YNAB You Need A Budget

[debt-free rocker]

Hello fellow YNAB-ers. After following Dave Ramsey for 2 years, my wife and I finally got on board with YNAB last week. We're so glad we did! This is my first post, and I'm very excited to join you as we all move forward toward financial freedom and prosperity.

Here's where I've been and why I'm so passionate about being free of credit cards. (Previously posted on my blog, www.triptopine.wordpress.com.)

How credit card debt sucked the life out of my life
Why am I ranting about credit card debt on my music blog?
Because too many of us musicians and artist-types have used a credit card to buy a guitar. Or an amp. Or groceries. And too many of us have been burned.

Case in point: I was once foolish enough to buy a guitar amp with a credit card. (I get extra bonus stupid points for doing this at a pawn shop.) Of course I couldn’t afford to buy the amp. (Roland Jazz Chorus 77. Mint.) I was a starving college student. I was also 19 or 20 years old, and I’d recently received five or six credit card applications in the mail. I thought this was FREE MONEY! Being young and ignorant, I responded accordingly, applying for every card I could get my hands on. And every card I received felt like a blessing.

How wrong can a guy possibly be?

Anyway, back to the amp… after taking it home, playing it for a few months, and using it to earn a grand total of exactly $0.00, I decided I was in love with a woman. I took the amp back to the same pawn shop and hocked it for a diamond ring.

Two months later, when the relationship ended and I took the ring back to the same pawn shop, they were happy to buy it back from me. For 50% of what I’d paid for it.

They still had the amp, and I wanted it back. But I didn’t have the full amount. And guess what… they only would accept the minimum $15 payment OR the full amount. After a few months of minimum payments, I realized I would never get the amp back.

So, in conclusion, I lost the amp. I lost the ring. I lost the girl. But I got to KEEP all of the credit card debt!

That’s how this game works.

So here’s my rant. Using credit cards = being in debt. For life. It means sending part of every paycheck to a credit card company. It means living life in debt.

In contrast, being DEBT FREE = walking down the street with a smile. It means not worrying about how the bills are going to get paid. It means abundance, wealth, joy, and the ability to GIVE.

I lived all of my adult life (from age 19 to age 41) in debt. Then I woke up, paid off all of my debt, CUT UP ALL OF MY CREDIT CARDS and closed every credit card account, built up an EMERGENCY FUND of six months worth of expenses, and now my wife and I are saving for a house. (Say it with me: We won’t even THINK about signing a contract until we have at least 20% down, and the terms will be a 15 year fixed mortgage with monthly payments that equal no more than 25% of total income. Until then, we wait, we work, we save, we stay in GRATITUDE for all of the abundance in our lives.)

(NOTE: My wife and I both work for non-profit agencies. It took us almost two years of constant effort to get ‘debt free’. It was NOT the overnight cure that I’d hoped for. Much to my surprise, I’m finding that nothing worthwhile in my life IS a quick fix.)
What’s happening today?

When I get my paycheck each month, I don’t worry about “minimum payments” or “late payments” or “missed payments” to any credit card company. I laugh all the way to the bank. When I want to rent a car or buy an airline ticket, I use my DEBIT CARD. (If a company doesn’t accept my debit card, I don’t USE that company.) I like to pay CASH for things. I don’t owe anyone ANYTHING. Especially not a credit card company.

And with all of the energy and passion that is freed up by releasing debt-related fears and worries, I have more energy for my music, for communing with nature, for connecting with my colleagues, family, friends, and loved ones. My life is simply fuller, richer, and more delicious than ever before!

If you want to live a life of abundance, I recommend getting out of debt and never, EVER using credit cards again. I recommend the movie “Maxxed Out”. I recommend Dave Ramsey’s “Total Money Makeover”. If you aren’t into the religious/spiritual angle, just set that part aside. The financial wisdom is worth the cost of admission alone.

