Changing habits, saving money
September 18, 2009
Every Thursday through Thanksgiving people meet at Park City’s Mountain Life Evangelical Free Church to learn how to make their lives harder.
It’s a budgeting and money-saving class that promises to help participants eliminate debt and plan for emergencies. The class offered at Mountain Life is by radio host and author Dave Ramsey, but there are many similar products and services for sale right now as Americans ponder the old Aesop fable about the ant and the grasshopper.
Sacrificing pleasures to plan for the future has more appeal this year than it did a few years ago. Four local families took the course offered at Mountain Life in years past and began changing their daily habits then.
Aaron Boerboom said he and his wife Susie lived like the average American family with almost no savings and large amounts of credit card debt.
In about a year, they paid off about $12,000 in credit card debt, $6,000 in student loans and over $8,000 on a car loan while putting $1,000 into an emergency fund. They cut up their credit cards and three years later still don’t have any.
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Debit bank cards are the only plastic in their wallet.
Today, the couple has three-months worth of living expenses in case either loses their job.
While saving up, they lived on a pretty tight budget, he said. Now they’re a little less careful, but still create a family budget.
"We’re not hurting as bad as others. There’s been times when we’ve had to use a little of our savings, but we had it there as opposed to using credit cards," he said.
Mike Lennon got so much out of the program he even took a turn teaching it in recent years. In 2006, his family was able to pay off $12,000 in credit card debt and saved $5,000.
"That was huge," he said.
Their success came from having a plan and sticking to a budget, he said. Although they stray occasionally, they still keep a monthly family budget to this day.
"Overall, (our plan) caused us to look at every bill we had: things we really needed and things we didn’t," he said.
Previously paying $20 a month for something like cable television was no big deal. But when he looked at that expense inside their plan for getting out of debt, that $240 a year became a big deal.
They started taking cash to the grocery store and only bought as much food as they had in their pocket. It was hard and embarrassing to put items back, but it made a big difference in the long run, he said.
"We cut cable, we got rid of our long-distance telephone service and we quit going out to dinner. It sucked the first three months, but we were able to save money. Then I said, ‘Now I have $1,000; three months ago I didn’t have anything!’" he said.
Now he can afford for the whole family to go on service trips to India almost every year. In this slow economy he doesn’t make as much in overtime pay anymore, but the budget helps them have more disposable income than they used to.
"We have more freedom in our finances than ever before," he said.
Eric May and Lita Muliadi
Lita and her husband Eric live in Heber and she works at Yuki Arashi on Main Street. They took the class a few years ago and said for the first time in 30-plus years she learned how to make a budget.
"You must allocate each dollar to a certain envelope or fund. That was huge for us," she said. "It changed our lives."
Both are chefs and if either saw a knife or other kitchen utensil they didn’t have, they’d buy it. No impulse buying has saved them a lot of money, she said. Now when they shop they know exactly how much they have to spend.
"We see rib eye for $30 and say, ‘Not today.’ We look at our weekly fliers from Smith’s and see what’s on sale. We tend to purchase things on sale," she explained.
The couple is saving for their retirement and has a Roth IRA. If either gets a bonus, they put it toward the mortgage. They also save for home improvements.
"Now if something breaks, we know we have the money," she said. They worry less because they know they have an account to handle unforeseen events.
"It was hard to be poor, but it’s fine. Our life is much more organized now," she said.
Danny Williams said it took several years to get totally out of debt after changing his spending habits, but they still live the same way and have no credit cards.
They used to have seven or eight and were $50,000 in debt. Cutting up those cards was the hardest thing, he said, but it got easier over time. They still have a debit card, but otherwise pay cash for everything.
Every month Williams takes $1,000 in cash out of the bank for groceries. If that’s not enough, they go without, he said.
The other day a person selling vacuums came to his home. The sales person had trouble understanding that they never buy anything that isn’t pre-budgeted and they never go into debt to buy something.
"We don’t borrow for any reason," he said. "It takes a while to save up for mountain bikes or skis when you do that."
For more information on the Dave Ramsey program at Mountain Life, contact Stan Plaisier at 647-0744 or email@example.com.