not proud in numbers

the budget.png

i recently wrote on twitter about having figured out how much money we’re putting towards our debt - a whopping 45% of our net income. and then an additional 13% of our net income goes towards tithes and charity work. so essentially we’re living on only 42% of our net income.

a couple days later i got this message via twitter from our friend sarah johnson:
shocked that @abelara hasn’t replied to @lauraanna’s twitters. abe, your slipping. ;)

so what exactly did @lauraanna say?:
@abelara That’s great you’ll be debt free!

@abelara Although I don’t think it’s right to be proud of living on less when you don’t pay your own housing, food, medical expenses.

@abelara just a thought …

so then i replied to @sarahsdandelion:
@sarahsdandelion they musta slipped past me. i hadn’t seen/read them until you mentioned it. thanks for the heads up. :)

so now that i’ve given you a recap for those who don’t currently use twitter, (go ahead and sign up, i know you wanna.) or for those of you who use twitter but don’t follow either @sarahsdandelion or @lauraanna i’ll now commence with my reply to the thought about my pride and income.



[hmmm … should i be nice or mean in my reply? “nice” would be more civil and probably make my points more logical and persuasive. but “mean” is much funner to read and write. i’ll go for nice (sorry to disappoint you rabble rousers).]

i’ve made it no secret on this blog or elsewhere about our current income level, situation in life, or economic views. as a quick recap: our net income is ~$2800 - $3000 a month, we do receive food stamps, our kid’s medical is paid for (deb and i currently don’t have medical coverage), and we live in the parsonage of a church with rent and utilities paid.

and i will admit that it’s fun to spit out numbers and percentages of income we’re putting towards debt. especially when those numbers are skewed a little because initially i forgot to include our church pay. so when for the month of jan you take the $1335 we’re putting towards debt divided by $2200 then our percentage is something outrageous like 61%. but when you add in the church income that percentage drops to the 45% mentioned above.

all that said though @lauraanna’s comments got me to thinking about the motivation for me saying what i said. and what i’ve concluded is that what i’m “proud” of most isn’t the numbers, but our discipline and heart towards our money.

because the fact is that we’re still cutting back our lifestyle in order to give that $1335 a month to debt. i wouldn’t say i think about it every day, but at least every week i ponder, “deb, imagine if we were out of debt right now, what would we do with an extra $1000+ a month!” some things that have crossed my mind a Wii, a big screen LCD TV, a cruise vacation, eat out more often, new clothes more often, nicer cars, etc., etc., etc.

and in reality our minimum payments on our loans are about $200. so technically we could have much more discretionary funds to spend. and in reality there are thousands (dare i say millions) of americans who are doing just that. paying the minimums on their debts and spending all the rest and then putting even more on credit.

regardless of how you may feel about our current economic status. the government would still give us food stamps regardless of whether we’re putting a big chunk of our money towards debt or spending it on TV. (btw, the amount they give us for food stamps doesn’t always cover all of our food for our family for the month; we do have to include in our budget some actual cash) and based on our current income level the government would still pay for out children’s medical expenses regardless of how we spend the income that we are required to report to them on a regular basis. and our church would still allow us to live in the parsonage rent and utility free regardless of how we spent our money.

does your job do an audit of your spending and then pay your salary depending on whether or not they deem it to be wisely spent? if you had an extra $1000/month added to your salary what would you do with it? (after reading this it’s easy to think/say you’d be responsible and put it towards your debts or savings. it’s another thing entirely when the money’s actually in your hand or in your checking account balance.)

it’s also nice to think that we don’t have any car payments, no credit card debt, and $700 in savings just for emergencies. so even if the government were to send us a letter tomorrow and say “we’re cutting all those programs you depend on. next month no food stamps or medical coverage for your kids”, we wouldn’t be freaking out. we’ve got “margin” in our lives. and the same thing for the church housing. if they were to sell the house or need to start charging us rent, we wouldn’t be living beyond our means to do so.

we would have to scale back the time frame it would take us to pay off our debt.

as a wise man once suggested, “we’re living like no one else, so later we can live like no one else.” (email, twitter, or call me if you need an explanation of that quote.)

so, yes, although numbers like 45% and $1335/month are splashy and spit out there primarily for “shock value”; that’s not what we’re proud of. we’re proud that we’ve made a commitment to live within our means, pay off our debts, and give generously.

i’d love to hear your feedback on this issue. whether you agree or disagree, sound off in the comments. has any of what i shared struck a chord with how you’re managing your finances? i’d love to share some more on how deb and i do our budgeting or point you towards good financial teaching so that you can begin your own road to financial freedom.