Financial Boundaries: The Jackson Bailout Plan
Published: June 12, 2009
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Once upon a time I wanted to kill myself.
Seriously.
I was 19…maybe 20 years old…and had an amazing life. I was earning a ton of money working at a trendy dot.com in Dallas, living in a fabulous Dallas studio over a nightclub, driving a new Mustang convertible, had a personal shopping assistant at Nordstrom (who knew my name, my size, my style, and I’d go in once a week to get what he thought was new and best for me). When the dot.com went public, my earnings would go into six figures (it never went public, by the way) and well, everything seemed to rock.
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Except I was over $40,000 in debt.
I couldn’t pay my bills.
And as I drove to my nifty little loft I looked at the parking garage and wondered if it was high enough to kill me if I jumped.
No joke.
So that was ten years ago.
Five years ago, things looked a little better. Chris and I were newlyweds. I had paid off most of my debt…well, 75% of it anyway. We bought some new fancy furniture for our new fancy apartment because we wanted to keep up with the Pottery Barn lifestyle of the suburbs of Johnson County, Kansas. So we added a few thousand more bucks to the pool of debt.
And we couldn’t pay our bills.
And we’d take out payday loans to get us by.
(Don’t ever, EVER do that.)
So that was five years ago.
Three years ago, after having an expensive gall bladder surgery (which carried a hefty price tag of $12k) we sought help from a financial counselor. We negotiated all of our credit card interest rates. We chopped them all up except for two, $300 cards only to be used in emergencies (and to keep a credit line open which is actually good for your credit score). We saved. For the first time in a long time we tithed. We still screwed up. We still took out pay day loans. But it was getting better.
So that was three years ago.
One year ago, we paid off all of our credit cards. We only have a couple thousand left in medical bills. We still have two stupid car payments, but we will drive these cars until they rot.
In the last year, we’ve made decisions that have cut our monthly expenses almost in half. Here are some (not all) of the things we’ve done. And keep in mind…this wasn’t an overnight flip (although some of them were). We prayed, begged, negotiated, bartered and we still will continue to ask how we can better manage our finances.
- DOWNSIZING! We’re moving in June from West Nashville to Franklin (a southern suburb of Nashville)…our friends own a cottage that they are leasing to us for a more than reasonable rate. It’s small. It’s 800 square feet. It has one bedroom. It has one bathroom. We’re losing a basement, a garage, an office, and a half bath. But we are gaining a good $300/month in housing expenses because of paying less for rent, having less square footage to heat and cool, and we don’t have to rent any appliances. (Oh, and 800 sq ft forces one to declutter. I hate clutter. We moved in with 35 boxes of stuff (and I realize that isn’t a lot). It’s my goal to move out with 25 boxes. Or less.)
- EATING OUT! We limit our eating out to one meal a week (of each). One coffee, one lunch, one dinner. Sometimes we share. And we always have leftovers. This saves us about $300/month from our typical habits. It adds up.
- NO SHOWTIME! We cut our cable plan to basic cable. This saves us about $50/month.
- HELLO? No home telephone. $30/month.
- WIFI NOWHERES! We used to have a wireless card. We don’t anymore. $30/month.
- GEICO GECKO! Shopped our car insurance. Saved $150/month.
- CUT THE CARDS! Did I mention no credit cards? Saved $600/month.
- CUT THE FAT! We don’t buy much junk food. Saved $100/month. And love handles.
- SHOP THE CELL! Upcoming in December: I’m moving to Sprint and getting a Blackberry. $20/month savings over my iPhone.
Total Cutbacks: $1580/month…$18,960/year
It’s not just about cutting back, it’s about managing the money we do have better. How is that money better invested?
- THE CHURCH! Kingdom resources. We are more free to give more and more often and in more places.
- COMPASSION! We are sponsoring three kids. Soon to be four.
- LIFE INSURANCE! I don’t care who you are or how old you are - GET LIFE INSURANCE. Chris and I have ridiculous amounts of coverage for about $30/month. If one of us happened to get hit by a bus, the other one would be taken care of for life.
- SAVINGS! We don’t have a ton, and call me stupid but I don’t think we need a ton. Having an emergency fund is helpful, but we don’t keep this fund super huge. There are needs right in front of us…so we try to not worry about the “what if.” God’s proven faithful. We hope to do the same.
So…a few of you have asked, and here is your long answer. Yes, we budget. Yes we have spreadsheets. Yes, we talk about our money all the time. We talk about purchases no matter how big or small. Communication is key for us. Being on the same page is key for us.
And I have to say the freedom it brings is…amazing!!!!
Anne Jackson serves on staff at Cross Point Church in Nashville, Tennessee. Her articles have been published in a variety of print and online magazines, and her blog, Flowerdust.net, is ranked as one of the top blogs in Christian Leadership with hundreds of thousands of pageviews a month. She is an advocate for Compassion International, a down-to-earth communicator, and an all around dreamer. Anne has an unwavering passion to see the Church grow, thrive, and fulfill its purpose. Her book Mad Church Disease (Zondervan), February 2009.
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