Surviving Debt - Part 2: "...The One Car Family..."

If you didn't catch Part 1 of this series check it out here

If you recall from Part 1, we have just started our Total Money Makeover.  It is June 2009, we are flat broke spending somewhere between $600-$1000 per month more than our income and somewhere in the neighborhood of $50,000 in debt.  Let me rephrase that just to make sure you didn't miss anything here, financially we are up a creek without a paddle.  This is no ordinary creek either, it's a Mississippi River sized creek with a whole lot more pp's in it than you see at first glance.

We had just acquired a pair of golden handcuffs as I borrowed $9,000 on my 401(k) in an attempt to borrow our way out of debt.  Everyone knows the best time to go into debt is when you're in a financial crunch.   And when you're in a financial crunch that's the absolute best time to essentially lock yourself into your job or face a large loan payment being due, or a heavy tax bill for early withdraw on retirement.   Oh, I digress, we were there and I can't change that now.

A funny thing happened at this point, we stopped for a moment and decided we should plan out how we were going to best utilize the 401k loan.  As a moment of full disclosure, if you asked me today if you should borrow on retirement, or if I would do the same thing again, I would say, "Absolutely not!" Without hesitation, I would recommend you not travel this path.  Had I the clarity then that I do now, we would not have cashed the 401k loan check, we would have sent it back and canceled the loan.  Again, I digress, we cashed that check, and in our situation it probably worked out better than it should have.

We needed a vehicle, pronto.  I was now an expert on beaters, you know, a garage sale car.  I had read Dave's book and listened to him on the radio and seriously, aren't all cars less than about 3 grand a piece of junk anyway?  So, we quickly located and found a car that seemed like it would work.  We got a STEAL of a deal.  And by steal I mean, we were stolen from.  Not really, but eventually that's the way it felt.  On July 12, 2009, we bought our beater, a 1998 Volvo V70 station wagon with 209,234 miles.  We paid $2000 cash, literally cash, for the car.  I didn't mind driving it, but it certainly wasn't a head-turner.  Here, have a look.

The big mistake we made is we didn't have it checked out first.  So, for the next 4 months we watched it slowly fall apart.  First, one of the back windows wouldn't roll down.  Next the other back door wouldn't open from the inside.  Then, it needed the coolant filled at least once on a roundtrip to work.  Then, I don't know, make something up, it doesn't matter, over the Thanksgiving weekend in a puff of white smoke, literally, the head gasket blew and she was done for.  We held onto that car for another 2 months and sold it January 17, 2010 to a local body shop to use for parts.  We got $500 for it when we sold it.

Think about that.  We bought the beater for $2000 and sold it for $500 after driving it for 4 months.  That's $1500 for 4 months.  While it isn't exactly a nice car or great deal, $375/month is essentially a car payment so it wasn't a totally bad deal, and it kept us from continuing to accumulate miles on the VW Passat that was coming due on it's lease.  In October we had turned in the Passat, and with the mileage overages we had accumulated, we owed $5232.26 at lease termination.

That Thanksgiving marked the start of a totally new era for us, the era of having a single car.  Another full disclosure here, I also owned, and by owned I mean had a loan on, a motorcycle.  So while we really did only have one car, I did use the motorcycle for my work commute when the weather was acceptable.

How to you operate a family of 4 on a single car?  Easy,  the same way my parents did.  You carpool, plan your schedule, communicate on who needs to go where and when.  Was it a challenge?  Sure.  Was it easy?  Nope.  Is it possible?  Absolutely!   Suzanne and I lived the single car family life for 3 years and don't regret it, not one bit.

Damn, we still need a car...  The lease on our Acura TL was coming due in March.  With our Total Money Makeover well underway we were forced with a dilema.  What do we do about a car?  We had a really bad taste in our mouth about getting a beater (again), but had committed to quit borrowing money.   By March 2010 our credit was so far gone borrowing wasn't even really a choice.  However; we had managed to clear a LOT of debt so we had income to cover the bills.  With this in mind, we borrowed a few thousand dollars from an individual and moved them to the top of our repayment list.  That vehicle was a little more than a beater, for $7750 we purchased our 2007 Saturn Vue with 91,325 miles on it on March 8, 2010.  This vehicle was paid for in a combination of cash and direct bank transfer.  Again, no lien on the title, but we did have a unsecured personal loan with an individual.

