finance

The Future Starts Now

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Day 20: April 6, 2014

My current ‘economic circumstance’ {tight budget} causes me grief on a daily basis. Frequently I want to throw a three year old style fit and scream my head off until someone shuts me up promising to take me to Hawaii. But, I tell my three year old emotions to hold on because the rest of me is over forty and capable of going without for just a little longer.

But this is growing increasingly more difficult.

Often, I turn to regret for a dysfunctional comfort. I blame my past idiotic self for my current lack of funds to buy a new outfit. I’m certain if I knew better at a young age, I would be basking in the light of wealth, instead of shadowed by my current financial reality.

Forecast: increasing clouds with no chance of sun.

In the event I really could go back in time to change my financial destiny, here’s what I might tell my 20-something year old self:

Dear Self,

Save your money. And by save, I mean like 50 percent or more of it. You don’t need to live by the beach and buy all of your meals from a restaurant. That new car is awesome, but you can’t afford it. Take the bus until you’ve saved up enough to pay cash for your car. And only after you’ve saved a crap load of cash for your future. That second job you are working to afford your lifestyle should be your savings account, not even more spending money. As a point of encouragement, kudos for planning an excellent but inexpensive wedding and for your willingness to maintain two jobs.

Give at least 10% of your money to charity. You haven’t found Jesus yet, so I’m not going to insist you give it to a church. {However, as a side note, I really wish you would find Jesus because you are about to make some really dumb choices that he probably would sway you away from.} Sharing your wealth is freeing and a great tax break. More so freeing, but you’ll understand that when you read the Bible someday.

Sacrifice during your younger years so you can live a less restricted life after 40. You aren’t going to have the two job energy like you do now, but you will have to work because you unexpectedly decide to send your son to private school with no savings to pay for it. And you really need a vacation when you are older because you get tired more easily. But when every last penny is accounted for, you won’t have the luxury of travel.

Under no circumstance whatsoever should you go into debt. Not for a car, a vacation, new clothes, or, dare I say, a home. You were lucky to leave college with only a tiny bit of debt, and you should start saving now for your kid’s college because it will cost about a billion times more than yours did. If you buy a home, save up more than 20% to put down and pay extra each year so you can pay it off. If you can’t afford a 15 year fixed loan, you can’t afford that house. Deal with it.

I want you to live a life that doesn’t feel suffocated by finances. And I want you to be free to give more than you ever dreamed so you can make a difference in the world. And I want you to give your family opportunities to learn and experience life. I want you to worry less in the future. Trust me, I know what I’m talking about.

So I know I can’t go back in time and tell myself these things, but I certainly hope someone hears it. And I don’t want you to think for a minute that I am not thankful for what I have. We have been blessed beyond measure. It’s just taken us a really long time to figure out how to appropriately manage our money in a God-honoring way. And when you are in your 40’s and finally sacrificing for your future, it is a lot harder and will take a lot more time to get to where you need to be than if you’d started 20 years earlier.

Where would you like to be in the near and distant future? Are you sacrificing for it?

this post  is part of a series called ’40 Days of Blogging’. Click the links to find other posts! Thanks for reading!

 

Here We Go Again…

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Seems like I’m back on the hamster wheel. Just when I think I’m gaining momentum and actually GETTING somewhere, I realize I’m in the same place I started. Do you think hamsters realize this? Because I don’t think they have much of a brain. Speaking of hamsters, I’m a former hamster killer. I had them as pets as a child, stinky cage and all. And didn’t care for them properly. Found one dead in the cage once. Cause of death: Dirty cage. It’s a wonder God trusted me to care for a human.

We have very complex brains, unlike the hamster. Yet, we can run on a revolving wheel much the same way without ever realizing we aren’t going anywhere. We go faster and faster, get stronger and stronger, and then we stop, look up, and see we are in exactly the same place. This relates to ALL areas of life, but I would guess that pretty much everyone can relate this to finances.

Without quoting any specific statistic, I know for a fact that finances are the number one cause of divorce in the US. And if it hasn’t caused divorce, it certainly causes stress and tension in our life and relationships. I’m not talking about the LACK of money, but the MANAGEMENT of money. What we do with what we are given. What we do with what God has loaned us. We are stewards of HIS money. And, therefore, he provides us opportunities to show him we can manage it wisely, whatever the amount.

God has given my husband and I LOTS of ‘opportunities’ (tests) with money. LOTS. Sometimes he’s given us what I consider TONS of money to work with. The parable of the talents in the Bible talks about this. If you don’t know the story, check out Matthew 25:14-30. I think, most of the time, we are the third guy in this story. We totally blow it. And we come back to God with exactly what we started with. We run the hamster wheel fast, and make no headway with what he’s given us.

Like the bible talks about, God gets pissed off at the third guy. And rightly so! It’s like when you give your kid $20 to buy a hot chocolate and he comes back with that, a giant cookie, and $11 in change. Hey! That’s MY money! And you just wasted it. We are wasting God’s money.

When God is not happy with what we’ve done, he brings us back to where we started again. This time with less. And this time, with conviction on our hearts.

