Recession-Proof Your Marriage – Step 10

Can you believe it?  We’re finally at step ten to creating and maintaining a recession-proof marriage.  When I kicked off this blog series with the article entitled Money, Money, Money, I only thought I’d be writing on this topic for a couple days.  And now several weeks later, there’s an entire plan to help you and your family kickstart your financial independence.

As you may already know, this is the first blog series on the Happy Wives Club and the first time I’ve ventured into the topic of finances.  But since it’s on everyone’s mind right now–-even the members of this Club–I thought I’d be remiss not to share with you what I’ve learned on my personal road to financial freedom. 

This article ends our 10-step series.  If you’ve missed any of the first nine steps, I encourage you to go back and review them: Step One, Steps Two and Three, Step Four, Step Five, Step Six, Step Seven, Step Eight and Step Nine.  For your ease, I’ve also included a brief synopsis of each step below.  

STEP ONE: Stop comparing yourself to others and learn to be content (or even better, happy) with exactly what you have in this moment.  As Rick Warren said and I love repeating, “If the grass is greener on the other side, that’s because your neighbor has a higher water bill!”

STEP TWO: Team up with your partner in life, your spouse, and pray for wisdom.  This is different from the prayers you may have prayed until now.  You’re not asking Him to magically make your debt disappear or magically increase your income.  You’re asking Him for the wisdom to allow you to do it yourself.  No one knows your financial future better than Him so that is the life source you want to stay connected to throughout this process and beyond.

STEP THREE: Strip down your image.  There is no doubt that a part of the instruction God will give you will require great sacrifice and that means you will need to be okay with whatever anyone else may think of you.  Don’t allow your fear of what others may think keep you straddled with the burden of debt.  It’s just not worth it.

STEP FOUR: The 10/90 Rule.  Many financial experts will tell you about the 80/10/10 rule and it is what Keith and I follow.  But I learned early in my adult life that the 80/10/10 was a goal but for those desiring to financial freedom, the 10/90 rule is a requirement.  It is what I used 15 years ago to turn my financial situation around and I’ve never met a person for whom it did not work.

STEP FIVE: Allowance isn’t just for kids.  You’ve probably discovered, like most people I know, that budgets are similar to New Year’s Resolutions: everyone makes them but few actually follow them (at least beyond the first month or two).  Budgets are usually blown but allowances are not.

STEP SIX: Redefine the American Dream.  This step begins the process of helping you pay off your debt and learn to live below your means.  Keeping up with the Joneses, Kardashians, Steins or anyone else is a recipe for failure.  Defining the American Dream for yourself is the key to success.

STEP SEVEN: Let stuff go.  Using the analogy of “how to catch a monkey” we’re reminded how our refusal to let some things go could cause us to remain in debt and not live the financially free life we were meant to enjoy.  And like the monkey, who is caught because of his refusal to let go of a booby-trapped treat, our decision to “let go” can change one’s life. 

STEP EIGHT: Workin’ 9-to-5 is a movie and an award-winning song, not the way to obtain financial freedom.  Get creative in coming up with ways to bring more income into your household.  Think outside the box and you’ll get to “recession-proof” much faster than you may think. 

STEP NINE: Rome wasn’t built in a day and neither was your financial situation.  Be patient and diligent as you begin this road to financial freedom.  Your reward will far outweigh your sacrifice.  What’s important is that you stay the course.  It won’t happen overnight but your road to financial freedom is just as much a part of the journey as the destination itself.  Make the most of it as a family and don’t lose focus. 

And the 10th and final step:

STEP TEN: Get comfortable with loss.

I know, I know, you were probably expecting me to end this series on a super high note that would cause you to run into the street, pump your fist in the air and scream, “Yes!  Yes!  Yes!”  Sorry if this step doesn’t make you do that but hopefully it will allow you to sink into your couch with a cup of tea and simply say to yourself, “Yes, got it…I can be okay with that.”

Here’s the deal, at the height of 06′, 07′ and 08′ when homes were selling at overinflated prices, money was cheap and obtaining a loan to buy a house, boat, complete a remodel or do whatever we could possibly hope or dream, a lot of us made poor financial decisions.  We decided to borrow more than we should have and now that this recession has really whacked us a hard one, it’s time to face some realities.

One of the greatest freedoms I’ve gained in my life is learning to be okay with loss.  Everything happens for a reason and many things we “own” are only for a season.  You and your family may complete steps 1-9 and still find you can’t get from under this financial cloud that’s been hovering over your home for the past few years (and for some, even longer).  What it will take for you may be to simply let stuff go.

What kind of things am I referencing?  Anything you’re holding onto that by keeping it is preventing you from joining us on the path to financial freedom.  There are many things and only you know what they are but something as simple as a FICO score can be what is preventing you from getting on the right path.  I love what Dave Ramsey says about FICO scores:

The dreaded FICO score.  It’s that number that’s associated with every credit report.  We all know about it—most people have one—but what does the credit score really mean?  Like it or not, your credit score is not an indicator of winning financially.  All it tells you is whether you are good at borrowing money and paying it back.  That’s it.

But let’s take a deeper look.  How is your FICO score determined?

35% of your score is based on your debt history.

30% is based on your debt level.

15% is based on the length of time you’ve been in debt.

10% is based on new debt.

10% is based on type of debt.

It’s the I-Love-Debt Score

Your FICE score is an I-love-debt-score, isn’t it?  Does it factor in your income—or, even better, your debt-to-income ratio?  Nope.  Does it factor in your savings accounts, net worth—anything other than debt?  Absolutely not.

The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly—without adding too much debt or paying too much off.  In other words, stay in debt for as long as you can.  How ridiculous is that?

I know this isn’t what we were taught.  It’s not what the previous generation told us about credit and the importance of maintaining a high credit score.  But it’s another fact of life we have to accept if we are going to move forward and out of debt.  If you plan on climbing out of debt, staying out of debt and ensuring you are not a “slave to the lender,” as the Proverb says, you may have to forego this score for now.  You won’t need it anyway.  The only way you need it is if you plan on borrowing and if I haven’t convinced you over the past few weeks that borrowing is what got the entire world into this big ole’ financial mess then I don’t know what more I can say.

But if I have been successful in convincing you that debt-free is the way to go,  I encourage you to find a plan and get started ASAP.  My favorite plan so far is Dave Ramsey’s Total Money Makeover but you can find a number of plans online for free.  Decide which plan works best for your family and don’t be afraid of loss.

You may have to lose in order to gain but in the end, what is peace of mind worth to you?  To me, it’s worth everything.

I hope this financial series has been helpful for you.  It has been amazing for us living through it.  Keith and I had to pay off well over $100,000 in debt in order to become debt-free (sans mortgages) and now we’re actively engaged in getting those paid off.  When we make a decision to have canned chicken salad or soup for dinner (which happens several times a week) instead of a nice steak dinner at our favorite restaurant, we know it is for a reason.  This is only a season and we don’t mind sacrificing now to get to our desired place later: 100% Recession-Proof.  Join us in this journey!

Until tomorrow…make it a great day!

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