Financial Tip # 7 – The Old Man and the Mountain

As I sit writing this, I can look out my office window and see Squaw Peak Mountain. Every day, dozens, if not hundreds of people climb this mountain. I’m not sure why, because it is all desert and just plain hard work, but people do it anyway. I have climbed Squaw Peak several times with friends who got a wild hair and decided this was a wise idea. The last time I climbed Squaw Peak, I was huffin' and a puffin' about halfway up and I heard this huffing sound behind me. I looked back and there was this old man who looked to be about 100 years old running up the mountain. He was all skin, sinew and bone and must have weighed less than his age. But, he was moving and fast. He wore a determined look on his face and never looked side to side at the people he passed; he focussed only on the trail ahead. He ran past me and soon disappeared up the trail. I continued plodding along and by the time I had hit the ¾ mark (where it starts to get really hard), the same old man came running back down the mountain at full speed. He had already been to the top and back!!! That was very discouraging and I considered turning around and going home then and there. I didn’t want him to pass me again going back up a second time!

This brings us to our next financial tip. You have to focus on your own goals. No two people are alike. No two families are alike. There are some basic financial principles that apply to most people, but the way you employ them in your own life may differ from your neighbor.

It’s really easy to look at the guy next to you and wish you had it as good as him. This budget and finance stuff would be easy if we had a paid off house like he does. That family over there makes much more money than we do, we’d be farther along in our plan if we made that much. Look at her, her family bought her everything in life and now she just received a huge inheritance to boot; we can’t ever catch a break.

I didn’t know the story of the old man on the mountain. Why was he running? What did he have to prove? What had happened to him in life that got him there? The same is true of finances. I don’t know what other people really have going for them or what they’re dealing with. All I can focus on is myself and my family when it comes to financial planning. Our situation is the one that matters to our budget. I must keep the faith. With disciplined spending, wise budgeting, and focus on our goal, our family will get where we need to be.

On that trail that day, there were dozens of people going at different speeds. Some took side trails. Some stopped for a water break and to look at the view. There were some who quit part way and others that doggedly made it to the top. I made it that day, not as fast as the old guy, but I did make it. With that same determination, you too can make it with your financial goals, making a wise budget, becoming debt free, funding your retirement, and reaching the point where you can spend for fun, but only if you focus on your goals and not on wishing you had what someone else has.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle. But, much of this is common sense; most people just don't use their common sense when it comes to financial matters.

Financial Tip # 6 - A Cheap Trick

If you weren’t alive in the 70s, perhaps you’ve never heard of the band, Cheap Trick. They wrote a song in the late 70s called “I want you to want me.” The lyrics, sung in a soft seventies pop sound, go something like this: “I want you to want me, I need you to need me, I’d love you to love me, I’m beggin you to beg me.” I am not a fan of Cheap Trick or this song, but there is a lesson here. The singer understands that wants and needs are different.

We’ve taught our daughter an important question to ask. Whenever she says something like, “I need an iPod,” we have her ask the following question. “Is it a need, or is it a want?” Now, as a parent, it sometimes sucks to teach your kids something like this because the day WILL come when I say, “I need a new …. (fill in the blank)” and she will promptly respond, “Daddy, is it a need, or is it a want?” Don’t kids know that they should be quiet and not question their elders?

This is an inconvenient but terribly important tool in your financial tool box. The rule in our house is that we discuss any purchase over $50 and take a breather on anything over $100. Large purchases require (in most cases) a three-day waiting period where we talk about it, pray about it, and question whether this is the right choice. I have to be honest here, it wasn’t always like that. We used to spend willy-nilly on whatever we wanted and then immediately prepared the rationalization about how we really needed it.

What really brings this home is the process of having a yard sale. As you drag all the junk out of closets, from under beds, up on shelves, and off the back porch; you really get an idea of how much money you have wasted over the years, buying on impulse. Retailers know this about us, that’s why infomercials actually stay on T.V. People actually DO buy the New and Improved Electric Dog Polishers or the Amazing Milkahol Device that changes ordinary milk into gasoline for your car or the Moptastic that cleans your floors and can also be used to brush your teeth!!! You see the ad for this and you begin to go into a trance. “I need that!” you suddenly exclaim, “I don’t know how I ever got along without one!” You promptly call the telephone number on the screen before the time runs out so that you can take advantage of the $5.99 savings and free shipping. “Heck,” you think, “I’m probably making money on this deal!”

