Priceless?

There was a day in which debt was avoided. Debt was so bad you didn’t even talk about it. No one would willingly take on debt and those who did were shunned as people who were of less than upright character. I remember that day. When I was a kid people didn’t rush out and buy things just because they had to have them. If you wanted something you saved until you had enough to buy it outright. If someone didn’t want to save, he went to the store and put the item on layaway, making monthly installments until the item was completely paid for, and then and only then did he get what he desired. If you didn’t like either of those options, well, then you did without. How the world has changed in just a few short years. YES! A few short years. No wisecracks about my age!

Debt is no longer something to be avoided but something that we seem to enter willingly and freely. We actually encourage debt. Can’t afford those new shoes? No problem. For everything else there’s MasterCard. Can’t wait to see that movie on DVD? No sweat. More merchants take VISA. Want that new TV but are having trouble justifying it? It pays to Discover. Are you having trouble making ends meet because you had to have those shoes and you couldn’t wait to see that movie on your new TV? We have a low-rate refi-option just for you which will help you consolidate those bills leaving you enough to take that once-in-a-lifetime cruise. No longer the unwise financial option, debt has become normalized, the standard operating procedure for life. We are told it is good. In fact, credit card companies tell us that having what we want when we want it is priceless. So we pull out the plastic and fill out the consolidation forms so that we can live in this priceless manner having today what we cannot afford until tomorrow.

Well, it is almost priceless. Our use of debt really does have a price-tag, an average of $15,000 per household on credit cards alone, not to mention an average of $147,000 in mortgages, $31,000 on school loans, and thousands in unsecured credit. Some economists point out that this number is actually lower than previous years until you do some digging and discover that the lower numbers come because banks have had to foreclose on numerous accounts in recent days, writing off incredible amounts of debt. Actually, having today what we cannot afford until tomorrow has a price. We are drowning in a sea of debt.

It is easy to see why we would easily succumb to the allure of indebtedness. Debt allows us to scratch our satisfaction itch instantly. There is no waiting with debt, no delaying possessing what we feel we must have. The issue surfaces when the itches we scratch center on things like items we consume, experience, and wear because when the time comes to pay for what we have obtained we have already eaten, consumed, and worn out what we felt we so desperately had to have. In short, we have nothing to show for what we now must pay. We still itch, so we buy more using debt to obtain what we still cannot afford so that we owe more, and more and more. Our lives become more and more unbalanced and finally we crash, unable to afford what we no longer have.

It does not have to be this way. I know. It sounds absurd, but think of it this way. The things for which we use debt to obtain are already promised to us by God. Shoes? Got that covered. Jeans? Got that covered. Food? Got that covered. Experiences? Got that covered as well. Oh, the shoes may not be new and the food may not be eating out every day for lunch. The experiences may not involve the latest surround sound or gaming technology, but they are all we need and more. The reality is that when we stop and think, we don’t really need more, for we have been promised all we need (Matthew 6.25-26). I know it is hard to wrap our minds around it and we really can’t until we try it out for ourselves. But if we will put the plastic away we will discover that we don’t really need MasterCard, VISA, Discover, or even American Express for that matter. No, for everything else there is simply God.

A fellow traveler,

Blake

What’s my next step?

We encourage you to consider engaging in the following as a way of handing off faith in your family.

Teach your children how to save:  Debt has become normalized in our society, a means of obtaining today that which we cannot afford. Part of this movement has been the ascendance of the belief that we must possess what we desire instantly. In the handling of money, you can teach your children to approach debt differently by instructing them in how to save. Talk to your child about something they desire but cannot afford. If they receive an allowance, sit down with them and help them create a budget in which a portion of what they receive is set aside for the item they desire. Help them keep track of their progress until they have saved enough. Make the excursion to purchase the desired item a moment of celebration that affirms their patience and diligence.

We encourage you to consider engaging in the following as a way of deepening your own faith.

Right-size your wallet:  When we spend more than we earn, it is usually a strong indication that we have a spending problem. The only solution to this is to right-size our spending. Using the spending tracking sheet, seek to categorize your spending habits. You might begin by labeling items as wants and needs. You might also consider evaluating your needs category by asking if what you need could be obtained in a different, more cost-effective manner. For instance, you need lunch every day but it is more cost-effective to pack a lunch than to eat out. When you have completed your evaluation of your spending habits, consider eliminating your wants and reducing the costs of your needs. See if this brings your spending in line with your earning. If not, repeat the process until your spending does not exceed your earning.