You see, we’ve always had everything we need. EVERYTHING. And probably more than that. But as soon as we get everything in check with our finances, opportunities come up for us to receive more income. And EVERY time, we mis-manage that ‘extra’ money. We literally don’t manage it. We just spend it. We don’t consider it part of our budget. We don’t really consider it at all. And that’s like saying, “Oh, hey God. No, you don’t need to worry about this. We got it. This is our EXTRA. Thanks for providing that for us so we don’t have to stress out about buying things we don’t need.”

Crap. Just writing that out solidifies the fact that we are morons. We have tiny hamster brains. We live to run on the wheel of the world. And not care that we aren’t going anywhere. Not a worry about being stewards to God’s wealth.

Well, the wheel has stopped. Again. And as we look around, we are scared out of our minds of the familiar territory. Higher taxes, job changes, big life decisions, and most certainly God, have put us in a very different financial place. Something we knew was coming, yet didn’t spend a second preparing for.

God has presented us with another test. Feels like a final exam. He’s given us all the information. We’ve had plenty of homework, quizzes, projects, and group discussions. He has prepared us as much as he can. And that’s all he can do. It’s time for us to apply what we know, have faith in His teachings, and ACE this one! Prayers welcomed.

How is God testing you in your finances? Do you understand that nothing on this earth belongs to us? That we are just here to take care of it? Does that change how you think about how you manage your money? I hope it does.

Resisting The Urge To Buy

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What’s the one thing in your life you just can’t resist? Maybe a particular food, drink, or candy? A tv show, or even a person? There are some things we are drawn to in an intense way. Like a magnet even. The taste of a food might spark a favorite memory, or a tv show might bring you to another place where you can forget your crazy life for awhile. Mostly, these things are harmless, but what if the urge is uncontrollable to the point that it takes over rational thought? To the extreme that it affects your future in a negative way.

With my extreme personality, you better believe if I want something, I’m annoyingly persistent about getting it. However, I posses a strong inner voice that will pester me when I am clearly making a bad choice. The dialog between stubborn me and my inner voice might go something like this: Me, “OMG I NEED THAT!” Inner Voice, “No you don’t, the one you have is perfectly fine. It might be old and somewhat ghetto, but it still works. Count your blessings. There are lots of people who would love to have your ghetto item. Besides, what kind of message are you sending if you just spend your money willy nilly? You will appear irresponsible. Why don’t you put that money in savings or….”. I think you get the point. Trouble is, the inner voice rarely wins, and then transforms into remorse.

(Side note to those who know me personally: As annoying as I can be to my friends when it comes to convincing them of something, I’m even more annoying to myself.)

Recently, both my husband and I got the urge to buy a new car. Both our cars are 10 or more years old. One has a gianormous dent, and taped up sunroof. The other smells like, for a better word, ass, and is so compact our 11 year old can barely fit in the back seat anymore. We all groan every time we get into either car, and often wonder if parts might just drop off while driving down the road. The trouble is, for the most part, both cars, with over 145,000 miles each, still run perfectly well. Both our trusted mechanics rave about how great they run.

Regardless, we felt it was time to upgrade at least one of them. With our inner voices yelling as loud as they could against our desire, we moved full force into reasoning. My favorite: Let’s sell the compact diesel that gets 45 plus mpg cause it’s worth more.

Let’s move on and get to the point. How we manage our money directly represents our priorities in life. While this appears to be a harsh statement, don’t react until you fully understand where I’m coming from. There is a direct correlation between managing your money based on basic principles and living a life with financial peace of mind. If you are more focused on living in the moment and disregarding your future, then you likely have stress related to financial worries. You may even fight about money with your spouse, or wonder if you’ll be able to pay your utility bills.

The principles my husband and I live by are based on several years of negative life experience, followed by classes we took, then taught, about telling your money where to go, rather than wondering where it went. The methods in these classes were based on instructions from the Bible, and although you may not be a follower of God, these principles work. I won’t go into much detail, but basically: Give, plan, save, invest, and don’t go in to debt.

How does this work? Give the first 10% of your income. To your church, to a charity, to your school, or someone in need. Make a plan for where the remainder of your income will go BEFORE you spend it. Focus on your basic needs first: food, shelter, clothing, and transportation. If you DO have debt, pay those bills after you’ve taken care of your basic needs. If you are debt free, invest your money for the future and have an emergency fund of 3 to 6 months of your basic need expenses. Keep in mind, there are more specific and chronological steps to this, but they aren’t appropriate for a blog post.

The point? My husband and I spent almost 2 years focusing on eliminating our consumer debt. This included car loans, credit cards, and home equity line of credit. In about 18 months time, we paid off over $26,000 in debt and have never looked back. Because we are debt free (except our mortgage), we are able to give, save, and spend without worry. We decide every month where our money is going to go, and adjust when necessary. We pay cash for everything, and can even impulse buy when we know we have the money available.

Did we buy a new to us car? No. Were we close to doing it? Yes. Why did we choose not to? Simply, we were presented with enough road blocks that we finally snapped out of it. Instead we spent some of our savings on fixing our old ghetto Rover and drove it over 3000 miles through California worry free. And we are thrilled with our decision to remain debt free.

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