Finances can set you free or enslave you. They set the tone for your health and wellbeing. When your relationship with money is good, it spills over into your people relationships and how you empathize with others. Money cannot be the root of evil if it’s used well.

Market Watch says Americans collectively have more than $1 trillion in credit card debt.

Value Penguin reveals the average American household carries more than $16K in credit card debt.

And, the average household with debt owes more than $130K, according to the Motley Fool.

The Bible says, “The borrower is slave to the lender”. Proverbs 22:7.

Don’t worry… There’s no Bible-thumping or self-righteousness here. I just want to share my personal story about how we’ve related to money at different times in our lives.

The wedding

My husband and I both come from families of meager backgrounds. When we got married we paid somewhere around $3,000. Out of that total came the expenses for the church, the flowers, the wedding dress, the cake, the photographer, the DJ, and the catering which we did ourselves with the help of family. We also helped the groomsmen and those standing up with us pay for their attire. I honestly can’t remember if the rings were included in this total. We were frugal. We were married in 2000, and we didn’t have any debt due to the wedding, but we quickly found plenty of other debt to make up for it.

The house and consumer debt

Before long we wanted a house, which we bought, and we wanted to fill it with stuff. We also had two car payments, a motorcycle payment, and student loans. I remember when the first mortgage payment came due and we sat on the couch wringing our hands, wondering if we were going to pay the mortgage or eat. Somehow we did both.

Luckily our jobs caught up with our spending and we were both promoted quickly. All things considered, life was going well until we realized we had too much stuff. We set out to sell most of it. We sold the motorcycle for what we owed on it, not what it was worth, just to be out from under the banknote. Then we sold the house. We used the proceeds from the sale to pay off both cars. And, then, we started over.

A new job took us to a new town, but we weren’t excited about owning a house yet. We were excited about paying off debt. We rented an apartment for one year and took as much over-time as we could. We found Dave Ramsey and his Total Money Makeover book and began working his program. At the same time, we learned how to live on a budget and how to tell our money where to go. A budget sounds scary and restrictive if you aren’t used to it, but it’s really just a plan for how you spend money. You set the rules with your goals in mind.

In one year we paid off nearly all of our debt. Car payments were already gone. Now student loans and credit cards were gone. And, we had savings. We had enough savings to put a 20% downpayment on a house. Better yet, we had another fund for emergencies.

Time to buy a house, with debt

It was time to buy another house. This time we were smarter about the process. We didn’t look to what the bank said we could afford, which was grossly more than we wanted to afford. We worked backward by starting with the numbers. We settled on the price of a house we wanted to afford then went house hunting in the range we set for ourselves. The house payment had room in the budget, not the other way around. We found a house we liked and bought it. Before long we were ready to fill it with kids.

Kids are expensive

Kids are expensive and they get more expensive with age. They are also expensive when you decide to voluntarily give up one income so Mommy can stay home while the kiddos are young. When we found out our first bundle of joy was on the way we cut up the remaining credit card that we kept for emergencies. It had a $0 balance and we had practiced living without my income by using it to pay down debt for over a year. That was in 2005, and we haven’t held a credit card since. We’ve also done a bit of world travel — all on a debit card.

Life happens

As life happened and jobs changed we relocated. We’ve moved away from all family and across the country. History says we move every 4–5 years. That’s a lot of buying and selling of houses. We have bought well, sold well, and accumulated a fair amount of equity along the way.

When you buy and sell often, and keep an eye on the market, you begin to identify market trends. Earlier this year we looked around and noticed our housing market was valued high, exceedingly high. We downsized our belongings and put the house on the market. The market was hot and trends said the market was about to change. We were kind of feeling another move ahead and didn’t want to be selling in a down-turned market so we called a realtor and stuck a sale sign in the front yard. We sold the house quickly and a month later the market had already dropped $5-$7 per square foot.

Today

As I share our story today we live in a 997 square foot two bedroom apartment, with two girls and a dog. I don’t know when we will buy another house. We aren’t even in the market or currently looking. Right now we’re at peace with where we are, with less stuff, and with no debt. It means we have the freedom to come and go as we please.

Money lessons

Recently, I heard debt and savings explained like this:

“When you borrow you’re bringing your future earnings into the present.”

“When you save you’re sending present income into your future.”

I agree. I have lived fully in both states of mind. When you bring future earnings in to purchase today’s stuff it creates doubt, uncertainty, and risk. It also strains your relationships.

When you save you send present income into your future. Doing so is a barrier against stress and anxiety. It creates margin, leaves breathing room, and offers peace.

Health of money and health of body aren’t really different. When you live in health you experience the ability to move, whether across a field or across the globe.

Better health = more freedom.

The power is in your hands. How will you interact with money?

Given a choice, I choose less stuff and more freedom. 

What’s your choice? Share your answer in the comments. 

*Originally published as a contributor to Thrive Global. 

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