But wait, there’s more.

That object ends up in your garage only to come out when time for the next yard sale. You then look upon it wondering why in the hell you ever bought that stupid piece of junk. Sometimes, you even throw it in the trash because you don’t want the people coming to the yard sale to judge you.

I know. I’ve been there.

If you want to control your finances and ever truly get ahead in life, you have to ask yourself this one question. “Is it a want or is it a need.” Needs get taken care of first.

Air, food, water and medicine first. Feed your family. Take care of medical needs.

Shelter is second. Pay your rent or mortgage.

Keep the lights on at home. Pay your electric bill.

Save for a rainy day. Savings are important so you don’t get faced with emergency financial decision.

Give. Tithe. Donate some to help others.

Provide for your family’s future. Retirement. College. Etc.

Once your needs are taken care of, then, and only then, do you consider wants.

It is amazing how much money we waste, culturally, on junk. Buying bigger and better televisions, a newer and more powerful computer, a newer and shinier car; these things consume us and consume our money. This is one of those places where you have to be brutally honest with yourself. Every dime, dollar and nickel you waste on useless junk is multiplied in its damage, because it is money that you cannot invest and earn interest on in the future.

If you want to be financially secure, learn this Cheap Trick – know the difference between needs and wants. Ask the question “Is it a need, or is it a want?” and then base your spending decision on the answer.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle. But, much of this is common sense, most people just don't use their common sense when it comes to financial matters.

Financial Tip # 5 – Listen to Noah

Noah built an ark to survive the coming flood. It took a long time and a lot of work when the skies were bright and beautiful and there was not clue that there was a storm on the horizon. “Ha, ha,” his neighbors would say, “Look at dumb Old Mr. Noah and the stupid ugly boat he’s building on dry land.” When the rains came, they learned their lesson too late as they sunk under the waters while Mr. and Mrs. Noah and family floated safely by. God told Noah to be prepared and now I’m telling you.

OK, I’m taking that out of context for a financial series, but the idea of being prepared is a good one. If you aren’t saving money for a rainy day, then you will be in trouble when the storm comes. As I’ve written these tips, I’ve had several people comment on Facebook and in person about how they had to get a loan because of the position that they were in. That is the message of all of this, if you take control of your finances instead of letting them control you, then there should never come a time when you have to get a loan. This is why payday lenders exist – people don’t have a cushion of savings and investments. This is why car dealers make so much money off of car loans - people aren't prepared to buy their next car because they are still paying on their old one.

Every good financial advisor will tell you that you have to pay yourself first. Now, I would say pay God first (giving) and then pay yourself second, but we’ll talk about giving later in another blog. Right now, we'll talk about savings. This is building a boat before the floods come.

Every single paycheck, put a little back. If you are already in a tough financial position (as most people are), then you may only be able to put a few bucks back at a time. But do it. No excuses. Even if it is five dollars a paycheck right now, take Nike’s advice and just do it. Open a separate savings account at the bank, for which you do not have an ATM card. As each paycheck is deposited, move whatever you can afford over into that account and then DON’T TOUCH IT! This account is only for emergencies. For the record, emergencies do not include buying a better car than the one that you already have that is running. They don’t include dinner out with the family. Vacations are not emergencies.

Ultimately, save back three to six months of expenses and then some. I used to think that this was an impossible goal. But, a little at a time gets you there.

Once you have your cushion, then you begin two new steps: investing for the future and saving for specifics.

Investing for the future means retirement, college for the kids, and future medical expenses. This is done through a good financial advisor with mutual funds, IRAs, 401ks, and the like.

Saving for specific things includes your next vehicle, car maintenance and repair, vacations, house down payment (if you don’t already own one), etc. These can be specific future needs or fun desires. The key is you save for them now and then you won’t use debt to get them later.

Emergencies DO happen. The rains WILL come. The question here is whether you have built a boat to survive the flood or will you be drowning when the waters close over you.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle. But, much of this is common sense, most people just don't use their common sense when it comes to financial matters.

Financial Tip # 4: The Death of a Thousand Rose Petals

Marcus Aurelius Antoninus became emperor of Rome at the ate of 14 and was only emperor for four short years. Anyone who has spent any time with teenage boys could have told you that to give him that much power at that young of age would result in debauchery. He was so bad in fact that he disgusted the hedonistic Roman people. And that’s saying something.

