Tuesday, September 2, 2008

Personal Responsibility

Some days I have a hard time understanding what has happened to people in our society. Everywhere you look people are trying to blame someone else for their problems. Their car gets repossessed, it's the car dealer's fault. They lose their house, it's the mortgage company's fault. When does it become their own fault, because they bought more than they could afford?

About 7 years ago we bought our first home. I remember when we started looking, almost a year before we actually bought. We put earnest money down on a brand new house, that we would wait to have built. We were young ( 21), and stupid in the area of real estate. We put the money down because it was a house we really loved, in a great area, close to work, new development, just everything we wanted, and the guy at the model home calculated our payment, and we thought it was reasonable. When we went over to the mortgage company and started the paperwork, the payment they quoted us was around $300 more. We didn't have our realtor with us, and it made us uneasy about signing the papers, so we walked out. In the process we lost our earnest money, which I'm sure we should have gotten back, but again, we were uninformed. At least we knew what we could afford.

Eleven months later we finally bought our house. When we went to get pre-approved for the mortgage, they approved us for somewhere around 40% more than what we actually paid. We could have bought a house that expensive, but we bought what we could comfortably live with.

After we bought our house we got stupid again. Pretty soon we had a house full of furniture, tools in the garage, and a second mortgage. According to everyone we knew we were "normal". All it took for us to be in trouble was one month of Seth not working. He didn't have his own route yet, and as a sub, the summers get really slow. Normally we would have been able to still survive on one paycheck, but this one month Murphy came to visit us, and never left. We had gotten a letter from our mortgage company telling us about their mortgage accelerator program. You've probably heard of those. It sounded good, split up your mortgage payment, have it automatically withdrawn every 2 weeks on payday, and you get an extra payment a year. Why wouldn't anyone do that?

Unlucky for us, we missed something in the fine print. That something was the fact that we would have to pay a full mortgage payment on the 1st of September, and then 2 weeks later, start with the half payments. So basically we had 2 mortgage payments in one month. The same month that Seth wound up not working at all because they didn't have him scheduled and never called him in. What do you get when you're short 2 full paychecks in one month, you have 2 mortgage payments, a second mortgage, 2 car payments, and a few credit cards? You get behind. In a way that you can't get caught up. You feel as if you're drowning, they're calling you every day asking you where your payments are, and you're wondering if you're going to have any money to eat until the next payday because you have paid as many people as possible and only left yourself a minimal amount to eat on.

We wouldn't ask our families for help. We wouldn't file bankruptcy, because we got our selves into it, we should get ourselves out. We knew of people who had done a credit counselling thing, so we figured we'd go that route, to at least get some relief on the payments. It helped. We sold a couple of things (my parents bought our 4 wheeler, thanks guys). Then we got lazy and just started "getting by".

Our wake up call was when we had Hunter. We have pretty much always carpooled since we work together and we lived 20 miles from work (and when you're broke you don't have money to burn on gas, even at $1.50 a gallon). We were talking about our money situation on the way home from work one day when Seth decided to look for this radio show he used to listen to, back when we still lived in our apartment and he drove by himself. He found it, we listened, and I was hooked...we both were. The show was called the Dave Ramsey Show.

We started on the plan within the first couple of weeks of listening. It doesn't cost you a penny. It's all about living on a budget, having a plan, paying off your debts (smallest to largest, not about interest rates), and becoming completely debt free. It was the coolest time for us. I remember how our relationship changed. I used to feel like I should hide how much money I spent on stuff. On this plan, I didn't have to feel that way because we had a budget. To make a really long story a lot shorter, it was the best thing we've ever done. Period. Debt free is really close to stress free. (yes, we have one car payment now, in addition to our mortgage, and I'm a little freaked out about that, but we have a plan to have that baby paid off really soon.)

One of the things you will hear Dave talk about on his show is books. He also has some of his author friends on the show once in a while. One of those books is called QBQ: The Question Behind the Question by John Miller. This is one of those books that make you think "Exactly!", and "Oh, I know who needs to read this book". Right now I can think of way too many people who need to read this book. I know the economy is crap right now. I know people have problems, but I'm really starting to get a little tired of hearing people blame everyone but themselves for their problems.

I read that book QBQ, and it was a little confusing for me at first. I feel like my boss should have everyone at work read it. But I also wasn't sure how it all fit within the union contract and all that. In a way I feel like I should just do anything anyone asks of me. Where do you draw a line? I am paid by a sort of salary, in which there are things I get paid to do and things I'm not paid to do. It's a daily struggle, "they"(management) ask "us" (the employees) to do something, we refuse because "I don't get paid for that", is there a bigger cop out? Shouldn't you just do it because they ask? The answer is no.

There are too many people out there saying that all of this economy stuff is the lenders fault. It's the payday loan place that got them into trouble. I've never heard of payday loan places forcing you to walk through their door (and that is not a point for them, it just means that if you go there, it was your choice.)

It doesn't matter how much money you make. Look at Ed McMahon in danger of foreclosure. In his interview with Larry King, he said the exact bottom line, "Well, if you spend more than you make, you know what happens." Just because you make a lot of money doesn't mean you manage it better than someone who makes what the average household income does. So, it's not about how much you make, it's all about how you manage it. Dave Ramsey has it all figured out. He learned first hand from experience, and he goes on the radio every day to try to help prevent people from going through the exact same thing he did.

I may still have times when I ask myself the wrong questions, but most of the time I try to ask myself the right questions. If you're looking for a great, quick, easy nonfiction book, go borrow QBQ by John Miller from the library, you won't be sorry.


  1. I agree that it is pretty awful how quickly people will try and put the blame on someone/something else. Although it can be hard to say 'I stuffed up', or 'I am sorry', it is definitely the right thing to do.

    I applaud you and your hubby getting yourselves out of the financial dip you had gotten into. I can only imagine how proud you guys must be of your personal achievement.

  2. I've been curious about DR, too. We are lukcy, though...no debt (except mortgage and student loans), so I don't know if it would help...but I wondered what his premise was.

    I am with you 200% about the blame game. And, it starts at such an early age. Even in high school, kids want to blame everybody but themselves. It's ridiculous.

  3. I love Dave Ramsey! Congrats for being debt free, too. That's awesome!

    I am so annoyed by everyone who has to blame someone else for their decisions. Seriously. I couldn't agree more with your post!

  4. Goodness if you make stupid decisions you have nobody to blame but yourself.

    I need to check our Dave Ramsey I know you have mentioned him before.

  5. My husband and I took Dave Ramsey's Financial Peace University class about a year ago. It's fabulous! Our credit cards are GONE - we just have a couple of TSP loans and our mortgage left!

    Dave totally ROCKS! It's the ONLY way to live without worry! I'll have to see if I can find that other book too! Thanks for sharing! :)

  6. I agree 100% with everything you said. This is a great post.

  7. Dave Ramsey is one of the smartest guys out there. Love love love the man.

    We haven't been gazelle intense lately, and we need to get back on track.

  8. I totally agree with this post! It is so frustrating to see people being bailed out of their mortgages when we chose to keep our tiny house instead of buying a bigger one in a nicer neighborhood because we made the financially responsible decision to not get in over our heads. I think the govt should reward people like us!

    On the flip side, I was told that the reason the govt is getting involved is because if the banks start getting into danger with all these foreclosures it could have a HUGE impact on the economy and everyone (including those not even involved) would suffer. I guess I can see that rationale but it still SO FRUSTRATING!!