Spring Cleaning Carnival: Get Out the Debt!

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The final Spring Cleaning Carnival is hosted by Claire at Saving Money Plan, who shares a pretty awesome story with you today. If you’ve missed them, you can find all the carnival topics and hostesses here.

My Debt Story

I promise you: This isn’t the debt story you’re expecting to read.

Although I am obsessed with eliminating debt, saving money smartly, and gaining true financial freedom, I have never actually had personal debt. Yes, I’m serious. And, yes, I am fortunate. I was raised in a family of staunch savers, and I inherited their gene at an early age, allowing me the blessing of never having any personal debt.

SPRING CLEANING BUTTONThere has been one area of my life where veering on the edge of debt has been a constant reality.

For several years, I worked in Kenya to start and then run a non-profit organization called Hope Runs. Hope Runs brings running, business education, and scholarship programs to students of all ages who live in AIDS orphanages. When highly motivated students leave the orphanage, Hope Runs provides college scholarships for them to continue their studies.

I began Hope Runs with my dear friend while we were both living at an orphanage in Kenya for a year. With time, we both moved back home to the USA to work on Hope Runs from afar and our personal lives took on other challenges. Although Hope Runs continues to deliver programs today with local Kenyan employees and international volunteers, for financial reasons both my co-founder and I now have other full-time jobs to help support the work.

So What Does All This Have to Do with Debt?

Like many small non-profits, every day Hope Runs faces a serious problem: the needs we want to meet surpass the financial resources we have to address them. Simply put, Hope Runs does not have enough money to solve all the problems we want to fix.

Although a lack of financial resources is undoubtedly a common problem with charitable organizations everywhere, I still remember the first time I realized the realities of what this meant for my work. One day during the first year that Hope Runs existed, I woke up in a panic. College tuitions for the ex-orphanage students were looming, and our bank account would just barely pay. One running coach was also due for his next 6-month contract, and it was high time to ship a new batch of gently used running shoes out to Kenya for the runners. We were strapped, and I was worried. Even though we could make – just barely – these expenses, what would happen when the next need came up? How would we meet it?

At first, it came as a shock to me that I had “allowed” this to happen? In my personal finances, I had always carefully saved to ensure a healthy margin for error and emergencies. I had and have always lived well below my means, and have always had audacious saving goals that have pushed me forward to continue to save aggressively and be conservative with my money. But this did not appear to be the case in my non-profit organization. What was going on?

It was during these days that I learned many of the hard lessons about debt and finances that I never had to learn in my personal life.

Was it that it was easier dealing with risk when it didn’t feel like my money? No – that couldn’t be it – there was no hiding that I was ultimately personally liable for anything Hope Runs couldn’t pay. Hope Runs started with personal funds, and any time we have problems in the future it will always be personal funds that close the gap.

The Problem

image The problem, it seemed, was boundaries. It seemed that my ability to set clear financial boundaries was significantly worse in my charity work than it was in my own personal life.

When you’re managing a non-profit or charity organization, everything can seem like an emergency. The orphanage can’t pay the rent this week, a kid falls sick and there’s no money for medicine, a child surprisingly gets into a great university but there are no funds for her to go. Compounding this problem, very often there is no one else to turn to. Working with orphanages in Kenya, our paltry resources as a non-profit organization usually are still far greater than the local orphanages we are working with. Since we step in to meet the needs that they can’t – there is no one else to turn to when we can’t meet the need.

Identifying the problem is just the first step in trying to make big changes to better equip you for the future.

The Answer

Two key lessons have come from my work with Hope Runs in Kenya that translate into all areas of my financial life, and potentially into yours as well.

1. Live like there is no one else to turn to (It is Up to You)

Despite Hope Runs’ difficult financial situation, the reality is that the orphanages we work with in Kenya are almost always more financially pressed than we are. We cannot turn to them to fill in the gaps of the needs we cannot meet. This is one of the best lessons about debt that I know.

Live as if there was no credit card to turn to. Live as if there was no family member you could beg to bail you out.

We all know that giving a drunk a drink doesn’t help them – and the same is true of financial stability. If you are facing financial problems, the best blessing in your life may be that someone isn’t there to bail you out. Instead, the best way to fix your financial situation is to change your behavior and thus change your own situation.

2. Learn that everything is not an emergency (The Art of Saying No)

One of the hardest things to come to terms with for me in working in Kenya is that not everything is a financial emergency. Since we work with AIDS orphans in orphanages this is clearly an extremely difficult statement to make. But it is true.

