Welcome to Money Conversations: Volume 2!
Today, I’m going to share a conversation I had with my friend who went to the beach with me last month.
Here are the stats that I’ll share:
Name: Betsy (changed for privacy)
Family: Married to a guy (with a full-time job), has two kids (one in daycare, one in elementary school)
Career: Full-time job in teaching
Salary: Unknown, but I estimate around $45k; her husband makes more as a university professor (probably $50k – the university does not go out of its way to pay its faculty the outrageous salaries people might suppose)
Debt: From our discussion, it sounds like Betsy and her husband carry credit card debt (from being “stupid” and “immature” and “trying to keep up with the Joneses” when they were younger) as well as student loan debt. (I am not sure of the amount, but I’m going to guess, based on our conversations, that their consumer debt is somewhere in the vicinity of $10k?)
Location: Small Town (where I live!)
Background: I met Betsy when I moved to Small Town the first time, which is now about 8 years ago! We worked in the same school for a while (before I got a different job and we moved to Small City).
Betsy has told me previously that she would love nothing more than to be a stay-at-home mom, but that their finances will not permit it. She was able to stay at home for one year after her eldest son was born, because they had just sold their house when they moved to live in Small Town.
Here are some of the points that stuck out to me in our conversation:
- Betsy doesn’t like to think about how much debt they have (similar to Allie, from my first Conversation).
She knows it will eventually go away, but she, like many of my friends, believes that it won’t help to obsess over the amount, as long as it continues to decrease. (This makes sense to me, it’s just not how I roll these days.)
- Betsy regrets the amount of money they spent when she stayed home with her first son for a year.
She told me specifically that she loved staying home and that she wanted to do it again, but that she had been spending money on things they didn’t need. She wished they had been more frugal when they were younger, but especially during that year when they were living on only her husband’s income and the money from the house sale.
- Betsy and her husband recently revisited their finances and are putting a bigger effort into paying down their debt than they have in the past.
Betsy told me that, in the past, she and her husband had basically decided that their debt was just going to be there until they managed to pay it off, which they are slowly doing, month-by-month, paying the minimums. However, they have a new plan!
- Betsy and her husband were previously tithing $800 a month to their church.
This blows my mind! I don’t know how high their debt is, but if I had debt that I was worried about (well, who doesn’t?), I would not be tithing so much! I do know of many personal finance bloggers who hold steadfast to the idea of tithing 10%, so that doesn’t surprise me so much (I understand that 10% is a number given in the Bible?). (Six Figures Under and Crumb Savers come to mind.) Interestingly, Betsy and her husband tithe 10% of their pre-tax income, which I find even more astounding… and not in a bad way. I mean, these people are serious in their support of their church! I know they’re not bringing home $8k a month, so I know they’re basically giving away more than 10% of their take-home pay. Wow!
- They are now tithing only $200 and devoting the rest of the money to paying down their debts. That’s $600 a month! (Even with a huge amount of debt looming over you, $600 is a good chunk of change.)
And they’re excited! What brought about this change, you might ask? Betsy described how her husband heard a man on a Christian Talk Radio show explain that the Bible indicates that it’s a sin to have debt (hmmm…). That caused her husband to really consider his and Betsy’s situation, and he reframed his thoughts about the balance between the sin of having debt and the sin of not tithing 10%. After talking with Betsy, they decided that they would feel good about making a change. I applaud them for this. I’m not religious, but I do remember some phrase about “Taking care of one’s own house,” or something similar. Betsy told him that they would absolutely need to keep tithing, though, so they settled on $200 a month.
I’m excited for my friends that they were able to come to a solution that drastically reduces their debt while also tithing. I’m sure they will increase their tithing back to 10% once their debt is gone. As I said above, I’m not religious, and we don’t tithe personally, but I understand why others do. (We do make charitable contributions to other organizations, however.) I really would like to know how many others who are working so hard on paying down their debt continue to tithe at 10%!
Do you tithe? If so, do you tithe based on your pre-tax income or post-tax income? I’m curious!
For previous posts in this series, see: