When we set up our spreadsheet to examine our spending, we used categories like “Lunches,” “Gasoline,” “Groceries,” “Clothing,” “MBNA Mastercard from Hell,” “Providian Visa from Hell,” “Miscellaneous Household,” “Car Insurance,” “Life Insurance,” “Car Payment,” etc. We could see where our money was going during a two week period. As I mentioned, the results were disturbing. We were spending around three hundred dollars a month eating out at restaurants for lunch and dinner, several hundred dollars a month on the servicing of credit card debt, and we discovered a lot of money that was just going into thin air on Dr. Peppers and Mountain Dews that we purchased with gasoline and other frivolous items. All told, at least 25% of our income was being spent on essentially nothing. When we went to the grocery store, we just walked through picking up whatever we wanted at whatever price! We were just clueless.

Our first step was to start limiting our lunches to once a week and our dinners to once every two weeks. We also decided to discontinue expensive dinners at places like Outback Steakhouse or lunches at boutique joints downtown. This alone freed up a lot of money to shift over to paying down the worst debt – credit cards. Think about this: four lunches a month at $8.50 equals $34.00 per month and $408.00 per year.  Our credit cards ranged from 18% to 9% interest rates. We began paying these off aggressively, even using our Christmas bonuses and tax refunds to whittle the balances away. Since we worked in the same building at the time so we also began carpooling together in our car that got the best mileage. This led to some quality of life improvements. We listened to NPR or the news channel and discussed events. We decided to start eating in the office at lunch. We made sandwiches and ate leftovers from the new meals we were cooking. My husband lost about 10 lbs. just because he wasn’t eating Chinese buffets and fried chicken at lunch three or four times a week. Something thrilling happened in our new spreadsheet…

(Stay tuned for Part III)

My husband and I started our marriage in the middle of the desert, financially speaking. We had good incomes but spent like there was no tomorrow. We worked in the same building from the time we were dating and into the first several years of marriage so we met for lunch dates at good restaurants downtown. We both had car payments. We sent the kids to a good daycare and a private school for kindergarten. We had every channel on cable TV. We had at least 5 credit cards. We always paid the payments on time and put plenty of money into our 401(k) plans, but we were wastefully burning through our money with very little to show for it other than credit reports in the high 700’s. (We came to learn later that a credit report is a measurement of your success in paying interest on time. You can be broke and have a good credit score.) We had all the trappings of convenience and impatience that our society feasts upon: credit cards, car loans, student loans, store credit cards, magazine subscriptions, book clubs, and even a gym membership. We had the money to go on vacations. Despite a house payment of less than $500 a month, we weren’t making extra payments and we definitely weren’t saving any money. The picture is probably becoming clear to you now – we were like most middle class couples.

Something happened though. My husband started reading a little about personal finance and he started listening to Dave Ramsey’s radio show, which was on in Oklahoma City in the afternoons in the early 2000’s. We also happened to visit a local church during a sermon series on the biblical handling of money. We both knew right then that we had to make a change. We had a chat about it and decided to get serious.  We made a spreadsheet on our computer to track our spending. It wasn’t really a budget, but just seeing where the money was going on the computer screen was enough to give us both indigestion. Our money was going into a big toilet that didn’t do anybody any good. We had to make a change. We were making good money but we were spending all of our money and had no savings. We had nothing to show for our spending.