As I move into my sixties, I love the word “leverage”. Understanding that word means I don’t have to do as much work. In so many areas of my life, I am looking to do a small powerful action that produces big results. How can we leverage the money we make from whatever our jobs are?
- This seems like an obvious financial foundational principle–figure out how to earn more money. We can get a raise, more education, or a better paying job.
- Another way to increase our paycheck is to be intentional, to actually budget and give every dollar we are earning a job.
- We can also pay off debt and have more money every month when we don’t have debt.
- Another thing we can do is learn to stretch the money we get each month to make it last.
- As we get proficient in skills we don’t have to pay someone else to do something for us. One of the best places to start is learning to cook. It’s never been easier to eat out. Plan ahead and be ready when you are too tired to cook something.
One of our foundational shifts towards less financial stress and more peace was in our late 40’s, in 2006. I have written about it here. I had gone to our church for an adult stake meeting on Saturday afternoon. One of the speakers referenced a talk that changed our lives forever by President Gordon B. Hinckley. When he 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 President Hinckley had given the talk! America had very prosperous years during that span of time.
The story he told is 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, the slave, 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 storing seven years of 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 church meeting. I took the first foundational principle of taking responsibility for our money. I dug into the details. 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.
My husband’s earnings stayed the same, but we worked together to “leverage” the income he was making. I was able to do the valuable work of reducing our expenses and be more intentional by eating at home. I learned to upholster furniture and frame our own pictures by learning to use a mat cutter. Because I knew how to sew it helped with our clothing expenses as I mended and altered our children’s clothing. I tracked our debt pay-off, and started using Amy Dacyscyn’s thrifty tricks I had learned about when paying off our student loan. By paying off our debts we added another $2500.00 to our monthly budget, money that had already been taxed and tithed. It was a big deal. My husband wasn’t making more money, but by budgeting carefully and paying off debt, we gradually had more money each month. Each small powerful action was making a difference.
Going through this in 2006 helped us be better prepared for the Great Recession that started in 2008. President Gordon B. Hinckley words were prophetic.
How did we do that? How did we get rid of the interest that was sucking out so much money from our monthly budget? Dave Ramsey 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 doing it! It was possible!
What are some ways we lived like no one else to get rid of our debt?
- We would only buy used cars and drove them until they died.
- We lived in Florida for two months in a rental house paid for by Craig’s company for business reasons. I was curious about the housing development that Disney had designed and so we drove 45 minutes to see the houses. Then we thought, “while we are here, let’s check out Disney world.” We went to Disney world and walked around the entrance with four of our six children and looked at the stores. Our old selves would have caved, and bought passes into Disney World, but we held firm. We were already living next to a Florida beach for two months. That was already amazing.
- We stopped eating out.
- We said no to a trip to Jerusalem because we didn’t have the money for it. Our friends who invited us were shocked, we had always just put it on our home equity line.
- Working with our children in the house and yard instead of paying someone to do it was also better for them learning new skills, and how to do things.
Within 3 years, by 2009 we had paid off 250,000.00 of debt, including our house, a second home, a home equity line and two cars!
We were debt free! What motivated Craig was, “I don’t want to be frugal for the rest of my life. I am willing to live like no one else so later we can enjoy ourselves.” The most important part of being debt free is the financial peace we enjoy. When the fatigue and burden of debt was gone from our lives that was “living like no one else”.
I have a creative brain that leans toward sloppy and chaotic. Figuring out these systems of budgeting, tracking interest, making debt payments and making daily, frugal choices was something I had to see the value in, focus on and push through my discomfort to learn. President Hinckley taught me in 2006 that the good times don’t always last, and being ready is the best thing we can do for ourselves.