This ends the saga of our vehicles during our Total Money Makeover.   I didn't expect this post to be entirely about cars, but once headed that road, I figured I might as well continue.  In Part 3 of Surviving Debt I will back track a little bit and take you on the road with us as we started our Total Money Makeover and started attacking our debts and getting our financial life back in order.

Surviving Debt - Part 1: From the Depths of Debt and Despair

Just six weeks ago we welcomed into the world our precious son.  If you have children you likely know that "top of the world" feeling of that special day.  But how on earth did I end up here?  Today started like any other Monday, we woke up got ready for work and got our three and a half year old daughter ready for daycare.  The baby was clothed and fed and we headed out the door.  The difference here was that we didn't go to work on this Monday, after dropping our daughter off at daycare we headed to an attorney's office.

I had spent the previous Thursday night filling out what seemed to be an endless questionare in preparation for our Monday morning appointment.  As we sat in the lobby of the office with our six week old son, we read over the framed posters on the wall that displayed the names of numerous celebraties and famous persons that had also traveled the path we were on.  Finally after an eternity of sitting in shame, we were called back to discuss our bankruptcy case with a paralegal.

I'll be honest, I don't remember much from the appointment other than feeling like a complete and total failure.  I kept wondering, how did we get here?  How could I have been so stupid?  Looking back on this, the answers to my questions were simple.  It came down to simple math.  We spent way more than we made, and we did that for a long time.  Walking out of that office we felt defeated, but at least we came to grips with the seriousness of our situation.


At the time we weren't behind on any bills, but we would be soon and very soon.  All our credit cards and lines of credit were maxed out, there was no money left for us to borrow.  For the first time we actually wrote out our expenses and compared them with our income.  Come to find out that we were spending about $1600 per month more than we made.  No wonder we were in the spot we were in.


About a week after our meeting we received the quote for the cost to file our Chapter 7 bankruptcy.  It was only going to cost us $2939 to free ourselves from the debt we'd acquired.  At the time, we were thinking we were in about $50,000 worth of debt.  For just under $3K that would be discharged, we'd keep the house, both leased cars, and my motorcycle.  This seemed like a plan, but we were still in trouble.  Later that month, we missed our first of several payments.

This was November of 2008.  We stopped making payments on nearly all of our unsecured debt and this resulted in about $1000 less in expenses per month.  Now we still had a $600 per month burn rate.  I'm not sure what happened or how we survived, but we did.  We cruised along trying to figure out a way to obtain $3000 to file bankruptcy and get out of this mess.

In March of 2009 I received my annual bonus which was a net take home of $4100.  Yes!  This was it, we could finally afford to file Chapter 7!  First things first, vacation time.  See, my dad had been battling cancer and we hadn't seen him in awhile, and he had never met his only grandson, our now six month old son.  So we traveled to Texas and visited with friends and family.  If you think we'd obtained the discipline at this point to budget a trip and not spend too much, well you are wrong.  So we spent that bonus money down below the $3000 we needed for our filing.

And the hits just keep on coming.  We were back in the mode of trying to save a few bucks, or a few hundred.  But, life doesn't wait, nor does death.  About a month after our visit to Texas my Grandfather passed away, so we headed back to Texas again.  This last trip pretty much cleared us out and we were again broke.  Bankruptcy seemed like a far fetched dream at this point.

And when it couldn't get any worse.  Life, or death rather, comes around again.  Another month had passed and my Grandmother passed away.  We were too broke to attend the service.  This was really a breaking point in our life, May 2009.  For another month, we lived in limbo.  I had been listening, off and on, to The Clark Howard Show on my local AM station, but they had recently replaced it with a show called, The Dave Ramsey Show.  I was upset because I enjoyed listening to Clark teach me how to "Save more, spend less, and avoid getting ripped-off".  Eventually this Dave character started making some sense.  I liked what he was saying and heard mention of his book several times.  So, in June I ordered Dave Ramsey's My Total Money Makeover from Amazon and started reading.  