If you want to run a financially stable charity organization that helps orphaned and vulnerable children, you simply cannot meet every need. This lesson is true in your personal life as well. If you want to manage a financially peaceful family, you also cannot meet every need – no matter how pressing.

Getting and staying out of debt is about facing very difficult choices that call into question your ability to set hard boundaries. There will always be a boundary, and you will always need to find and refine it. As you learn with time, without boundaries you will never be able to meet any needs.

Hope Runs deal in small donations and big needs. It is a constant juggling act. Even when Hope Runs is not in debt, it doesn’t mean we are doing all we can. There is no way for us to meet all the needs of the individuals and orphanages we work with. This is hard to admit to sometimes.

I know that when Hope Runs is out of debt, it makes us a better organization. We are more confident, more ready to meet true emergencies, and happier to do the work we do. However, I also know that it doesn’t mean we are helping more people. There is no way we could ever help everyone who is knocking on our doors.

However, I do know that I cannot begin to help anyone if I don’t set strict financial boundaries for Hope Runs to adhere to.

You must learn to say no, and you must learn to say it often.

Taking Action in Your Life

I believe there is no better educational resource on debt and financial freedom than Dave Ramsey. I highly recommend all his books and DVDs, his daily radio and TV shows, and his interactive online forum: My Total Money Make-Over. Dave Ramsey has changed the lives of millions and will continue to do for decades to come. If you are eager to learn step-by-step ways to get out of debt and get on the path to financial freedom, the single best thing you can do today is buy his most popular book: The Total Money Makeover.

To Be Continued…

For more specific strategies and tips on how to get out of debt and stay that way, see the continuation of this post, “How to Get Out of Debt,” over at my blog, Saving Money Plan. (You’ll be able to enter to win Katie’s forthcoming Family Camping Handbook over there, plus get an extra entry in this week’s budgeting software giveaway.)

Last week’s winners

The winners of the List Plan It giveaway are:

  1. Stasi, the first commenter on Mandi’s post (you get to choose your prize)
  2. Liz @ Hybrid Life

Congrats, girls!

This Week’s Giveaway

Head on over to the giveaway post for a chance to win software from You Need a Budget, a $60 value. If you’re a blogger, be sure to link up any halfway related posts on debt, budgeting, or frugal practices like these. There’s also a bonus giveaway running through Friday for Stephanie Langford’s new book, Real Food on a Real Budget. She writes at Keeper of the Home, and her book is a must read!

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17 Bites of Conversation So Far

  1. Stasi says

    A Crown Financial Ministries weekend seminar was a turning point for us. I totally love Dave too his books and some free sermons he did online were helpful to keep reminding us.

    (did I seriously win last week? what do i need to do?)

  2. says

    Great post – I also have never had any debt, but think that it is very important (even if you have the frugal gene) to continually learn about budgeting and what you can do to live a more frugal life. We live on one income, so I feel that its my job to stretch that income as far as possible, and plan for whatever (kids) come in the future. Thanks for sharing your story!

  3. Kim says

    I cannot even begin to imagine how difficult it must be to have to say no to those requests. What you’re doing there is amazing.

  4. says

    Great post! We recently made the decision to follow God’s leading and I quit my part time job. It’s been a challenge to manage the money, and I am so tired of the paycheck to paycheck rut. But I wouldn’t trade spending time with my children for the punching a timeclock rut ever again! Great ideas and reminders for how to manage your money instead of the lack of it managing you. Thanks for sharing!
    .-= dawn´s last blog ..REVIEW: I Am Hutterite by Mary-Ann Kirkby =-.

  5. says

    would love to win YNAB! I bought iBank which has a lot of good things about it, but ironically the budget part of it isn’t very helpful at all! Thanks for all the amazing work you do for us and those in kenya!

  6. Susan R says

    Our fixed income isn’t increasing, but the price of real foods are. I would like to learn how to budget better so we can still eat good food, not SAD.

  7. says

    I love those two points. Our budget has gotten a little tighter with buying a new home that seems to constantly need repairs here and there. We are definitely needing to say no more often and it’s hard to do! But we know we can’t rely on others for support because everyone else is strapped for cash right now too.
    .-= Greta @ Mom Living Healthy´s last blog ..There is Life in the Garden! =-.

  8. Tammy says

    I can only wish I never had personal debt but after learning about Dave Ramsey’s plan, we are determined to get rid of it and say we will never have it again! :)

  9. Sarah-Anne says

    Thank you so much for sharing your story, and I really appreciated hearing your two points! That must be so hard to say no, but it is essential to be able to better care for the ones to whom you CAN say YES!!

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