Photo by lemonjenny
I entered ministry with no debt. That’s right none. Nada. Zilch.1
It remained that way for approximately a day. Actually, that might be stretching it.
In 2005, I accepted my first pastoral call. The call was to a church in the suburbs of Cincinnati, Ohio, which no longer had a parsonage. This meant working with the church board to establish the ‘housing expense’ portion of the compensation package. Keep in mind: this is 2005, prior to the mortgage bubble bursting and the ensuing debacle. Mortgage rates were low, which meant that it was going to be cheaper for the church if we purchased a home instead of renting. Our real estate agent (a member of the church), church board members, family, and friends were in agreement––this was a win-win situation for us, with no real downside.2 So, we signed the papers, got the key and moved in.
Debt entered our lives.
A few weeks later, when we took Crystal’s car for the required emission’s testing, it failed. A quick trip to the mechanic revealed that we were going to spend more to put in a new exhaust and emission system than the car was worth. With my job, Crystal’s job, and no children in the picture we assumed that we could easily swing a car payment in addition to our mortgage. So we traded in Crystal’s car on a new-to-us used car. We signed the papers, got the key, and drove off into the sunset.3
More debt entered out lives.
In a matter of months we had gone from having no debt to owing close to $200,000! Needless to say, despite our jobs which allowed us to make the payments rather easily, I did have some anxiety related to the amount of debt that now hung over our heads––my head, in particular, as we did not use Crystal’s credit to make either purchase.
The anxiety was compounded even further when I resigned from the church in 2006. The housing bubble had burst only months before. Our property value was in the toilet. Add to that the fact that an error with the company that financed our car resulted in us having a variable interest rate that jumped from 2.9% to close to 12%, and I can say with certainty it was a financially tumultuous season of life.
In the end, we traded Crystal’s car in on a smaller, more economical ride. In doing so we went from a used car to a new car and managed to score a no-interest loan. Our car payment was reduced and it felt good. But in the process we ended up with negative equity that was tacked onto the loan, so we ended up continuing to pay on a car that we didn’t own.
For the next year or so, between Crystal’s almost full-time job and my four part-time jobs, we were able to keep our heads above water. We kept creditors at bay, and thankfully never missed a single payment.
Yet there was constant pressure. Constant concern. What if my hours got cut? What if Crystal’s were cut back further?
The payments that were once easy to make were now a humungous burden hanging over our heads.
In 2007, a year after listing our house for sale, we were tired of waiting. We were sick of being on the sidelines, unable to move, paralyzed by the fear that our house would sit empty. So, we accepted a call to return to Pennsylvania, to the Mount Union Wesleyan Church.4
It was a time of high-anxiety to be sure. But God provided. Three days after moving to Pennsylvania, we had someone sign paperwork to rent our house for more than we were asking. God was (and is) good!
For the next year, things went well. We had a renter. Our mortgage payments were made. My salary afforded Crystal and I the ability to pay the monthly payment we owed on her car. We welcomed into the world our first child (in February of 2008) and things continued rather well.
At the end of that first year, our renters decided to move out. This meant a trip to Ohio for me, interviewing renters, and doing some minor repairs to get the property back into order. All-in-all, not too much stress, but some stress (and a good chunk of my time, nonetheless).
2009 and 2010 went by pretty well. No big unexpected expenses. No major life events. And then, in February of 2010, our daughter was born.
Our little car, which was almost paid off, was not big enough. One trip to town with two car seats proved that there was no way I could safely operate the gas and brake peddles with my knees jammed into the dashboard. Two days after making our final payment, we drove to the Jeep dealership and traded in Crystal’s Chevy Cobalt on a brand new Jeep Patriot.
One small car loan paid off. Another bigger car payment incurred!
Still, we were able to make the car payment without difficulty. And our rental property was pretty much taking care of itself at this point. We had a good tenant, who paid in a timely manner, handled the minor repairs and let me know of any potentially major repairs before they reached that point.
In 2011, my car––my no monthly payment car that had been so dependable––was on the verge of giving up. So I sold it and paid cash for a 2001 Volvo S80.
During the spring and summer of 2011, I led a Sunday School class at church that utilized Dave Ramsey’s Financial Peace University curriculum. As a result of the program, Crystal and I decided to employ an envelope system when it came to groceries, etc.––a decision that yielded big dividends, as we began to spend less on groceries and in other areas, thus enabling us to both give and save more. We also committed to paying down our debt. This meant paying extra each month on our mortgage and paying almost double each month on her car.
For most of 2011 and the first part of 2012, things went well. We made our payments and accumulated some savings. There was little financial angst or anxiety.