During one of his infamous parties, he was said to have arranged for the ceiling panels to be pulled aside and thousands of rose petals dropped on his guests. There were so many rose petals that some of them were suffocated.

A single rose petal weighs in at just around 1/16 of an ounce. Yet, enough of them on top of you can crush you.

And this is where we get into our financial tip for the day:

A single sheet of paper weighs less than 1/200 of a pound and yet enough paper can crush you…Financially.

If you are ever going to get control of your day-to-day spending, your monthly budget, or your lifetime of financial investment; you have to get control of your paper!!! You must get organized.

This is probably the hardest of the financial tips for me to give because it is the one that I struggle with the most. I am a cluttered person. Anyone who has seen my desk can tell it is true. When my wife and I decided to take control and go debt free, we began sorting through our old paperwork. Months worth of unopened mail was placed in a plastic bin and we opened them one item at a time. We found lots of bills that we had paid, but just left the paperwork on the counter. We found sales , ads, and junk mail that should have been thrown away long ago. We found invitations to a party we missed. Worst of all, we found two checks that had been sent to us as refunds. Both were long since expired and of no further use. Our disorderly conduct had cost us money.

To control your budget and get out of debt, you must open your mail every day (or at least several times a week). Prioritize your bills by date and throw out the trash. In fact, I sort my mail over the trash so I don’t set anything down that we don’t need.

Place the bills in a tickler system so that you can pay them in order when your paycheck comes in.

Then, you need a filing system. Label everything. When you pay the bill, staple the receipt to the bill and place it in a file folder labeled for those items. If you are paying off collections, demand a payoff letter from them and then, when you pay it off, keep a copy of the checks you used so you can prove it later.

If your personality type is not one for doing this sort of tedium, you are going to hate it. But, I can promise you that it will save you hundreds and even thousands of dollars over your life time and also cut your stress when it comes time to purchase a home, pay taxes, or deal with collectors who have already been paid.

Like those little rose petals, out of control paperwork will smother you. Control your paperwork and it won’t crush you.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle. But, much of this is common sense, most people just don't use their common sense when it comes to financial matters.

P.S. I apologize for the break in this series. I was completing homework for school. Talk about papers suffocating you.

Financial Tip # 3 – Keepin’ Up with the Jones

Did you see? The Jones family just bought a new car for Mrs. Jones. We should get a new car too. Our old one is approaching 50,000 miles and it’s brown. I don’t like brown cars. I saw an ad on T.V. yesterday that says that Global Lincoln-Mercury-Kia-Mazda-Ford-Chevy-Mercedes is having a sale. And, since I mentioned a T.V. did you see that Dave got a new 90 inch 3-D Plasma TV. Best Buy is selling those for only five thousand dollars. That’s a savings of almost $2000 off the normal price. Heck, with the money we saved, we could go on a cruise like the Taylors did last month.

It may not be that obvious, but keepin’ up with the Jones family is killing us financially. I watch it in my congregation and in my group of friends. I saw it at the company I used to work for. Whenever someone gets a new car, a new computer, a new T.V., a new cell phone, or some other new toy; several other people immediately go out and get one too. And then, since everyone else is doing it, then even more people have to go get theirs too.

The idea is: if they can afford it, then we can too. The problem with this thinking is that the Jones family is dead broke. They are buying all this stuff on credit. They are so deep in debt with credit card bills and car loans that they don’t see an end in sight.

Frankly, it all comes down to locker-room mentality: ‘Mine is bigger than yours.’ This ‘mine is bigger than yours’ competition is crushing them financially, and if you try to follow them, then you’ll be crushed too.

I used to catch a lot of flack at my old job for driving a Kia. I worked with a bunch of electronics geeks who thought a souped-up rice burner was the be-all-end-all car. If it didn’t have ground effects, a custom paint job, and a turbo; it wasn’t worth driving. You know, the Fast and Furious type. They can’t afford the payment, but they can get from here to the grocery store in 58 seconds. The dark, ugly truth, though, is that they are all drowning in payments. My Kia on the other hand is paid for.

