Do you realize that home ownership is an American dream not an American right? The same is true with vacations, cars, and designer clothing. Not everyone gets to enjoy all of the amenities America has to offer and the sooner we accept that the better off we will be. Moreover, the sooner we end our bondage to the debt-driven life the more prosperous we will become as individuals and as a society.
We rail about wasteful government spending and unsustainable budget deficits but the truth is most of our personal financial practices are as bad as the financial practices of most governments. Thanks to financial institutions with overzealous lending practices, coupled with individuals with little to no fiscal responsibility, people buy homes they cannot afford. Add to that buying pattern a recession, and now we have foreclosed homes sitting in neighborhoods all across America. Shame on us.
What does it mean to live within your means? Unfortunately it is a concept that most Americans care nothing about. Consider this: if you don’t have the money, don’t spend the money. If you have ever paid for a Disney vacation on a credit card then you are not living within your means. If you find yourself swimming in holiday debt come January, you are not living within your means. If you have a nice house and two cars, yet you cannot ever seem to make ends meet you are not living within your means.
For some, being fiscally responsible is not a priority and I guess those individuals are clicking off of this article about now. But for those that care about being responsible with their money, for those that believe it is important to spend wisely, build savings, and give generously then please read on.
There was a time when it was shameful to be indebted to another person and individuals would work tirelessly until they could pay their debt in full. But by the 1980s the American work ethic had been replaced by a new debt driven consumerism. We devolved from a personal savings oriented society to a debt accruing oriented society. Where families once endeavored to build their savings, they now had a credit card burning a hole in their wallet. There was no more reason to skimp and save, just put it on the plastic!
Just as your family income is limited, government funds are also limited. As an elected official with responsibility over a one hundred million-dollar budget, I have to constantly make difficult spending decisions. Setting budgets for various departments that serve the residents of Montgomery County is a challenge. Deciding which extra-governmental organizations receive assistance and which do not is difficult. I take my fiscal role seriously. I am the overseer of tax dollars that were hard earned by the residents of my county and I will manage those dollars to the best of my ability. Each month the County Commission has a long line of departments, groups and individuals seeking government dollars to aid their project or service and sometimes we have to tell them no. It is imperative that I balance the basic infrastructure needs of the county with the need to ensure the health and general welfare of the citizenry. The budget must be balanced, spending decisions must be wise, and debt must be minimal.
My approach to governing as a fiscal conservative did not begin when I was sworn into office. It began many years before when my husband and I first got married and we committed to live within our means. The same standards I apply to my family budget I apply to the Montgomery County Commission budget. I will admit, in my personal life I am sometimes swayed by my children to splurge on an unnecessary item. I occasionally give in and buy them some candy from the check out aisle. The same is true with work, but I assure you that is the exception and not the rule.
When my husband and I married neither of us was in a great place financially. He was divorced, paying steep child support payments, and living in his aunt’s basement in Lowndes County. I had just finished graduate school, had a few thousand dollars in student loan debt, and had cashed in my small 401k a few years earlier to buy a nice red Mustang. Although in our early 30s we were starting from financial scratch.
As our wedding date approached our friends and family wanted to know where we were going to buy our new home. They were surprised and confused when we told them of our decision to rent a two-bedroom house not far from downtown Montgomery. It was a small house in what was quickly becoming a sketchy neighborhood, but the rent was low so we made it work.
My husband and I both worked hard and made modest salaries so it confused everyone further when we told them of our decision to live on my husband’s income and put my entire paycheck directly into a savings account. We lived simply, but we did not go without basic necessities or even an occasional splurge. We had one emergency credit card with a five hundred dollar limit, which went unused, we had a small amount of student loan debt we chipped away at each month, but most importantly we had a growing savings account.
At the end of that first year we had enough money to put a nice down payment on a home of our own. Again, friends and family chimed in assuming we would buy a newer home in a newer area of town. We didn’t. We bought a nice older home in a central Montgomery neighborhood. We got twice the square footage for half of the price of a newer home. Sure we qualified for a much nicer home, but we were not lured into that debt trap. After some paint and new light fixtures our new house was perfect for us. After the home purchase we began using both of our paychecks for living expenses, but we still continued to build on our savings account, maintaining at all times three months worth of living expenses. We also continued to live modestly and spend wisely. With our growing family we purchased a larger vehicle but quickly paid it off when we received an unexpected bonus. Did you catch that? When we received unexpected funds we immediately put them toward debt payment versus buying something new! We enjoyed that three-bedroom ranch for ten years until our family of six wanted more space. We sold that home, made money off of the sale, added in some of our savings and bought a newer, larger home that is perfect for our family.
No runner begins the race at the finish line; likewise, we did not go into debt at the beginning of our marriage in order to buy our dream home. We worked hard, saved our money, and waited until we could afford a larger home before we purchased one. We do not use credit cards, if we cannot pay cash we do not make the purchase. We save for vacations and we do not overspend on gifts for our children. We have four college savings accounts for our four children. We fund a life insurance policy for each of us. We tithe to our local church. I do not say all of this to brag on myself or to make you feel guilty. I say it to encourage you that being fiscally responsible is possible. Please know that I complain a lot about the lack of vacations and at the end of each month when my husband curbs my spending I’ve been know to stomp and pout. But I see the big picture and I certainly enjoy the peace of mind that comes with living life in the black. I also realize if you are already drowning in debt it will be much harder for you to right your fiscal ship, but it can be done.
My husband and I have to make choices with our spending. This past year we had to deplete our vacation savings account in order to pay medical expenses for my cancer treatment. After a dramatic decrease in my annual salary two years ago we had to make the decision not to enroll our two younger children in summer camp and YMCA programs. We didn’t say, let’s borrow from our savings in order to send our children to summer camp, that’s not how fiscal responsibility works. Instead we realized we did not have the funds to do it so we didn’t do it. Likewise, as a government official I cannot give everyone everything they ask for. My children do not get all they want, but they get all they need and some of what they want. The same is true for my decisions regarding county budgeting.
Government officials who conduct their personal lives and finances in vast contrast to how they conduct their public lives and finances are hypocrites, be wary of them. I submit to you, the best way to know how someone will serve the people they seek to govern is to look at how they serve their own family. Are they committed to their spouse? Do they strive to mold and discipline their children? Are they responsible with their finances? Are they compassionate, wise, and discerning? Do they foster genuine relationships with others? While their decisions will take on a very different size and scope in the public sphere, their character will not change when they place their right hand on the Bible and take the oath of office so take note of who they really are.
Why does all of this matter? Why should we strive to live fiscally responsible lives? It is because financial stress is debilitating both for individuals and governments and because when our budgets are in the red we cannot give generously to help those truly in need. If my power is about to be turned off because I paid my Nordstrom bill instead of my power bill I certainly cannot help my neighbor who is out of work caring for her aging husband.
We should strive to live in a way that allows us the financial freedom to bless others and help those in need. But when we are too indebted to help as we should then those in need become reliant on the government to meet their needs and the government then overextends their giving and incurs greater debt which in turn can lead the government to increasing taxes which crushes our personal fiscal house further into the ground. It’s a vicious cycle, one that can only be broken by an individual – publicly and privately – being willing to make the tough financial decisions which means sometimes having to say no.
Ronda M. Walker is a Montgomery County Commissioner, wife and mother of four.