I loved the plan, I loved the ideas,  it was like he stole them straight from my grandparents!  Spend less than you make, save up and pay cash for things, and basically don't be stupid.  I was excited.

The financial goal at this point was to try to arrange transportation.  We had about 4 months left on one car lease and 9 months left on the other.  We had already taken a 401k loan on my retirement so we were about to have some liquid assets to purchase a car.   But then I decided that silly ole' Dave's plan was probably better than ours.  I mean, how well had our plans been working?  Really.

Husbands, don't do the following, I was lucky, and I don't think your result will be similar.  Suzanne and I were talking about the cars and what to do when I said something like, "Naw, we should use the money to buy a beater, like a $2000 car."  "What?!?! Are you crazy!?!? We can't go from driving an Acura TL and a Volkswagen Passat to a $2000 beater!"  (ok, those weren't her words, but that's what I heard).

From there is was a little blurry, but it was essentially me tossing the Total Money Makeover book on the floor in front of her, she was already sitting on the floor, and declaring this book to be the source of my madness.  "Talk to me again after you've read this! (or at least through Chapter 4 (or whatever the chapter on getting out of debt is))"  And so it was...

Over the next couple of days, she read.  I waited.  I waited some more, and then gently asked, "so?"  And I waited some more.  Ok, it was probably only a couple days until she reached a point we could have a conversation of mutual understanding.  We figured what the heck, what have we got to loose?

June 2009, we started our Total Money Makeover.

... Stay tuned for part 2 as we start the baby steps ...

What was the point at which you realized the pain of the same was more than that of the pain of change?  In other words, what was your "I've had it!" moment?

Spontaneous Moments of Thankfulness

I've found from time to time that just sitting back and witnessing an event will trigger spontaneous moments of thankfulness.  Society in general is, in my opinion, not nearly as grateful as we could be.  We take for granted the things in everyday life without much thought or reflection on how lucky we are.  We carry on in our lives without saying thank you, without acknowledging the sacrifices of others, without a care in the worlds except that which is passing through our head at that moment in time.  Lately, I've been overcome with emotion at seemingly random times and then filled with thankfulness for the situation.

Not too long ago I attended a baby shower for one of my wife's childhood friends.  Thankfully this wasn't a traditional baby shower where unhealthy amounts of estrogen and an equally unhealthy lack of testosterone rulled the party.  The party was primarily couples that had come to celebrate.  This would typically be an easy place to find things to be thankful for: babies, children, parents, etc.  But instead, it hit me as I ventured out to the car to put my phone on charge.  On the windshield of pretty much every car there was a sticker.  It was those stickers that brought on this surge of feelings.  The stickers were all U.S. Government stickers, Department of Defense more specifically.  Even more specific than that they were all issued to identify the drivers of the vehicles were allowed access to Camp Lejune, the US Marine Corp base nearby.  I realized we were some of the only non-marines in attendance.  Furthermore, the baby shower wasn't just a baby shower, it was of sorts a deployment party for several of those in attendance, including the father-to-be.  He is scheduled for deployment a mere two weeks after he welcomes his son into the world.  That hit me and made me think about just how thankful I am for those that sacrifice so much to defend my freedom and to bring democracy across the globe.

To the men and women serving this great nation, I thank you for all that you do.  I thank you for your service to this country, I thank you for the sacrifices you make for strangers.  I thank the husbands, wives, and children here at home that lend their loved ones to our nation.  I say thank you to those that have given their lives and to those they have left behind, I behalf of a grateful citizen, I say thank you.

