Living Debt-Free

In his 1992 bestseller The Coming Economic Earthquake, writing about mortgages, home equity loans, and easy lines of credit, the late Larry Burkett noted that "[c]learly[,] many American homeowners have transferred the wealth stored in their homes to the lenders. In this case, it leaves both in jeopardy. Given the wrong set of circumstances, the homeowners will default, leaving the banks with huge inventories of homes they can't sell."

Of course, by 2007, "the wrong set of circumstances" had become "the perfect storm" for many homeowners, lenders, and the government.  America's addiction to debt had finally brought us to the "economic earthquake" Burkett had forecasted. 

Make no mistake about it, as the debate over the debt ceiling illustrates, our crisis is a crisis of debt.  Individuals, families, businesses, and governments all across the U.S. have learned the hard way the lesson of Proverbs 22:7: "...the borrower is slave to the lender."

My wife Michelle and I have weathered this storm better than most.  Very early in our marriage, we learned a valuable and simple lesson when it comes to managing money: how to live on a budget.  Over 13 years ago we established a workable budget that we maintain to this day.  Whether we are talking about the government, a business, a church, or a family, a good budget is essential in maintaining a healthy bottom line. 

A budget can help keep you from overspending during any particular income period or in any particular area; help you plan for non-regular expenses, such as car repairs; and help you plan for your financial future.  Establishing a budget can be a lengthy process.  It can take as long as a full year for an individual or a family to get a budget working well, but the benefits are well worth the hard work involved.

Our budget has played an essential role in helping us through these difficult financial times.  I despise the rise in gas and food prices that we have experienced over the last several months.  We are a family of six, so these increases have hit us hard.  Our budget is in constant flux, but it helps us see the adjustments in spending that we need to make and therefore maintain sound financial discipline. 

A few years ago I moved from teaching at a private school to teaching at a public one.  This decision in large part was made for financial reasons.  However, it was not a rushed decision.  It was one that Michelle and I weighed carefully over many months, and our budget helped guide us in this decision.

There is another element to our financial story that has played a huge role in helping us not only to survive, but -- to an extent -- to thrive, during the Great Recession: living debt-free.  Since making an early commitment never again to be in debt, we have lived the last 12 years of our 13-and-a-half-year marriage completely debt-free.  This includes owning our home, cars (along with having four children), and so on.  (See a video of our financial testimony here.)  Our budget discipline was, and is, very significant in our achieving, and maintaining, this tremendous financial freedom. 

Certainly, owning a home was the largest obstacle to our remaining completely debt-free.  We own our home because over a three-and-a-half-year period, from early 2000 to late 2003, beginning before we had children and just after we had eliminated our consumer debt, we built it from the ground up, contracting it and financing it completely by ourselves.

We performed much of the labor on our home ourselves, but we also had a lot of help from family and friends.  (This is quite a tale in itself, and I hope someday to tell it in writing.)  Again, our budget played a large role in this task as well. 

We are not, nor have we ever been, "rich," at least by American standards.  I've been a public or private school teacher for the last 17-plus years.  Michelle worked full-time for a Christian ministry early in our marriage but has been a stay-at-home mom for about the last 9 years. Our income over the life of our marriage has always been at or slightly above the median income for Americans.

I take almost no credit for where we are financially.  Michelle has always been more financially disciplined than me.  Early in our marriage, through her efforts and the ministry founded by Larry Burkett, Christian Financial Concepts (now Crown Financial Ministries), I embraced the simple, wise truths put forth in Scripture concerning money and debt.  In other words, we are where we are financially by the grace and wisdom of God. 

Our situation was and is a unique one; I certainly would not recommend that anyone do things exactly as we did them.  Our path was, literally, "a calling."  However, I do believe that there are tried and true, simple financial principles that we applied, and are still living by, that would benefit most anyone.