My family has a nice big-screen television. It was given to us second hand. We saved for our computer. We are saving up a little at a time for a nice vacation next year. There is a lot less stress now, when it comes to paying bills than we used to have when we believed that debt was the way to get stuff. You can actually be at peace with money without being a millionaire.

There are two fallacies to look at here:

First – Debt is a tool to get ahead with. That’s just not true. Debt is an anchor that holds you back. Very few people are disciplined enough to really make debt work for them. And even the disciplined ones are only one financial problem away from trouble. Work hard, do without, scrimp and save to pay off that debt and you’ll be able to save and invest your money to work for you, not be its slave.

Second – Stuff makes you happy. Again, it’s just not true. You want to be happy, be debt free. Bills coming in that you don’t have money for are stressful. Credit collectors calling at all hours are nerve-wracking. All the stuff that you thought would make you happy may bring you some joy for awhile, but in most cases, it ends up in the garage sale tomorrow.

Learn to do without. Smile when the Jones’s show you their new car and tell you about their giant plasma. Congratulate them and then go drive home with your family and enjoy a movie together on your normal size T.V. Later, as you are able to walk in and plop down cash for the new toy that you saved for, you can smile again when you realize that they are still paying through the nose for the item that is now an out of date clunker, while you are paying less in cash for the newer, better model.

Don’t keep up with the Jones’ Those poor guys are broke!

Financial Tip # 2 - Don't Ask A Barber if You Need A Haircut

Don't Ask A Barber if You Need A Haircut

This cowboy wisdom can be applied throughout your financial life. Don’t ask a realtor how much house you can afford and don’t ask a banker how much of a loan you need.

Don’t get me wrong, good advice is a thing to be treasured, but you always have to consider what someone’s motivation is. Are they working for your benefit or for theirs? When it comes to your realtor and banker, you don’t usually have to wonder.

This housing boom and the following bust came largely because people trusted their banker and real estate agent on what they could afford instead of educating themselves and proceeding with caution.

The biggest issue is that they base what you need on what they think that you can afford.

Let’s look at a little banking term called DTI (Debt to Income). This is a ratio of how much money you have going out the door compared to how much you have coming in the door each month. It seems like an easy concept until you consider that different banks, mortgage companies, finance companies, credit card companies and other lenders look at this amount differently and NONE of them look at it realistically.

Here is our example today:

Mr. Jones has a job where he makes $50,000 a year. After taxes, 401k, insurance, and other payroll deductions, he actually brings home about $37,000 a year. Divide that by 12 and you get a monthly income of $3083.

Let’s say that Mr. Jones is a normal guy and has a car payment of $420 (average American car payment) and car insurance payment of $145 (average American car insurance payment). He also has a home phone bill, cell phone bill, gas, water, and electric bills totaling $600 per month. Let’s not forget cable television and internet of $120 per month. Groceries are about $300 a month and he eats out a few times a week totaling another $200 a month. He also has credit cards with a total minimum payment due of $115. His rent at this time is $1000 a month. That brings him to a total of $3083 coming in each month and $2780 accounted for in spending each month. This doesn’t take into consideration that cup of coffee at Starbucks every morning, his medicine and clothes as well as other extraneous impulse buys.

To calculate his Debt to Income ratio, you divide his debt ($2780) into his income ($3083) to get 90.2%. That’s very high. Of course the rent would come out when he buys the house, but then he’ll have a house payment, plus property taxes and mortgage insurance, so that will likely be higher. Let’s say that totals $1200 a month. His DTI is now 94.1% He’ll have no cushion in case of emergency. Kind of scary, Huh? No lender in their right mind would offer this guy a loan. Except…

Different types of lenders and banks look at his DTI differently. Most don’t count utilities. So that automatically knocks off the $600 a month from their calculation. They also don’t think about groceries and payment history as well as that cup of starbucks every day, medical expenses, etc. So that knocks off another $500 a month from their calculation.

Then, the kicker: Most of them use Gross income, not Net income. So they take the $50,000 per year and divide by 12. Now the calculation works like this:

$50,000 divide by 12 = $4167. Total expenses used in calculation: $1880. $1880 divide by $4167 = 45.1% DTI!!! Now he’s looking good. Heck, he can afford way more than a $1200 a month payment now. Let’s get him into a bigger home. Incidentally, I think that politicians use this same methodology for balancing the budget.

