The Opportunity Cost

In everything we do, there is what is known as an opportunity cost.  Doing one thing means not doing another.  Spending or investing money in one thing means not spending or investing money in another.  Even doing nothing can have it's consequences (See the parable of the talents, Matthew 25:14-30)  This week, I am going to break this blog into two categories, the spiritual and the financial.  Each will explore opportunity costs in these two different aspects and hopefully challenge you in each.

The Spiritual Cost- Think back on the people that have invested in you.  Individuals along the way have invested their time into you and that investment has brought you to where you are today.  When I think back on my life, I am brought to my childhood friend, Jeremi, that invited me to church with the promise that there would be pretty girls attending.  I think of the youth pastor, Greg, that invested months of time in me and would eventually lead me to the most life transformational  experience in my life, choosing to be a Christ follower.  I think about my parents who paid for the education of a christian college that led me down a path that I never imagined prior to Jeremi's initial invitation.  All along the way, people invested in me in small or large amounts and that investment has shaped who I am in small and large ways.  As I look at what I invest myself in, each minute has the potential to be a wise investment or a lost opportunity.  If I stay quiet when I someone hurting or headed down a bad path, it could mean destruction in their life.  If I choose to simply say "You should come to church with me, there are pretty girls there", it may be a small investment that yields eternal dividends.

The Financial Cost- Similar to the spiritual aspect, there is a tangible opportunity cost with everything that you do with your financial resources.  Do you tend to spend everything you get?  Do you invest, or save?  Most of us tend to spend more easily than we save.  This can cost you an opportunity later.  That daily lunch out can mean not being able to help pay for you children's college education or wedding.  Your car payment may mean not retiring at age 65, or at all.  How you choose to allocate resources also has eternal consequences.  Perhaps your spending has hindered your ability to sponsor a child that will hear about Jesus and be given an education, or even adopt a child that is lost in our foster care system. How you invest the money God has entrusted to you has real and lasting consequences.

It's time to weigh the opportunity cost.  What are you investing in?  Will it make a difference a year, a month, or even a day from now?  Are you missing out on some eternal opportunities?

Money - The Root of All Evil?

Money is evil right?.. No.  The bible says that money is the root of all evil... Not exactly.  Oh yeah, it says the love of money is the root of all evil... Wrong again.  The verse you are looking for is "For the love of money is the root of all kinds of evil." - 1 Tim 6:10

Money is neither good or evil, but instead it is a tool to be used for good or evil.  Many times we look at others that we perceive to make or have more money than us and we are quick to judge either how they spend or even save the money that has been intrusted to their care.  Even as we judge them, we spend every dime that we make on ourselves justifying our selfish spending on our "lack of income".  I know I have found myself there, and I'm sure you have too.  The irony is that it is our own love of money that leads us to think another has a love of money.

What kinds of evil are we talking about?  Here are a few:

• Envy - Our love of money can lead us to envy another person's wealth and possessions.  This can manifest itself in a small way like changing a relationship with a person we envy all the way to taking, through force or coersion (usually through government), the wealth of one who earned it to give to ourselves or others who did not earn it.  Envy can lead to some dark places and was one motivating factor that led to the Nazi concentration camps. They blamed the Jews for their economic hardship and took their possessions, and ultimately their lives.
• Oppression - This is on the opposite end of the spectrum from envy.  For those who have accumulated many worldly possessions (This is more typical in people with high incomes that spend wildly and almost exclusively on themselves), they will be tempted to manipulate (through gifts and bribes) and even enslave (through giving loans) others to be used for their own purposes.  This can get to the point of using their money, power, and influence to get special favors or to hurt another individual.  This is the prominent view of the rich throughout history.
• Pride - Whether we have much or little, we can begin to trust in money and stop trusting in God.  When we begin to view what God has given us as ours, it is just a short descent to trusting in ourselves or our money as our source of security.  Remember that it could all come crashing down tomorrow as many of us have learned in the current recession.

How do we avoid the love of money?  Contentment and trust.  Be content with what you have been given.  If you are content, others possessions will not matter because you are still content without them.  The interesting thing is, the more content you are, the more money you will accumulate.  Trust in God alone and look to Him as your provider.  This is not a license to spend everything on yourself or even give to the detriment of your family in order to "trust" God more.  Instead acknowledge him as the owner of all and know that he will provide all that you need.  The starting point of trusting God is through tithing (giving God back 10% of your income).  This is the first step of trusting God as your provider and until you begin tithing, you can never fully trust God.

The question is, are you content and are you trusting in God?

Death By A Thousand Paper Cuts

"I can't get into the flossing thing.  People who smoke cigarettes tell me, 'Man, you don't know how hard it is to stop smoking.' Yes I do, it's as hard as it is to start flossing." - Mitch Hedberg

 Bad habits are hard to kick and good habits are hard to implement.  In order to be great at something, you need to develop a habit. A habit is formed by doing one small thing a lot. The same is true with bad spending habits. It's not the huge purchases that blow up your budget but the little ones, over and over. It's the drive through, Starbucks, or one more pair of shoes.  It's death by a thousand paper cuts. But there is a way for your money to avoid that slow painful death, and to jump start your financial goals.

