If The Shoe Fits – Don’t Buy It!

Have you ever heard someone talking about a purchase they just made and discussing that they “just had to buy it”? What forced them to make the purchase?  Were they facing the barrel of a gun and being forced by the gunman to make that purchase?

The reason I bring it up is because all too often we Americans think that we just have to buy stuff because we saw it at the store, other people have it, or it was on sale. 

Now I have to thank my parents for my love of shopping.  I love to go through the sale ads every week and see all the deals and circle all the stuff that we should buy.  They really taught me how to hunt down a good deal.  But, I’ve found one thing for myself over the years.  Sometimes the best deals are those that you don’t purchase.  If I don’t have the money for shopping, just maybe I shouldn’t be going.  Why step into Kohl’s, Best Buy, or Menards if I don’t have the money to buy anything there?  (BTW – they are all favorite stores of mine, I’m not hating on them at all.)  All we do when walking into a store is tempt ourselves to spend money.

This is where I hit you hard:  YOU NEED TO HAVE A BUDGET.  But, not only do you need to have a budget (even a monkey can be trained to put numbers on paper), you also have to stick to that budget.  If you have $500 for food this month, then you have to find a way to spend only that much on food.  Same thing goes for clothes, gas, and all the other categories!

If you need help working out a budget, then you and I need to talk.  This is a passion of mine, and I’d like to help you get there.  I can show you the principles of doing the budget, and we don’t even have to talk real numbers unless you want.  The thing to know is this:  God doesn’t want you to be in debt.  You are slave to the lender (see Proverbs 22:7) and it’s time to end that relationship and get closer in the most important relationship in your life:  God.

Giving Like No One Else

I’m pretty sure that every time I write about money on here I mention the name Dave Ramsey.  He’s a financial counselor whom I listen to almost daily on his nationally syndicated radio program and whose teachings I subscribe to in my financial life.  The title of today’s Momentum comes from a promotion that Dave is running on his web site:  www.daveramsey.com. 

Dave and his team are giving away all kinds of different items to people who enter each and every day of the promotion.  This promotion is something that I enter every day, even though I’ve never won anything from all of my entries. 

I mention this promotion for two reasons.  #1 is that I want to share the opportunity with all of you, even if it hurts my chances.  The more of you that enter, the harder it is for me to win, right?  Still, I try to be selfless, lol.  #2 is that I want to be giving like this someday.  Now I don’t think that I’ll ever have my own program and be giving out all of this stuff, but it’s the idea that I really like.  I would love to someday have the ability to bless others with things that they want or need.  I long for the day when I can give the waitress/waiter a $100 bill as a tip just because they provided good service at the restaurant.  Or to see someone who has a need and make a payment for them, etc.

My question today is, shouldn't these be the goals of all of us?  Shouldn’t we all want to get out of debt and then be able to bless others who are less fortunate than we?  Wouldn’t it be cool if all we asked in return from those whom we bless is that they someday pay it forward (great movie btw) and bless someone else when they are in the position to do so as well?  What kind of world would we live in if God's people were all blessing each other, and all working our way out of the bondage known as debt?

As this holiday season kicks into full gear I’d like to encourage all of you to give if you can this holiday season.  There are numerous people who need coats, food, and shelter in your area.  Find ways to donate items, food, or money to organizations like a food bank or Salvation Army that help those who are less fortunate.  It’s time that we all grasp the holiday spirit with both hands and open our hearts to those in need, just like Dave is doing – to bless one another.

Money Matters

Every once in awhile I allude in this space to some of the money problems we’ve had in the past and how we’ve dealt with them. I don’t know how often I’ve told the complete story, so I’d like to go over it a bit here, hoping that it helps you as well.

In college Traci and I both used credit cards to finance things that we wanted or needed. Once we were married we combined our debt and worked on getting rid of some of it while still using credit. Eventually we got to a point where we had the cards all paid off and were working on paying off student loans. Then a career change came along and we started using credit regularly again. We got into some debt but were able to pay it off once again, only to go through another career change. That career change came with us having 2 kids, a stay-at-home wife, and no job for me. The debt kept growing as we were using the cards just to keep our heads above water.

Luckily, a job for me came along right as we were about to really start to sink in the debt that we were treading in. We started to reposition ourselves financially and eventually found the water not as deep. We decided that we didn’t want to get into debt any more. Since that day we’ve been working towards getting out of debt, a process that isn’t easy at all.