As a consumer, it is YOUR job to be brutally realistic about your finances. Look at your real budget. Include those cups of coffee from starbucks. Don’t forget medical expenses, cell phones, and utilities. Groceries really do cost money and so does eating out all the time.

Calculate your own DTI before deciding what you can afford and don’t trust your banker or realtor on this. You don’t need as big of a house as you think you do.

I’m not telling you that your banker or realtor is dishonest, only that they are working in their interest too and you need to be aware of that. Don’t shut off your brain and blindly accept what they say.

Think for yourself and do the math for yourself.

And be careful where you get a haircut.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle. But, much of this is common sense, most people just don't use their common sense when it comes to financial matters.

Financial Tip # 1 - DON’T BUY A CAR WITH FINANCING!!!

DON’T BUY A CAR WITH FINANCING!!!

Yes, I know, everyone else does, but you don’t have to be stupid like they are. Trust me, this is a pet peeve of mine as I see young couples buy vehicles they can’t really afford and show them off in the parking lot. Sure as shooting, in the next several weeks three or four others will be buying cars they can’t afford because they see the first person driving a new car.

This is one of the simplest and most fundamental financial concepts out there. Never buy a depreciating asset using funds borrowed at interest. You are getting screwed two different ways, the car is going down in value and the amount you are paying is going the opposite direction.

I worked in dealer-finance at a certain bank who shall remain nameless, but whose initials spell the name of a constricting snake that squeezes the life out of you (fitting, trust me). While working in that department, I saw the most awful, dirty, and underhanded tricks go on. Business wasn’t done in the interest of what’s in the best interest of the customer, it was done in a ‘I’ll scratch your back if you scratch mine’ collusion between the dealer and the banker. And who suffered? The poor dumb schmuck who was there to buy a car he couldn’t afford using money he didn’t have. For the record, I was that schmuck for years too. But, my wife and I own our the car we drive and will never use auto financing again.

The math is pretty simple. Let’s look at a $10,000 car. I want to buy this car. I need it. I’m driving a Kia and my manhood will be questioned if I don’t get rid of the Kia and buy this new Mega-Sportster with over-under headers, rear spoiler exhaust mounts, hi-temperature blinker fluid, and a 700 cubic acre engine! So, I trot on down to the dealer and test drive it and then go sit in the negotiating box. Let’s not even go into the evil mind games involved in that process. Thinking myself suave, I begin negotiating. After several hours, I finally sign on the dotted line, purchasing this $10,000 car at 10% interest for 5 years. That’s a $212.47 monthly payment. Dang, I’m smooth.

Those numbers are imaginary. Let’s be honest here. Most of you have rotten credit and aren’t going to qualify for the 10% rate and let’s not forget that the dealer gets a percentage point or two tacked on to make them some extra money. And, let’s not forget that most people feel it necessary to buy even more vehicle than they can afford, because all they look at is the monthly payment. Heck, I can afford more than $212.47 a month, right?

When all is said and done, after 60 payments on time, you will have paid $12,748.20 for a car that was originally selling for $10,000! You just got screwed to the tune of $2700 and change. That is, of course, assuming that you don’t make any late payments, don’t take advantage of skip-a-payment plans or otherwise screw this up, in which case you’ll end up paying even more.

Now, let’s look at buying that car the intelligent way:

Let’s make the wise decision and keep driving the Kia (that I own outright) for a few more years, taking any necessary jabs about my manhood. Instead of a loan, I’m going to save up and buy that car myself. I’m going to pay myself the interest instead of the dealer and the banker. So, I save $212.47 a month up for 5 years in an savings account that gets 3 percent interest. At the end of five years, through the magic of compound interest, I end up having $13,982.30 to spend on the car. I actually crossed the $10,000 mark in just under 4 years, but since I kept saving for that extra year, I can now upgrade and get the Super-Mega-Sportster. I get more car than I would have the other way. The best part is, I now have the fancy car with no payments, so I immediately can begin saving for my next Ultra-Super-Mega-Sportster!

These numbers are all basic and just used as an example. Most people buy more than a $10,000 car and tend to pay way too much, much more than they can afford in monthly payments. But, with a little discipline, a little extra time in the old car, and maybe taking the bus or walking until they can afford a car; they get a lifetime of freedom from car debt.