Trevor Grant Thomas, at the Intersection of Politics, Science, Faith, and Reason. www.trevorgrantthomas.com

In his 1992 bestseller The Coming Economic Earthquake, writing about mortgages, home equity loans, and easy lines of credit, the late Larry Burkett noted that "[c]learly[,] many American homeowners have transferred the wealth stored in their homes to the lenders. In this case, it leaves both in jeopardy. Given the wrong set of circumstances, the homeowners will default, leaving the banks with huge inventories of homes they can't sell."

Of course, by 2007, "the wrong set of circumstances" had become "the perfect storm" for many homeowners, lenders, and the government.  America's addiction to debt had finally brought us to the "economic earthquake" Burkett had forecasted. 

Make no mistake about it, as the debate over the debt ceiling illustrates, our crisis is a crisis of debt.  Individuals, families, businesses, and governments all across the U.S. have learned the hard way the lesson of Proverbs 22:7: "...the borrower is slave to the lender."

My wife Michelle and I have weathered this storm better than most.  Very early in our marriage, we learned a valuable and simple lesson when it comes to managing money: how to live on a budget.  Over 13 years ago we established a workable budget that we maintain to this day.  Whether we are talking about the government, a business, a church, or a family, a good budget is essential in maintaining a healthy bottom line. 

A budget can help keep you from overspending during any particular income period or in any particular area; help you plan for non-regular expenses, such as car repairs; and help you plan for your financial future.  Establishing a budget can be a lengthy process.  It can take as long as a full year for an individual or a family to get a budget working well, but the benefits are well worth the hard work involved.

Our budget has played an essential role in helping us through these difficult financial times.  I despise the rise in gas and food prices that we have experienced over the last several months.  We are a family of six, so these increases have hit us hard.  Our budget is in constant flux, but it helps us see the adjustments in spending that we need to make and therefore maintain sound financial discipline. 

A few years ago I moved from teaching at a private school to teaching at a public one.  This decision in large part was made for financial reasons.  However, it was not a rushed decision.  It was one that Michelle and I weighed carefully over many months, and our budget helped guide us in this decision.

There is another element to our financial story that has played a huge role in helping us not only to survive, but -- to an extent -- to thrive, during the Great Recession: living debt-free.  Since making an early commitment never again to be in debt, we have lived the last 12 years of our 13-and-a-half-year marriage completely debt-free.  This includes owning our home, cars (along with having four children), and so on.  (See a video of our financial testimony here.)  Our budget discipline was, and is, very significant in our achieving, and maintaining, this tremendous financial freedom. 

Certainly, owning a home was the largest obstacle to our remaining completely debt-free.  We own our home because over a three-and-a-half-year period, from early 2000 to late 2003, beginning before we had children and just after we had eliminated our consumer debt, we built it from the ground up, contracting it and financing it completely by ourselves.

We performed much of the labor on our home ourselves, but we also had a lot of help from family and friends.  (This is quite a tale in itself, and I hope someday to tell it in writing.)  Again, our budget played a large role in this task as well. 

We are not, nor have we ever been, "rich," at least by American standards.  I've been a public or private school teacher for the last 17-plus years.  Michelle worked full-time for a Christian ministry early in our marriage but has been a stay-at-home mom for about the last 9 years. Our income over the life of our marriage has always been at or slightly above the median income for Americans.

I take almost no credit for where we are financially.  Michelle has always been more financially disciplined than me.  Early in our marriage, through her efforts and the ministry founded by Larry Burkett, Christian Financial Concepts (now Crown Financial Ministries), I embraced the simple, wise truths put forth in Scripture concerning money and debt.  In other words, we are where we are financially by the grace and wisdom of God. 

Our situation was and is a unique one; I certainly would not recommend that anyone do things exactly as we did them.  Our path was, literally, "a calling."  However, I do believe that there are tried and true, simple financial principles that we applied, and are still living by, that would benefit most anyone.

Trevor Grant Thomas, at the Intersection of Politics, Science, Faith, and Reason. www.trevorgrantthomas.com