When I was seven years old, my family lived a few blocks from a beach resort. This was the kind of beach where rich northerners would spend their summer mornings meticulously constructing a small village of fancy tents only to place their beach chairs in the sun, thus cooking their skin into a crisp, vacationy red color. We called them the lobsters.
My dad thought it would be helpful to teach me about life by starting a business selling soft drinks to the lobsters. He gave me $50 in starting capital and we went to our local warehouse and bought a bunch of soft drinks. I got to pick the drinks we bought, and always bought name brand so I could sip some inventory while I was out selling on the beach. Each can cost about $0.25 and I was selling them for $0.50.
The first time I went out onto the beach, lugging a big cart of drinks over the sand, I was petrified. I would walk up to complete strangers and ask if they wanted a drink in the way only a seven-year-old can. In those days, ladies still brought purses full of loose change to the beach, since no one had invented cell phones that could pay for things. Those same ladies thought a seven-year-old boy dragging a cart twice his size with cold-ish soft drinks was adorable so they would pull out their purse and unload all of their change into my hands.
In reality, I went out four times before the combined inertia of summer heat and childish embarrassment took over but the impression was made. I enjoyed making money.
Fast forward a few years and I got my first big job at a restaurant famous for selling chicken and seeming Christian about it. My first paycheck was $128 in exchange for 22 hours of washing ketchup off of trays and sweeping french fry crumbs out of the playground. It wasn’t glamorous but I was proud to do it. Finally, I would have a steady paycheck and like most teenagers with too much disposable income, I bought lots and lots of milkshakes. I knew I was supposed to give to the church and plan for the future but my teenage brain wanted treats, so most of my money was immediately converted to dairy before it had a chance to accumulate.
Once I got to college, even having worked over 2000 hours during high school, I had almost nothing left to show for it. I remember meeting a friend who had saved a few thousand dollars in his checking account as a freshman in college and wondering how anyone could save so much money by the age of 18. Toward the end of college, I wrote a few checks that didn’t get cashed immediately and ended up spending more than I had available. I got a call from my dad saying the bank had called him, and I had overdrafted several times to the tune of a few hundred dollars. He called the bank and got most of the overages canceled but reality was setting in – I was broke. In the four years between finishing college and getting married to Molly, my income increased, my expenses increased, and my habits stayed the same. Almost every dollar I had would be spent.
When Molly and I got married, we had $107,000 in student debt to pay off. We knew we wanted to pay it off as quickly as possible, because the payment on the loan was high and we wanted to eventually have a child. Our habits had to change in order to get out of the hole. We gave our student loans a name - we called them “Ghengis” after the famous marauder Ghengis Khan – because it was easier for me to be excited about killing Ghengis Khan than “paying extra on the loan.”
“Ghengis” was supposed to last ten years, but we were able to pay it off in three years by the grace of God and a lot of focused effort. This meant we lived in a modest house and drove cars which were worth about $1,500 each for the entire three years. But paying it off early would mean we could save tens of thousands of dollars in interest, as well as enjoy the flexibility that comes from not having a loan payment.
Paying off the loan early was a huge accomplishment for us, and helped establish our early habits as a married couple. We had a budget which we used on a regular basis to help inform our spending decisions.
But our story doesn’t end on a mountain top of victorious wealth. I wish I could say that we kept up our budget as a big part of our financial life after paying off the loan, but we didn’t. We saved up for a down payment on a house, had a child, and promptly lost our budgeting habit. In the two years since our son was born, we haven’t kept up with a regular budget.
The truth is that we have learned a lot about making thoughtful choices with money, maintaining a healthy budget, and paying off massive amounts of debt. I’m blessed to have been to business school and learned a lot about assets and management from some wonderful professors and some excellent books. But at the same time, we still struggle to plan for the future. Our spending is out of control in the sense that I don’t know how much we spend in a given month. Over the past few years, I’ve noticed worry has crept into my mentality. Even though we make enough money to cover our expenses, I still find myself checking the balance in our bank account as a source of emotional relief that “we still have enough.”
The advice in this book is for me as much as anyone else and there are entire chapters which we are still trying to implement, today. The simplified budget described in How to Make a Budget comes from my desire to build a budget we actually use. I wrote a chapter called The Habits as a means of figuring out what our habits should be. I have avoided making a will and buying life insurance because thinking about my own death is generally something I try to avoid. I’m not some financial guru who is coming down from the mountain with a perfect plan written on stone tablets. This stuff is hard.
I’m writing this book because I want to build a robust plan for money management so we never worry about the balance in our checking account. I want to honor God by being extraordinarily generous. I want to plan for the long-term. Soon we will be teaching our child about money and we hope to give him proven lessons and tools so he is more equipped than we were to make decisions.
If you want those things too, I hope you’ll keep reading.