Finding God Exactly Where You Expect

For most of my life I've felt that God and I have been playing a game of hide and seek.  Sometimes it seems God is hiding from me, and other times I'm hiding from God.  We go back and forth like this, it's the nature of our relationship.   Earlier this summer I had the opportunity to attend Uno Camp at Camp Caroline with my 6 year old daughter.  Camp Caroline is nestled on the banks of Dawson's Creek right where it opens up to the Neuse River just upstream from the Pamlico Sound and the Atlantic Ocean.  This was my kiddo's first church camp and the first for me in many many years.

As a youth, I loved going to camp in the summer.  It was a time to see friends that I hadn't seen since the previous summer, a time to hang out with some grownups (aka counselors, aka just big kids) that I had come to admire, a time to ignite some summertime romance (even if it was just for a week), and mostly a time for fun.  Church Camp in Athens, Texas at Disciples Crossing, though we didn't call it that way back then, certainly holds a special place in my heart.  Among all the fun we worshiped, praised God, and learned to love Jesus together as we joined in fellowship.

In a place as tranquil and holy as either Disciples Crossing or Camp Caroline you just get that feeling that God is there with you.  Guess what?  You're right!  That, my friends, was the highlight of my overnight trip to Uno Camp.  I went so that my daughter could experience camp, like I and many of my friends did, so that she too could grow closer to Christ, and also so that she, quite selfish of me I must admit, could be comfortable with the camp so that next year we could send her away for the weekend.  What I personally expected was to go and have some fun and maybe see if I could find God lurking around there somewhere.  What I walked away with was truly a surprise to me.

I'll just get right to the point here.  For years, I've looked for God to be hiding, to be lurking around the corner, to be whispering to me in that "still, small voice."  I've hidden from God and been distant so that our Almighty Creator wouldn't know the sin I was participating in.  What hit me that weekend was that sometimes, more often than we realize really, God is exactly where you would expect!    It kinda hit me in the face like, "Wake up, I'm right here in  your face!" while I was standing there in admiration observing the beautiful sun set behind the calm flowing waters of Dawson's creek.  Standing in front of the water was a tall wooden cross that towered above the stone worship table.  On the front of the table the words "This Do In Rememberance of Me" and to top off this scene of Glory was my beautiful daughter standing at the table, reminding me that I was lead to this place, to see this beauty and divine creation, by the hand of a child.

Yes, sometimes you don't have to go looking for God, sometimes we just need to open our eyes and look, we'll see that God is right there ready to smack us in the face.  Pay attention!

Peace be with you as you find God exactly where you'd expect.

The Silent Crowd

One of the most difficult things about blogging is getting started.  You start with an idea or concept, or maybe you just start for no specific reason.  For me, the first obstacle is always the title.  Especially on a site like blogger where you find that your great idea wasn't that great after all, so you must hunt and hunt for a new URL that isn't taken.

Getting past title and URL hunting there's the somewhat uncomfortable first post.  I've seen plenty of "Welcome" and "This is my first post" type entries.  I think in order to bring substance you must say more that that.  A first post should state your purpose and drive for what is motivating you.  You must say something that readers will like and want to come back to check you out again.  This is the second obstacle, but not one that leads the blog to death prior to conception.

For me personally, the most challenging thing about a first post is the audience.  It's a tough crowd.  This is really what make me uncomfortable about blogging.  You never really know who's reading, but with the first post you do know who's NOT reading.  That would be everyone.  So, all that to say, the first post is hard for me because there are no readers, and that makes me uncomfortable.

This brings me right to the point and purpose of starting yet another blog.  I wanted to do something that made me a little uncomfortable, something that forces me to step outside my normal day to day life, and step up to the opportunities in life that are out there.  I hope to use this medium to inspire and encourage you to do things that challenge you and challenge your comforts.  I believe that when we break out of our comfort zone a little it can lead to great things, big things, and things that actually matter and make a difference to those around us.  I'm talking about changing lives.  Perhaps it will only be my life that is changed, but that seems like a pretty good place to start because when all things are considered, the only person I have complete control over is me.

So, I lay out my challenge to you.  Journey with me, share your stories as I share mine.  Together, let's break out of our mold of comfort and do things that are bigger than we are.

What have you done today that is bigger than you?