It was then that the wheels came off, so to speak. The summer of 2012 began with Crystal and I needing to replace the heat pump in our rental property––a $7,000 repair that we neither anticipated or had saved for. Not having enough money in our rental account to cover the cost, we ended up digging into our savings and writing a check to cover the cost. Then, in August, I began to have transmission issues with my Volvo. It began with a warning light and a transmission flush and filter change on vacation that cost approximately $200 and it continued with sensor replacements, further transmission repairs, etc. that amounted to approximately $500 every three to four weeks. In October, we didn’t receive a rent check and were unable to contact our renter. November came and still nothing. Not having the money in our rental account to cover the mortgage payments for those months, we dug into savings and wrote a check. Then came some water issues and the bill for said repair––another $375. Around this time it was also determined that the transmission in my car was shot. Now we faced a crucial decision: Buy a new car? or repair the one that we own debt free? We opted for the latter––another $2000.
At the end of November, we learned that our renter had issues that would make it impossible for her to pay the back rent, fees, and remain in the home. She moved out at the beginning of the month of December. So amid Christmas activities at church and celebrations with family and friends, I made weekly trips to Cincinnati to clean the property and repair the damage. All told, almost $15,000 in repairs, maintenance, etc. were necessary. Our insurance covered a portion of the loss, but we had to dig into savings to cover the rest. All-the-while, we made December, January and February’s mortgage payments out of savings. (Family kicked in and helped. My mom made several trips to Ohio with me to clean carpets, wipe down walls, and sanitize bathrooms. Crystal’s dad spent a week renovating the bathroom which had sustained most of the damage. Both sets of parents helped financially. In fact, apart from their help, we likely wouldn’t have made it.)
We weathered that storm, but our realtor said that the constant feedback from potential renters/buyers was that we needed new carpeting. While cleaner than what they were, the carpets still looked bad and had an odor to them. So we took advantage of an interest-free financing plan and put new carpeting down.
Even more debt.
A week later we had a renter.
In May of 2013, my car started to act up again. To have the problem fixed would cost another $1,500. This repair would keep the car working and buy us another six to twelve months. In the end, it was advised that we not complete the repair, but instead look for another vehicle. We ended up trading in my debt free car for a 2013 Prius v, that I love, but came with a monthly payment.
Yet, more debt…House payment. Two car payments. Flooring payment.
In June of 2013, we made the final payment on Crystal’s car and paid off our flooring ten months early!
Now, we’re back to two payments. And I can say with confidence, less debt equals less stress. (I can only imagine how stress-free it must be to have no debt!)
With the onslaught of house and car repairs behind us, Crystal and I now find ourselves trying to rebuild our savings. We weathered the storms––something that we are incredibly thankful for and would not have been possible without God’s gracious provision and the help of family. But, not knowing what is around the bend, we feel some pressure to try to squirrel some money away as quickly as possible. If nothing else, the cushion means decreased stress and the opportunity to live a more open-handedly when it comes to our finances.
As we do this, we once again find ourselves trying to ‘run lean.’ We’re asking tough questions about those things that are necessary and those things that are convenience and/or luxury. We’ve sold some things on eBay5 and Craigslist. Both of us have taken on some extra jobs. Crystal is a Thirty-One consultant. (To place a Thirty-One order please visit her page or email her for more information.) I do some website design and social media stuff for various companies. (If you are interested in my services, please contact me via email.) And we’re closely following a budget, as we try to pay down debt and build savings.
All of this to say, if you are a young pastor going into ministry, be wary of debt. Don’t incur debt unless it is absolutely necessary and completely unavoidable.6 (Chances are that you are entering ministry with student loan debt, right?! After all, according to Luther Seminary, the average student loan debt for someone with a theological education was $50,838––and that was in 2010!) Don’t be pressured into buying a house. Don’t trade in your old-but-reliable ride for something new just because you have the money.
Sit down and develop a budget and stick to it.7 Budget in such a way so as to be generous. But also budget in such a way so as to pay down your debt, while at the same time building some savings for those unexpected things in life.
I share this advice not as someone who has it all figured out. We still have debt. Debt that keeps us from living as freely and open-handedly as I would like. It is advice, however, that I wish I had heeded earlier in ministry, as I never realized quite how crippling and anxiety-inducing debt really is until I was beginning to crumple under the weight of its burden.
- Thanks to both my parents and my wife’s parents, who value education and were willing to make untold sacrifices to send us to college, both Crystal and I were able to graduate from four-year college degree programs without owing so much as a penny. Each of us owned our own car outright. Despite being close to seven years old, my car worked and required very little maintenance. Crystal’s car was on the verge of needing replaced, but we managed to squeeze a few more months of driving out of it. ↩
- At the time, the person who we purchased the property from more-or-less doubled their investment in just seven years! That kind of return helped to convince us that this was indeed the best thing to do. ↩
- Overly dramatic? Maybe. But it’s true. We signed the papers as the sun was setting and it was a nineteen mile drive from the dealership to our house. ↩
- We accepted the call despite the fact that the salary I would receive from the church would cover only about one-half of what we owed in mortgage payments for the year! ↩
- You can find some of the books and other items that I have for sale on eBay here. ↩
- What I’m learning is that in most cases debt is both unnecessary and unavoidable. ↩
- I’ll say more about this in a future post. This post is already long enough and probably exhausting enough. So more to come on this subject in the future. ↩