We started out by writing out all of our debts from largest to smallest (leaving our the student loans that we still owe, but we concentrated on the consumer debt first). We’ve worked through all of our credit cards, paying off thousands of dollars on them. We’ve paid off both of our cars. We’ve worked on our medical debt and paid it off (minus the newer expenses when they’ve come up) and we’ve worked on our student loans and mortgage debt. Now some expenses have been added along the way due to changes in circumstances, but for the most part we’re out of the credit debt that plagued us most of our married lives. Sure we’re still working on this process and will continue to do so for some time to come.

Below I’d like to address the process for you so maybe you can follow it as well (This is from Dave Ramsey’s book The Total Money Makeover – only paraphrased with Ericisms included):

-List out your debts from smallest to largest. Work through the smallest debts first. If you have a $500 debt you pay on every month, put every extra penny you can towards that debt, while continuing to, pay the other debts down the list as you have been. All of a sudden that monthly debt will be gone, and you can put the payment you were making towards the $500 debt, plus the payment you’d been making on the next one down the list together, and you’ll see that next debt go away as well. Then when you get to the biggest one on the list you are putting the payments from all of those above it together and making huge payments on the big debt. It’s amazing how fast you can chip away at a boulder when you stop using the mini hammer and get our a sledge instead.

-Create an emergency fund. You need to start out and put at least $1000 aside in a separate account that you promise yourselves that you won’t touch without it being a huge emergency. Now that emergency isn’t running out of TP for the house; we’re talking about things like needing a new water heater, car repairs, etc. Then, when you can, you need to build that emergency fund to at least 3-4 months worth of expenses. You never know when you might lose a job, have a major medical problem, etc. It’s better to be prepared for such things.

-Pay With Cash (Or at least a debit/check card from your bank account). It’s time to get rid of the credit cards, people. Sure you just bought all that clothing for 20% off on sale at Aeropostale, but if you end up paying 15% interest on that purchase for the next year you don’t make out in the long run. Here is a rule to follow: If you don’t have the cash to buy it, then you don’t need it. It’s extremely hard, especially when all of your friends and neighbors are buying all kinds of new things all the time. Yet, if you really need it, you’ll find a way to have the cash to buy it, right? Oh, and this goes for Christmas and birthdays as well. We’ve been doing Christmas for years now totally in cash, no credit. It’s easy to do when you plan ahead. That brings up the next point:

-Budgeting. In order to really understand what you are spending money on, you need to start a budget and stick to it. In order to really know what you are spending, go ahead and spend a month or two writing down everything you spend money on (keep your receipts in a shoebox for a month or two if you have to!). Then throw it into a spreadsheet and see what kind of things you spent your money on. Then try to budget based on what you’d spent. Did you spend more than what you made last month? If you did, then you have to find places to cut. Sure it’s hard to do when gas prices change every day, but you can estimate it. The key is to make sure you don’t spend more than you make. Then you can start using cash for everything, as mentioned above. This will allow you to cut out the debt.

-Tithing. Tithing is more than giving to the church what change you have in your pocket. Tithing is giving to God what was His to begin with. If you truly trust Him, then not only will you give to God, but you’ll give to Him before you pay any other bill every month. You’ll make Him the priority and all that He is doing. When you do this not only will you be blessed for this decision, but you’ll be challenged as well. Before you started this, the enemy had control of your spending. He’s not going to like the fact that you changed the plan and gave to God. So, he’ll allow good old Murphy to come over and move into your home. You’ll have a flat tire, the washer will need a new motor, or the kids will break a window when throwing the ball in the back yard. (No experience with that one! J) Yet, if you trust God, then He'll not only fix those issues, but you’ll have money to make your budget as well. We’ve seen it time and time again in our lives, and trust me it works. God will take care of you. You just have to trust Him to do so in this area, as well as every other area of your life.

-Prayer. If you truly have given everything to God, then you have to allow Him to control your money as well, as I noted above. You have to pray about the financial decisions you are going to make. You have to pray that He controls them and that you will have the money there for whatever He wants to be doing in your life. Do you pray about your finances, thanking Him for the money you do have, and praying that He increases your territory here as well?

Those are just a few of the things that can help you with that really matters in terms of money and finances. There is so much more to discuss, but I’ve gone on enough here this week. I would encourage you to talk to me about this more, as this is probably one of my favorite areas to teach on, as you can now probably tell. I will be happy to go over budgets with you, walking alongside you on this journey if it’s something you want to start to do. Feel free to contact me any time.

Next Week: Faith Matters