It’s Never Too Late To Improve Your Money And Life

Hi, I’m Ruth (aka Prudence Debtfree), and I live in a suburb of Ottawa, Canada’s national capital city. I’m 55 years old, and my husband David is 59. Of our 3 daughters, two are in their 20s and have flown the nest, and the youngest, 19, continues to live with us.

David and I earn a household income that is above average, but it’s not as high as the income we used to receive before the high tech bust of the early millennium sent us reeling.

Before the tough times set in, we had a bad habit of maxing out, and our debt-to-income ratio (total debt divided by total take-home income) just kept increasing. We carried our debts comfortably, and we thought we were doing fine.

With a sharp decrease in income, our debts suddenly became oppressive. After having worked for 10 years as a part-time teacher and then having resigned with the birth of our 3rd child to be a stay-at-home mom, I needed to go back to work full time.

My income as a teacher was much lower than David’s salary as an engineer had been, and there was never enough money. It took a long time for David to carve out a new career path – 6 years – and in that time, our relentless financial stress played into marital and parenting strife that combined to create an awful scenario that I wouldn’t wish on anyone.

I felt like a victim of circumstances at the time, but with hindsight, I know things didn’t have to be as bad as they were. By maxing out, we had set ourselves up to feel any bumps in the road keenly. Many other people were also experiencing career upheaval at the time, but some absorbed it so much more easily than we did.

I remember a stay-at-home, homeschooling mom of many children, telling me about her husband’s job loss. He managed to find another position that paid 20% less than his previous work, “but we paid off the house 3 years ago, so it’s OK,” she said. And they gave 10% of the severance package he’d received to a homeless shelter. So different from us!

What is Your Money Blueprint?

Why had we managed money so poorly in the years when we had a high household income? One of the most powerful concepts David and I came across once we had decided to tackle our debts was from T. Harv Eker’s book, Secrets of The Millionaire Mind. That concept was the money blueprint.

Eker encourages his readers to consider the messages about money, spoken and unspoken that we absorbed in childhood. These messages, he says, create the money blueprint by which we each continue to operate in adulthood – usually without being aware of it.

In late May of 2012, just a week before we would start our journey out of all debt, I wrote my second ever blog post about the money blueprints David and I would have to overcome. To sum it up briefly:

• David realized he had learned that money was something to worry about and that it needed to be controlled. Result? When things were going well financially, he would initiate a big purchase – a new car, furniture, a trip … – so that he could get back to the homeostasis of worry and control about money again.
• I realized that despite the excellent role modeling I’d had from my frugal parents, money was a taboo topic, and it was laden with guilt. I had a false angel on one shoulder saying that money-management was shallow. I had a real devil on the other shoulder telling me that if I whined loudly enough, I’d get to spend what I wanted. I also had a deep-seated expectation that “the man” would take care of all money matters.

So a combination of worry, chaos, control, over-spending, denial, gendered roles, and confused financial motives led to our mess.

“Aha!” Dave Ramsey & The Total Money Makeover

Our 6 six years of intense financial stress came to an end when David started a home business (complete with a business debt) in 2009. Encouragement came quickly, and before long we felt the huge relief of “going back to normal again.” But as our old habits surfaced, we had a vague sense that something wasn’t right. “Normal” felt hazardous.

Again, in hindsight, we have clarity about what was going on, but at that time we were still operating without a compass. This was actually our most vulnerable time. With the business debt and a still uncertain income, our debt-to-income ratio was well over 300% – nearing the level at which many bankruptcies happen.

Although we didn’t realize how tenuous our “new normal” was, we wanted to do better with our finances – to get away from the vague hazard we felt. But our efforts were scattered. Save a bit. Pay off the car debt more aggressively. Oops! Maybe that was too aggressive! Borrow from the line of credit to make the mortgage payment …

In the spring of 2012, a friend of mine dropped off a copy of a book-CD by someone named Dave Ramsey: The Total Money Makeover. After letting it sit by the front door for several weeks, I felt a slightly irritated obligation to listen to it, so mid-May, I popped it into the CD player for my commutes to and from work.

And that changed everything.

By day #2 of listening, I was crying. Not tears of sadness, but tears of revelation and hope! We had too much debt! We had always had too much debt. We’d been dupes of the marketing powers of a debt-ridden culture, and we had the power to change that! We had the power to change us!

I stayed up late that night listening to the CD again with David, and when I eventually fell asleep, he kept listening – long into the night. And we were both convinced. Both psyched to take on this beast!

