Doing Dumb

I've done dumb in many areas of my life, but I done costly dumb when it comes to finances.  Proverbs 18:2 says "Fools find no pleasure in understanding but delight in airing their own opinion."  How true that is!  I have been way too clever for my own good and found out the hard way that there is a difference between being clever and being wise.

In 2005, my wife and I purchased a house. We didn't have enough for a 20% down payment so we took out a Home Equity Line of Credit for $50,000 (mistake #1).  Here's where I get clever.  I choose to transfer money from my HELOC to low or no interest credit cards because I could pay a much lower interest rate. What could possibly go wrong?  All I have to do is transfer the balances back to the HELOC when the low interest rate expires. That proved to be really dumb.

After moving all but $16,000 to these credit card offers, the bank dropped our Home Equity credit limit to $16,000 without warning.  What!? You mean I now have $34,000 on credit cards and I can't transfer the balance back to the Home Equity Line? Yep.

I spent the next few years transferring from one credit card to another until I finally got fed up and attacked my debt.  Today, Jessica and I have paid off all the credit cards and are about $10,000 away from paying the rest of the HELOC off.  We feel great about the progress we made and the choices we now make, and it is all because I stopped airing my own opinions and began delighting in what God says about finances.

I'm sure you have your own stories about doing dumb and I would love to hear about them.  Let me know in the comments what your dumb maneuver was and what you did, or are doing, to fix it.

If you are struggling with debt, you can check out my blog post titled "Debt Crisis!" for some insights.

Debt Crisis!

If your not living in a van down by the river or in some commune, you have heard about the national debt crisis.  It is an enormous amount of debt, but it is just a reflection of our own personal debt crisis. There are two questions we have to answer in our own lives: Is my debt helping or hurting me?, and what does God say about debt?

There are two basic thoughts on debt and if you are like me, you where taught that debt is okay or even good if it is well managed.  If you want to purchase a home or car, then debt will help you achieve that goal.  The second mindset is that debt is something to be avoided and should only be used very conservatively on rare occasion.  The problem with the first mindset is that we haven't done the math to see if debt is helpful and we tend to let our debt creep into other purchases causing a debt spiral.

I was in the first camp and I can remember my own debt journey.  I opened my first credit card at 20 years of age and always paid it off on time.  That is until I misplaced the bill and received a late fee and a ding to my credit score.  In college, I made a scant $400 a month and started putting groceries on my credit card and paying only the minimum.  I made it through college and got a full time job, so of course I paid off the credit card and bought a brand new car.  This new car came with a $400 payment.  A few years later, I got married and, of course, bought a house (after all I had to buy quickly because house prices would only go up, ouch!).  This left me in a pile of debt and barely able to make all my payments.

I ask the question again, is your debt helping or hurting you?  It nearly crushed me.  So what does God say about debt and would this have helped me avoid my personal debt crisis? Proverbs 22:7 says "The rich rule over the poor, and the borrower is slave to the lender." - NIV  How true this was for me.  I had so many payments that I was truly a slave to them all.  I was able to tithe and eat, but had nothing left for saving or even the occasional date night (unless I wanted to add to my debt).

Now what?  If you find yourself in debt, how do you get out?  God speaks into that one as well; Proverbs again talks about what to do if you have ensnared yourself. "So do this, my son, to free yourself, since you have fallen into your neighbor’s hands: Go—to the point of exhaustion—and give your neighbor no rest! Allow no sleep to your eyes, no slumber to your eyelids. Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler." - Proverbs 6:3-5

Do whatever it takes and get free!  Dave Ramsey gives the practical advice to first save $1,000 as an emergency fund to keep from going back into debt, and then paying off everything but the house.  These are the first two steps to freeing yourself from the slavery of debt.  This is something that my wife and I have applied in our life with great results.  I will confess that it is hard!  It isn't pleasant or easy, but it is worth being free to allow God to use you in ways that you never thought possible.  There is hope and you can do it, you just have to want it bad enough.

If you are looking for more tips and tricks on getting out of debt, Dave Ramsey has some great articles and materials including an article titled "Get Out of Debt with the Debt Snowball Plan" to get you started.  You need to get mad about being a slave and sign your own emancipation proclamation. Do it today!

If you truly want to be debt free you will need a plan.  Check out my blog post about the dreaded "B" word, "Budgeting".

God and Money

As we explore what God says about finances we often start with asking how God wants us to use our money.  This is a bad place to start and will set us up with feelings of guilt and or resentment when it comes to money and God's instructions about it.  I want to flip this question on it's head and hopefully help you have a paradigm shift when it comes to your view of God and money.

This first lesson about God and finances is foundational to a healthy perspective of finances and of God.  This one concept so transformed my thinking, it changed my relationship with money, things, people and God.  This transformational idea is summed up in four words.

"It's not my money." 

 God owns it all (Psalm 50:10-11). Once I grasped the idea that everything in my life is ultimately God's, I no longer look at God as a cosmic owner trying to keep me from enjoying my money.  Instead of being resentful of the things God asks of me, I can follow His advice about money with confidence because, after all,  it is His money.

This concept will only work and make sense if you have a personal relationship with God.  Until you have decided to give your entire life over to God, this concept seems completely crazy.  Jesus gave up his life and took the punishment for my sin and my response to such grace is to give him the only thing I can offer, my life.  That includes my family, work, relationships, recreation, mind, body, soul, and oh yeah, finances.

If you want to experience God in a whole new way, and begin having a healthy view of money, then stop thinking "it's mine" and start thinking "it's God's".

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