No Kool-Aid For Me, Thank You

Last week I wrote a Bottom Line post, sharing that our views on frugality had changed over the years. I received the following comment, which is what triggered the writing of this post:

"It's a hard balance and we are often not sure which is more important. Dave Ramsey would say sacrifice all to pay off your debt, but we think family and a low stress lifestyle (not working 2 jobs) are more important. I'd love to hear what you think about Ramsey's philosophy."

Let me start off by saying that I think Dave Ramsey has a lot of good advice. I love his down-to-earth, no nonsense way of telling-it-like-it-is to folks who need to hear the hard truth. I appreciate the fact that he had it all, lost it, and made it back (and more) in a healthier way. His advice of "doing what it takes" to reach your goals is one of the reasons that Peter started working more overtime, and I got a job as a pharmacy tech. We'd done pretty much all that we could on the outgoing side, so it was time to work on the income if we wanted to reach the goals that we set for ourselves. Dave's book came at a good time, and provided the encouragement and prompting that we needed.

 

{Image by jc7tray}

That being said, I haven't drunk the Dave Ramsey Kool-Aid. For example, he's very anti-credit cards...I, am not. I hold to the fact that self discipline has a lot to do with successfully managing your finances, and part of building that discipline includes not spending more than you make - whether you put it on a credit card or not. If I want to put a trip to Europe on my credit card, earning me points back or money for future Christmas shopping, as long as I pay it in full (because the money is already in my bank account to pay for the trip), I have no problem with putting it on plastic. 

Are there exceptions? Of course there are - on both sides! If you've paid off $35,000 worth of credit card debt, it might not be a good idea to open a new account - rather like inviting a recovering alcoholic to a bar. But my point is that it's a personal decision, based on on your track record. Not everyone who enjoys a glass of wine is a wino, and not all who pull out plastic to pay for dinner are in debt up to their eyeballs. 

As I've mentioned before, our goal for 2012 is to pay off the house, and the thought of being out from under our home loan is enough to make us both do the {happy dance}. First of all, we believe that being good stewards is Biblical (see Matt. 25:14-29), and everything we have belongs to the Lord - we're just caretakers and we need to be wise in using those resources. Secondly, we desire to be out from under the thumb of the lender because you never know when those rainy days will come  (Prov. 22:7 & 22:26-27), and if you owe no man anything, you can live on a whole lot less.

Also, by being free from monthly payments, we would able to use those resource for other things that we really want to do, like supporting a project overseas, sponsoring a child, planning a trip to Europe, or attending training for work or personal growth. The bottom line is that we don't like making payments. Our goal is to get to the point where we can have outstanding experiences (day trips, vacations, schooling) that are already paid for, thus making them more enjoyable because we don't have the threat of next months bills hanging over us.

There's one more aspect to this idea of personal responsibility and self discipline that I'd like to address, and it's something that people embrace less and less: delayed gratification. I'm all for buying quality over quantity and having experiences, but not if it means derailing our payoff plan. As long as we're on track to pay off our mortgage, then I have no problem shelling out money for a day trip or buying a high quality knife set. Sometimes, that means saying "No" to yourself, in favor of a larger goal. For example, last month we discussed buying a new chair for our library, but in the end, we stuck to our payoff plan and decided that we would wait a bit longer and make it a "No More Mortgage" gift to ourselves.

Sometimes it's easier to deny yourself something than it is to deny, say, your kids. There are lots of times when I've heard: "I want to give them the memories that I didn't have as a child" or "We were always so poor, I don't want my kids to go without." I believe that those people are doing a disservice to their children. What if, instead, you made memories that didn't involve money? It's possible - my family did. What if kids were taught that denying self isn't a bad thing, but by waiting and saving, they may end up with something better? What if you led by example? Rather than taking two years to pay off your so-so trip to Disney with your 3, 5, & 7 year old, why not work together as a family for those same two years and save cash (what you would have spent + 2 years of interest) for a dream Disney vacation when they are 5, 7, and 9? Kids mimic what they see at home, so teach them wisely - they're never too young to learn.

Bottom Line? I'm not against splurging - if I'm going to Europe, I'm going big - but splurging only works if you have the money in the bank to pay for it.  

Do you have anything you want to add?
What are your thoughts on credit cards vs. cash?