10 years ago, my wife and I completed Financial Peace University. Up until this time, our pattern was to live paycheck to paycheck and to instantly gratify ourselves with “no interest” revolving credit with the goal of paying it off before the interest kicked in. Needless to say, that never happened. The furniture we purchased wore out long before the debt. In addition, we financed cars and TV sets and whatever else we weren’t willing to wait on. We never saved. When we tried to save money, we always took it right back out before the month was up. The worst of all our attempts at savings was when we cashed out an IRA hat I had from a previous employer.  I was unemployed for 8 months and thought this was the right decision at the time, in spite of the 10% penalty and ensuing taxes which, you guessed it, couldn’t afford to pay at tax time.

So when we went through FPU, we were enlightened. We were able to complete baby step 1 by saving a thousand dollars and we were on our way. Except, we weren’t.  We loved the idea of having an emergency fund so much that we skipped baby step 2 and went to baby step 3. We “ished” it. The next 10 years seemed peaceful when things happened like home AC repairs, auto repairs and the like. We thought we were so smart. We would humble-brag about how great it was to have an emergency fund and not sweat it when Murphy showed up on our doorstep.

In addition to time-traveling to baby step 3, we also swore off credit cards (mostly) and paid off many of our debts when we sold our house and bought a new house 4 years ago. On top of all that, we were both contributing to our 401k and making more money. But worst of all, our Emergency Fund was also a slush fund. We had replaced making unnecessary credit purchases with unnecessary cash purchases. (Buying a stove to better color match the refrigerator is an emergency right?)

When you think about it, using your emergency fund to buy toys when you are not out of debt and not investing enough into retirement is basically credit isn’t it? Instead of borrowing from Citibank, you are borrowing from your future…check that…you’re STEALING from your future because you are taking funds that will never have the chance to experience compound interest. So, let me shoot down the myth of “borrowing from yourself” and call it what it really is. Stealing from yourself. Ouch!

To many, all of this sounds great! This would sound like financial peace to a lot of people, and truthfully it did to us. Except, it isn’t. In spite of all we were able to accomplish, we both turned 50 and realized we were far behind on our retirement savings. We were not able to do the recommended 15% contribution to our 401k because guess what? We were still in debt.

Now, we were blessed not to ever have exorbitant debt like student loans, “more house than we could afford”, or high end cars. But, we did have car loans, we did have a couple low balance credit cards, we did have a mortgage, we were only contributing half of what we should to our 401k, and we were not as generous as we wanted to be.

Finally, in February of this year, I rediscovered Dave Ramsey and the baby steps. Like a bolt of lightning I realized how much our “ish-ness” had cost us. If we had followed the steps 10 years ago, we would not only be out of debt already, we would have a lot more in our retirement accounts and I would not be stressing about age 65 and beyond so much.

A couple things that Dave pointed out that motivated me. First, we needed to halt our 401k contributions and use those funds to speed up the debt snowball. Secondly, we needed to apply any savings above $1000.00 we had toward our debt. You don’t know how difficult it was to do these two things. They seemed counter to everything I thought we should be doing which was saving money. But, I realized, the only financial peace to be had would come by following the steps…in the order they were meant to be followed. There was a reason for this and our experience of the past 10 years proved us. Lesson learned.

Since my rediscovery of Dave Ramsey, we have paid off 2 credit cards and a car loan. Currently, we are on pace to pay off our 2017 Honda CRV (another poor decision made last summer) by the beginning of 2019.

Let me insert a side note here. The way we lived our financial life was normal. It is the way most people live their lives in our culture. Everything in our culture is instantaneous whether it be information, fast food, sexual pleasure, and sadly even religion. Our culture is bent away from reading lengthy books, prepping and cooking meals, courtship in pursuit of marriage, and intentional slow ordinary care of one’s own soul.

With everything I know from experience, a trap awaits us at the end of baby step 2. We could feel a false sense of peace having all of our non-mortgage debt paid off, but I know now this wouldn’t be true financial peace. Baby Step 3 will be to build that emergency fund of 3-6 months, and then we can finally increase our retirement contribution to the minimum 15% (baby step 4).

I would like to say we do everything perfect, but that would be untrue. We are still struggling to control our spending and tighten our budget. Changing 30 years of bad habits will take some time. Let our experience be an encouragement to you, not to do things the way we did it the last 30 years, or even the last 10 years because to do so would be to rob yourself of much more than retiring comfortably. It will rob of you the joy that comes from spontaneously helping others, obtaining contentment, and of course….financial peace.

P.S. and of course as Dave says, the only true Peace is to walk daily with the Prince of Peace, Christ Jesus.