really the key!! Know your why and be content.

Godliness with contentment is great gain (1 Tim 6:6)

Trust what you got, don’t let things you don’t have frustrate you. My Jeep is 10 years old this year, almost 155k miles, but running strong. Would I love to have a new one or a new more comfortable car… you bet, but I’m good with what I have and happy with what God has given me. Do I upgrade my Jeep sure, it makes me love it a little more again :)

Stay content, know your why and stay focused.

(Opening picture is my son dreaming of this car one day... never go to a car show or a car dealership when you are trying to be content)