Here are a few tips to keep from losing all your income to little purchases. 

1. Create a monthly budget. It sounds painful but start with three categories you need to track; Groceries/Dining, Shopping, and Blow It. Figure out how much you will need each month for each category.  It is important to know how much you will spend on groceries and how much you will spend on eating out. You will find significant saving by cooking at home.  Shopping will be all those household items like cleaning products and toiletries. The Blow It category is there so that you have a little each month set aside to spend however you want.  Just having a plan will get you started in the right direction.
2. Use cash. Take out cash after payday for each category. Use the cash from each category for your purchases. This will be the biggest thing you can do to control your spending because you will think twice about your purchases.  Using cash also hurts so you will be reluctant to hand it over for those impulse purchases.
3. Stick to the budget. Plan carefully because when you run out of money, you stop spending.  This will be tough, but will be worth it when you have a lot more money at the end of the month to put toward your financial goals.

• Bonus Tip - Driving costs money.  Be aware of how much it will cost you to go somewhere.  It sounds crazy, but I know it costs me $3 for one round trip to work and back. You don't have to live the life of a hermit, but just remember that 20 mile trip to the mall will cost you even if you didn't spend a dime while you were there.

You may be thinking that you want to live life and not deprive yourself, but living paycheck to paycheck, only one financial emergency away from financial disaster is no way to live either.  What will you choose?  Will you sacrifice your financial future for things that will end up in next year's garage sale?

What spending tips do you have?  Let me know in the comments.

Garage Sale Season: 10 tips to get the most out of your garage sale.

This weekend I participated in yet another garage sale and realized that I kinda like it.  Since getting focused about getting out of debt, my wife, Jessica, and I have now held several garage sales and shopped quite a few more.  Here are a few tips to help you get the most out of your garage sale this summer.

1. Pick the right day of the week and weekend.  Saturday is the day for a garage sale so don't get too creative and do a Friday or Sunday sale. Watch out for the weather and big event weekends or holiday weekends.  Be sure to pick a weekend with good weather and know your community's events.  Is it the town parade that day? You might want to try a different weekend.  
2. Plan to prepare.  Give yourself ample time to get your stuff together the week of.  You will need time to figure out pricing, placing, and posting. (more on those later).
3. Price everything ahead of time. Figure out how much you want for every item before you open that garage.  If it's a bigger ticket item, know how much it is worth and what others are willing to pay for it.  If it is a desirable item, you can stick to your price and put it on Craig's list or ebay.  Is it just stuff you want to get rid of?  Plan on practically giving it away because you probably will when your stuck with it at the end of the day.
4. Post it on Craig's list.  Put your garage sale up on the site with details of the items you are selling.  Include pictures and prices so that people looking for certain items or just garage sales can find yours.  Don't forget to put the date, time, and location of the sale.  Craig's list shows the most recent posts on top, so wait until Friday to post your sale.
5. Mark every item with a price.  Get some pricing stickers and let people know how much you want for that Special Edition Thigh Master.  Your sale looks more inviting and you don't have to remember how much every item is.
6. Make sure the price is right.  Remember, it's not how much you paid for it, it's how much it's worth to the customer.  If it's used clothing or paperback novels, keep them under $1.  If you have another way to sell an item, you can stick to your guns on the price.  Just don't get stuck with your junk at the end of the day because you wouldn't budge on that gravy boat.
7. Place your items strategically.  The goal is to get your customer out of the car.  Spread your stuff out.  Spreading items out will make it look like you have a whole lot to look at.  Place your big ticket items up front because people will see that there is much more than junk at the sale.  Get everything out of the garage (space permitting) where it can be easily seen. Think about how it looks from the street first and foremost.  Would you stop at your garage sale? Place like items together and isles to walk in to make it a more pleasant shopping experience.
8. Signs, Signs, Everywhere the Signs.  Place large descriptive signs at every major cross street along with signs directing people to your sale.  You almost can't go overboard with this. Plan on 10 to 15 signs depending on how off the beaten path you are.  Remember to get high traffic intersections and re-assure them they are on the right path if they have a long way to go. Also, you can put them up Friday with the address, day, and time listed and catch the Friday evening commuters on their way home.  Just don't forget to take down all those signs at the end of your sale.
9. Talk to your customers.  Yes, they are customers and you should make them feel welcome.  A simple "Good morning", or "Are you looking for anything specific?" will let them know that you acknowledge their presence and make an opening to start a conversation or negotiation.  If people are checking out an item and you will go lower, it's okay to say "Make me an offer." If they are on the fence, this one phrase will put them in the drivers seat and may help get you the sale.
10. Combine your sales with friends or neighbors.  Take all these steps and blow it up with a block sale or just beef it up with some friends stuff.  If you are inviting friends to contribute, ask them not to bring their garbage.

If you use these steps, you will have to do more prep work, but you won't be scratching your head wondering why you didn't sell anything at the end of the day.  You are also likely to make a lot more than you expected.  Once you have cleaned up and counted your money, remember to sell off whatever you can on Craig's list or E-bay and add to that total.

Did I miss anything?  If you have a great tip, let me know in the comments section.

Make it a great garage sale!

Updated - 6/23/2014