Credit rating? I choose to build wealth and not worry about my credit rating. If having ZERO DEBT gives me a bad credit rating, I’m okay with that. There are mortgage companies like Churchill Mortgage who do MANUAL UNDERWRITING to determine my financial position. They don’t worry about my three-digit FICO score. If I’m in great financial shape, they’ll know it. And I’ll still be able to buy a house at great rates.

(Sorry, Suze Orman. I’ve read your approach and I know you want to protect that FICO score. I’ve also read that you are sponsored by the folks who created the FICO score. Is this true?)

The big banks can KEEP their airline miles. They can keep their complimentary ball caps. They are targeting young adults and college students. They are predators.

Kill off debt. Build wealth.

We can all choose to get rich SLOWLY and have something to pass on to our heirs and favorite charities. We can choose to squeeze the juice out of life. We can choose to be happy. We can choose to be debt free.

And we can choose to start NOW!

Light, love, joy and abundance to you!

(*Special thanks to my father and to my friend Miguel DeLeon for pestering me for years to check out Dave Ramsey’s approach to building wealth and living in abundance. And special thanks to Dave. I’m so glad I finally listened to you!)

[mozzie61]

Great story debt-free rocker. Thanks for sharing, and it's certainly an inspiration to to a silly old fool like me who took even longer (age 19 to 49) to realise just how much credit cards can own you and rule your life. We're determined to become credit card debt free having started with YNAB three months ago. We have a plan of attack to get there using some of the DR principles and the overriding philosophy of YNAB as our budgeting tool. YNAB has been life changing for us and we no longer use credit cards for any purchase. Unfortunately we're still a long way from the desired credit card debt free status, but like you said that's how this game works - easy to purchase lifetime to pay off.

Welcome to YNAB and the forums. I trust YNAB improves your financial life even more than the success you've already enjoyed by freeing yourself from that nasty credit card debt. Best wishes.

[xraymd]

Greetings, debt-free rocker, Light, love, joy and abundance to you! Your post just sings and I really deeply understand how sweet life feels not just debt-free, but also free from being shackled by mindless money-spending habits that mired you for years. I climbed my way out of my own debt to live in the fresh purified realm of having my own choices about my own money. Independence, not indenture!

Even now, I can't have nor get EVERYTHING I want WHEN I want it, because I absolutely do not consider credit cards to be "free money" - but the life-changing process of shedding the debt cocoon truly did change my core. I simply STOPPED WANTING. Now I plan, and my choices are authentic, since I am not driven by the desire to acquire. I love the feeling of satiety and contentment from what I have, and I am grateful for the patience I learned during the 12-year interval it ultimately took to be out of debt. Making debt repayment fun (like using YNAB is fun) took away that ghastly feeling of being imprisoned. Every dime I paid back was a further purchase of my freedom and I learned to love the tracking of the numbers. It was a major reward to see the burden shrink, shrink, shrink. Now the major reward has shifted to seeing my category balances grow like a garden whose yield is bountiful. When I do spend now, I love the whole process, because I own outright what I buy and I enjoy it through and through. And it doesn't matter if it is a Dove bar for a buck, or laptop for a thousand bucks, since I have planned ahead for making room for both. Money saved is stored energy.

Where we differ is that I am not against credit card usage when I use them strictly as a tool. I have proven to myself over many years that their major danger is if they were the pathway to spending without thought, and the major reason why the debt was made so easy to sink into. My use of credit cards was to finance part of my professional education. They did not represent a source of temptation, and don't now, either. When I use the cards, they are paid off in full every month without fail, just as I would do if I used any other form of payment (cash or debit). For anybody whose experience proved otherwise for them, then use of credit cards holds higher risk and I absolutely appreciate that. But it is possible for credit cards to be neutral-to-positive to others whose acquisition of debt was not driven by credit card use.

The final clear path is the same in the end, where owing no-one but yourself, and being true to yourself about how you manage your money, is what leads to breathing the life back into your life. Thank you so much for your eloquent post and blessings to you and to your wife!

xraymd

[Koenigcitizen]

Great posts in this thread! All of them!
I can really relate. Thank you!

[debt-free rocker]

Thanks for the welcoming words, friends! It's great to be here!