Team Approach

We had never managed our finances as a team, so it was awkward to make the transition. I had to yank my financial head out of the sand, and David had to release his compulsion to control/worry. Our first attempts at tracking and budgeting were really messy and way off. Our weekly budget “dates” (ha!) were often marked by conflict and irritability. But we made immediate progress!

In June of 2012, aged 49 and 53, our debts were:

• $21,000 in consumer debt
• $81,000 in business debt
• $155,000 in mortgage debt
• $257,000 total debt

I started my blog for 3 reasons:

1. I love to write.
2. I wanted to keep myself accountable.
3. I believed that what we were doing was important – not just for us, but for others who needed and wanted to do the same.

David is leery of online financial tools, so we’ve just used a spreadsheet to keep our numbers visible. And here is the amazing thing our numbers revealed after the first year of our journey out of debt:

• In the year before we officially started our debt snowball – keep in mind this was a year when we were trying to “do better” with our finances – we paid off $16,000 in debt.
• In the year after we officially started our debt snowball, we paid off $50,000 in debt.

With no difference in income, and with no difference in expenses, we increased our debt-repayment by 312% – !!!!!

Sacrifice? Not really.

So what exactly was our secret? Two words: intention and focus. We were on a mission to get out of debt, and we didn’t allow ourselves to scatter our efforts as we had the year before.

Our lifestyle became more frugal, but nothing close to the extremes of frugality featured on reality TV or even in many personal finance blogs.

We let go of our cleaning service and had to figure out a team approach to get the house-cleaning done. We didn’t travel much. We put limits on our discretionary money – his and hers. When big purchases were necessary (like a new roof), we slowed down our debt-repayment and saved until we could pay outright. We played more board games and card games, and we went out less often. We hosted more meals and potlucks and dined out less often. We said, “No thanks” to many invitations that involved spending. Our groceries were budgeted.

We don’t feel like we’ve missed out on much – in fact, we’ve gained the confidence that comes with asserting boundaries – and we don’t expect to change many aspects of our lifestyle in the years to come. We’ll travel more, and we’ll give more, but budgets, board games, potlucks, buying without debt, and team house-cleaning are here to stay. So are focus and intention with regards to our finances.

In December of 2017, after following Ramsey’s plan for 5 years and 7 months, we had paid off just under $200,000 of our debt, we’d saved an emergency fund, and we’d ramped up our investments.

An inheritance then allowed us to speed up the last 20% – our remaining $60,000 mortgage. We had been on track to be debt-free in June of 2019, but we’ll now make the last payment against our mortgage (without any penalty) in September of 2018.

My Advice

My advice to anyone struggling with money – particularly if that person is middle-aged and has been through significant financial upheaval:

• Own your financial situation. Circumstances outside your control no doubt contributed to your current stress, and you might feel victimized by those circumstances. But focus on what was within your control – and acknowledge where you went wrong. So you can have a guilt-fest? No! So you can harness your power to change!
• As you take on your money issues, you’ll find it’s not about the money after all. I found that concept annoying at first, but it was true. There was that faulty money blueprint to unearth; character flaws to recognize; dysfunctional patterns of relationship to confront. Let humbling self-realizations surface as you focus on the monthly budgets and tracking. When you deal with them, you will gain confidence.
• Don’t try to outsource the solution to your financial problems. There is a growing industry out there promising to rescue you from your debt, but be very careful! For example, debt consolidation without changed habits will only free up room on your credit card and lead to greater debt. (I know someone who has consolidated debt 3 times with this result.) Just as a personal trainer can’t do your squats for you, no one else can make your finances healthy. You have to do that. Find your plan of action; find your support network; and then be your own superhero.
• Be prepared for challenges from others who aren’t comfortable with the changes you are making. Friends who don’t like your refusals to go out to restaurants with them; family members who seem hurt by your ramped-down gift-giving; people who don’t get that you have to do what works for you – not what works for them – as you manage your finances differently. Don’t argue with them, but don’t capitulate either. Learn to stand your ground with grace.
• If you are in a relationship, share your financial management together. Don’t make the mistake of leaving it all up to one partner. Even if one person is better at it than the other, both people in the couple need to be engaged, aware, and consulted. If you’re like me, this will involve the discomfort of getting your head out of the sand. If you’re like David, it will include the fear of releasing control.
• Don’t be discouraged by imperfection! Expect your budgets to be inaccurate and your tracking to be incomplete. Your decision-making process will be marked by conflict and uncertainty. Financial progress will be uneven and challenged by the unexpected at every turn. Keep your focus; keep trying; be patient. And maybe your progress amidst the mess will be 312% better – just like ours was.