Woken Up and Shaken

One of our foundational shifts towards  less financial stress and more peace was in our late 40’s. I had gone to our church for an adult meeting on Saturday afternoon. One of the speakers referenced a talk that changed our lives forever by President Gordon B. Hinckley. When President Hinckley   talked about Pharaoh’s dream with 7 years of prosperity and 7 years of famine, I panicked, doing the math from 1998 to 2006. Yes, 8 years had already passed from the time he gave the talk!

President   Hinckley told the story in the 41st chapter of Genesis, in the Bible. Pharaoh, the ruler of Egypt was dreaming dreams he didn’t understand. His wise counselors didn’t know what to make of the dreams and he had heard of Joseph, who interpreted dreams and Joseph was invited to talk to Pharoah.

Pharaoh dreamed of 7 lean cows, eating seven fat cows. Further, seven weak ears of corn overcame seven fat ears of corn. Joseph was able to tell the Pharaoh that this meant a famine was coming to their part of the world, and that the  Pharaoh should  put  grain in storage  to make it through the hard times. Joseph, the slave, was put in charge of the storing of the grain. When the famine came, in Egypt, “there was bread”.

President Hinckley continues to say :

 “Now… I want to make it very clear that I am not prophesying, that I am not predicting years of famine in the future. But I am suggesting that the time has come to get our houses in order.’

“So many of our people are living on the very edge of their incomes. In fact, some are living on borrowings.’

“We have witnessed in recent weeks wide and fearsome swings in the markets of the world. The economy is a fragile thing. A stumble in the economy in Jakarta or Moscow can immediately affect the entire world. It can eventually reach down to each of us as individuals. There is a portent of stormy weather ahead to which we had better give heed.”

After hearing that, I felt a great urgency “to get our house(s) in order”. In 2006 when I woke up at that Stake conference, I figured we were spending between our mortgage, a home equity line, a loan on a second home and two car loans, about $2500.00 a month in interest alone. We were living the dream but also paying a huge price for that dream every month.

“Sick and Tired of Being Sick and Tired”

Dave Ramsey, the financial guru says, “So, you’ve decided that you are finally sick and tired of being sick and tired. First, let us congratulate you—admitting that is the first step to becoming debt-free!”

 I was sick and tired of worrying about money and honestly a little frightened. I heard Gordon B.  Hinckley’s talk and then found Dave Ramsey, who touts being completely debt free. My husband  said, “It’s the American way to always have a mortgage and car loans.” Then he listened to 8 hours of Dave’s radio show.

We believed Dave Ramsey. He convinced us that we could do it by featuring people every Friday that would scream, “We’re debt free!”

If they could do it, so could we. Here are Dave Ramsey’s baby steps, 1-7 from his website, daveramsey.com:

Baby Step 1: Save $1,000

Baby Step 2: Pay Off All Debt(Except the House) Using the Debt Snowball

Baby Step 3: Save 3–6 Months of Expenses in a Fully Funded Emergency Fund

Baby Step 4: Invest 15% of Your Household Income in RetirementBaby Baby Step 5: Save for Your Children’s College Fund

Baby Step 6: Pay Off Your Home Early

Baby Step 7: Build Wealth and Give

It is a simple map to becoming debt free and learning out to manage money. Dave Ramsey also says, “Live like no one else and later you will live like no one else.”  We did his debt snowball which was the smallest debt to the largest and it was true when we would get rid of a debt we were so happy, and it kept us motivated,  getting rid of each debt, one by one. We were changing the way we thought about money, and putting action to those thoughts. We were doing it! It was possible!

Where to start if you are nervous about your future? What I have learned about waking up and controlling my finances is that I had to change my behavior. Changing the way I had thought about money, or ignoring money in the past would not help me be secure. I looked at our bank statements to see where we were spending extra money. I started calling my creditors to see if I could reduce the interest rate they were charging. I had to realize that I was the only one who cared enough to get into the gritty details of my life–the government would not, and my parents did not want to. If your partner is doing all the financial work, you need to step up and get involved so that you know what to do if something happens to them.

There have never been more ways to educate ourselves. People have spreadsheets of their personal finances on youtube and on blogs. Look up how to pay off debt. See what crazy extremes people are willing to go to in order to get out of debt. It is inspiring to start educating ourselves to “not live on the edge of our earnings or on borrowings.”

Recently, members of my family have been reading The Psychology of Money. In 20 short chapters, the author, Morgan Housel, explains how if we understand the psychology of money and are willing to use these principles to change our behavior it can move us towards being successful in managing our money. Some of those principles are:

  1. Saving consistently, no matter what. Pay yourself first.

2. Be patient. Anything that sounds too good to be true is.

3. Stop moving the goalpost, or when is enough, enough?

4. You can’t beat the power of compound interest.

One of my favorite quotes Morgan Housel says is:

The highest form of wealth is the ability to wake up every morning and say, ‘I can do whatever I want today.’ 

How have you been taught by your parents to manage your money? How would you feel to have more control of your future by managing your money better? I would love your comments below!

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