For as long as I can remember I identified with Dave Ramsey’s no debt philosophy. I actually first started out in my personal money management journey with Crowne Financial, another biblically based foundation of debt and money. The modern equivalent of this is essentially Dave’s Financial Peace program.
I have always wanted to have a house and to pay it off early. That’s one of the steps in the financial freedom program. My wife and I, when we were married committed to no consumer debt and as little mortgage debt as we could handle. We both continued working and we worked to live on only my income so that we could be ready to make the shift into the possibility that we would have kids and she would stay home. In the mean time we used the dual income no kids to save for a house and then begin to pay it off as fast as possible. We had kids early on and then our speed was stunted some but we ended up still putting all extra money on the principal loan of the house.
There were definitely struggles during the midst of the financial goal of having no mortgage debt. We considered leaving the big city of Dallas and going to East Texas or finding a place with a lower cost of living. My income did not go up significantly until many years later than I would have hoped. The majority of our payoff journey was done on less than $65,000 per year. It was only once I jumped into the 6 figures near the end that we are able to finally put the nail in the coffin, so to speak.
We paid off our house after about 8 years in the house. That was about 3 years ago and it felt really good. But the hard part actually came after when we had to figure out what to do with the extra income and where to put it. We immediately seemed to feel stretched thin and we struggled to save in the way that we expected we would be able to before we paid off the house. What I’ve uncovered is that we actually were probably doing pretty well with our finances, we just now had kids entering the older ages when they cost more. Additionally, when we were paying off the house I taught adjunct for all of those years and all of that extra money was put on the principal, every month. And I had stopped doing that.
So, I kept looking at our finances and wondering why we seemed to still not have any extra money. This is after our house was paid off and I had been getting paid more in my work. And I think part of it is we have needed a little break and we’ve added workout programs and a little more cost for kids sports and activities. Another part is we have continued to try and get pregnant and there is a monetary investment in that process.
So, it feels like there has been this new season that is coming upon us where we are transitioning from a struggling, dependency to a thriving, dependency. We have been talking about a new house that has more space for our growing kids and our family, which is now a family of 5. But we have continued to try and be financially responsible and it’s been hard in our neck of the woods. Many people are paying way more for houses than I believe they are worth. And then renovation costs are way too expensive. So, we deliberated buying a house a little bigger but the costs would have been over $100k to $200k more because all of those houses are being renovated and are very hard to buy.
Instead, we chose to buy a bigger house that has potential to be on the higher end but needs a complete renovation but has great bones. I have house construction background and love the process of renovating a home to make it what we want it to be. Well, we found a house that felt divinely orchestrated. We met the kids of the owners of a wonderful house who had recently passed. And they were very warm and inviting and basically gave us all the information in order for us to be comfortable buying the house. And the last contract on the house had just fallen through that morning. We put the house under contract while the house had yet to go through probate. Everyone told us it wasn’t a legitimate contract but we just persisted to trust that they were going to sell to us, that they were true to their word. And we waited.
We had to wait over 3 months for probate to actually happen, it got delayed multiple times. The market interest rate began to go up, which made us more uncomfortable. But then, we ended up being able to get the house and rather than a conventional loan we got an investment loan so that we could make changes to the house and then we wouldn’t have to refinance to a conventional loan later. The investment loan allowed us to secure the house and then we could wait for an extended period of time to lock in a conventional loan.
All of this happened, and it required us to go back into debt and take some chances. But this time I have felt complete confidence and clarity that this was what we were supposed to do.
So, have we forgotten Dave Ramsey? No. I think we often look at biblical principles as rules and we say “you can’t EVER do that”. And that’s not what the Bible is expressing. We only have 10 rules, and those are the 10 commandments. The rest is an opportunity to learn dependency and contentment regardless of what circumstance that we face. It is still good to have no debt. But it is better to have peace, confidence, and clarity in what you feel called to do.
A rule of thumb that I always consider around a financial investment is whether or not something will allow you to be “free to God” rather than “tied down by obligations”. Because debt is an obligation to pay something. And I think of the concept that the buyer is slave to the lender. And while I realize that is there, in this case I do not feel that we are “tied down”. I have felt like in this process we are stepping into something that God has for us. More that God has for us. And it will have some discomfort but I am thankful that God brings us to a place where we don’t just follow Dave Ramsey’s steps without first considering where our identity can be shaped and guided in relationship to God.
One of the biggest problems I’ve had after paying off my house is all of these businesses who, most of them, begin their business journey with business debt. They might work to pay it off or in some cases they wouldn’t be able to stay afloat without debt. The financial investment to have the business is too big. It would take years, decades possibly, to pay off all of the debt of the technology or infrastructure to run these businesses. And I started processing what this should or could look like for us. I’ve always wanted to be an entrepreneur, to pursue ideas and create something for the benefit of other people. And I am trying to step into the identity in Christ that God has for me.
I like how Dallas Willard calls discipleship, “Discipleship is the process of becoming who Jesus would be if He were you.” In this, I don’t need to be anybody else except for who I am, in Him. That is what I have learned after paying off my mortgage debt.