The Howards

March 15, 2009

In August of 2007 our family started our journey to being debt-free. The main motivation for doing so was freedom. My husband wanted to leave his job and start a home business, but we could not do that with the debt load we were carrying which was $33,673.28. This included credit cards, student loan, car, home equity loan and medical bills. It did not include our home on which we owed about $65,000.

I started by reading Dave Ramsey's Total Money Makeover. We adopted his plan of saving $1000 first, then paying off loans in order of highest interest rate. My husband does occasional contracting work outside his normal job, so in August we were able to save $1000 and also put aside the money we would need for buying Christmas presents. We have five children and we buy for our parents, but we don't go crazy with Christmas giving. We set aside $500 for gifts. It felt good to meet our first goal so quickly.

Our next goal was to pay off medical bills with a flex account my husband had at work. These totaled $1612.50. In September we paid $363, but then my husband decided we needed to change our goal. We had gotten behind in our tithe to church by $1354. My husband wanted us to pay this off before we continued paying off our other debt. He also wanted it paid off by the end of the year. I knew he was right, but I felt a little discouraged that our plan had been interrupted. I also doubted whether we could pay it off in that time frame. Unless my husband brought in extra income, we barely had enough to pay the bills each month.

In September we used $670 of the flex money to pay off back tithes. Using all extra money that came in through extra work he did, we paid $250 toward tithe in October and the final $434 on December 2. On Monday, December 3, my husband found out that he had been awarded a private grant to develop an educational website. The amount of the grant was $37,000. Just about exactly what we needed to get out of debt after we paid taxes and tithes on the grant money! It couldn't have been any clearer to us that God was rewarding us for obeying His command to give our tithe to Him first.

The money is being paid to my husband over the course of about 18 months as he completes the work. Since paying off our tithe, we have continued to work diligently at paying off our debt. By March of 2008, we had paid off about $3000 in credit card debt. In April, we paid off the final $3180 of my husband's student loan from his master and doctorate degrees! What a sense of relief! We had had that loan for ten years.

That same month we also paid off another $1338 in credit card debt. In May, we bought all of our homeschooling books for the year ($2579) using the stimulus checks the government sent. June we paid off another $1000 in credit card debt.

In July, because of a four-month stint of sickness in our family which required a lot of my time, I stopped keeping accurate records of our debt payoff. We have, however, continued to work diligently to pay down our debt. Our remaining debt is about $5500 at 2.9 % for our car and $6100 at 9% for our HELOC. We hope to have all this paid off in the next 6-9 months.

In December of 2008, I was in an accident which totaled our car (it wasn't worth much). We determined that we would not spend more money than the $3100 the insurance company gave us for our settlement. We found a 2000 Chevy Venture that had 8 seats and about 40,000 fewer miles than the 7 passenger 1999 Chevy Venture I had just wrecked. We found it on Craig's list. We were able to test drive it after pumping up the tire. However, the next day when we went to purchase it, we discovered it had a gas leak which meant we couldn't drive it. The man cut the price from $1800 to $1500 and we took it. After having it towed, fixed up, detailed (it was filthy), towed, fixed, towed, and fixed all within a 2 week time, we now have a car that suits our family well. We have spent about $600 more than the insurance company gave us, but we are still pleased that we don't have another car payment. The "check engine soon" light is on constantly. The repair shop says there is nothing wrong. We put a piece of paper over the light which says "pray". It is a daily reminder that God is providing for us. The car made it all the way to Florida and back without a problem. We feel blessed.

I try to keep strict records of where our money is spent. As much as possible, we use an envelope system to keep our spending under control For our family of seven (five children ages 2-16), I try to keep our food budget at $500. This takes a lot of effort, especially since we have many food allergies in our family which require some special ingredients and don't lend themselves to coupon use. We have basic cable, although I would be fine canceling this altogether. We have basic phone and use a company called ECG for long distance. Internet is a large expense, but we use it all the time for my husband's private contracting jobs and for our homeschooling and many other things. We do splurge on music lessons for three of our children, but if we had to, we could eliminate those for a while.

We have been able to work our way towards being debt-free for two reasons: my husband's willingness to work extra hours to bring in extra money and our family's willingness to be thrifty. God has been good in providing for us. My mother gives us money each season to buy clothes for the children. We gladly accept hand-me-downs. My husband and I discuss all purchases before we make them. His weakness is computers and electronics, mine is books. When we get money for our birthdays or Christmas, we use it to buy things that will help the household economy. For instance, I saved my gift money until I had enough to buy a Bosch mixer which allows me to mix enough dough for six loaves of bread at one time. Our children use their money for things they want, but don't need. They understand our goal and are completely onboard. Our older daughters help prepare meals which saves on eating out -- which we rarely ever do. My oldest has learned to sew and earns her spending money by sewing modest clothing for others.

God has allowed us many blessings during this time. Recently we were able to go to Florida where we stayed on the beach for a week and then went to Magic Kingdom, Epcot, Gatorland, and Medieval Feast. The first part of the trip was almost completely paid for by my husband's employer since he was down there on business. We also got to go to Kennedy Space Center for free. My husband was working there for the week and asked if they had free tickets we could use. They did -- it never hurts to ask! The second part of the vacation was complements of my father-in-law who was also in Florida for business. He found some great deals -- a house for rent for $85/night just minutes from Disney. The whole trip cost him about half of what he had budgeted. We are so thankful God provided this unnecessary, but very welcomed vacation to sunny Florida in February.

It takes a lot of work, time, and discipline to get out of debt when you are in this deep. I'm so glad we are nearly finished since the economy is tanking. As soon as we are out of debt, we will start building a much larger savings account.