Other key points about car buying:

Never buy a brand-new car. You take an immediate and enormous financial hit in the first year from the drop in value. Let someone else take that hit and you buy it used when it’s a year old or so. Then, you get all the warranty and much less of the value loss. If you like losing money so much that you have to have a new car, consider giving your money to me. I’ll put it to good use.

Research, Research, Research. Never buy on a whim. What is the gas mileage? What do other owners of the car think of it? What about recalls? What is the functional life of the vehicle? How does it drive? How does it compare to similar models from other manufacturers? How does the AC work? Does the cigarette lighter pop out when you push it in? Are there more than 2.4 cupholders per person? Know the important things before you buy.

Don’t buy more car than you need and don’t over customize it. Do you really need a 1000 horsepower engine to get you to and from work? Do you really need a turbo to drive to the grocery store? Brushguards and KC lights for your SUV that never leaves the pavement? Really!?!?!? Sure these things are fun and they definitely ratchet up your sperm count, but you never recoup the cost and they can hurt you on your monthly insurance payment as well as any settlement you might get in an accident. Also, if it’s just you and your wife, you probably don’t need a Suburban, but if you happen to be Mormon or Catholic, a two-seater ain’t gonna work for you.

Don’t buy another car just because you are ‘tired of the old one’ or ‘want something new.’ That’s how toddlers think. You are an adult. Grow up and be wise with your money. Drive a car as long as it’s useful and keep saving and paying yourself interest.

Go car-shopping with a friend who knows exactly what you want and will slap you silly when you get distracted by the shiny Ultra-Super-Mega-Sportster with the turbo and brushguards.

Yes, I know this is an unusual idea. You have a car loan. You always have had a car loan. Everyone you know has a car loan. In fact, most people have more than one car loan. But, it is possible and not the difficult to be wise with you money here.

Finally, comes the greatest benefit of all. Negotiate with the dealer till you get a low price because he thinks he’s going to make it up in interest on the loan. Then, pull out your roll of cash and start whipping Benjamins down on the desk-top. Smile and look at him affectionately while you pat his cheek and say, “Who’s your daddy” *

* OK, I’ve never really patted a dealer on the cheek and said, ‘who’s your daddy, but I think it would be fun.

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle.

Cry Freedom!!!

The best thing about writing a blog like this is that you have the ability to influence literally tens of people. I’ll be up front about it, I’m going to try to influence you if you read this.

In light of our recent economic issues in this country, I want to talk about money. This is the beginning of another top ten series. This one will be on money and finances. Having worked in the banking industry for more than 13 years, I have some insight and I have seen some of the most common and most terrible mistakes people make. Now, as a pastor, I know that most of the people in my congregation are in some sort of financial trouble and I can stand up and say that my wife and I have been through the financial wringer in the past and learned some lessons through the skin.

If you've been laid off, lost your home to foreclosure, had your car repoed, or been stressed by collectors, this series is for you.

I’ll bet you didn’t know it, but one of the most common topics in the Bible is money. Now, don’t run scared, there’s no organ playing and there won’t be anyone coming up and pass you an offering plate. No, the Bible is full of sound financial advice and it will be on this basis that I write this series.

On my journey to becoming a pastor, I made the commitment to preach debt free. I didn’t want debts and creditors haunting me as I taught. I was leaving a job making quite a lot of money annually and going back to college while working in ministry. I knew that, even after I got my degree, pastors don’t make a lot of money, so it seemed wise to have this goal. God provided. My wife and I sold our home and made enough from the equity to pay off most of our debts. We then worked very hard to pay off the rest. It took several years and a lot of sweat and tears, but we are there. We have one left: my student loans. We’ll get to that later.

To establish my bona-fides in this, I want to be transparent: I have been in deep debt in my life. I have known the fear of hearing the phone ring and knowing it must be a collector. I know the stress of receiving my paycheck and knowing that I don’t have enough for all the bills that are due this week. When I went to college the first time (right out of high school), I received credit card offers from every company out there. I applied for and got them too. I believed all the foolish advise out there about using credit cards to establish credit. I went on a shopping spree that lasted for years and thousands of dollars. After I was married, it took my wife and I more than a decade to get out from under that debt, and by that time, we had piled up other debt together. Thank you God, for helping us to get clear of that trouble.

The problem with debt is that you just don’t need it. People tell you that you do, but you don’t. I personally advise that you do NOT buy anything on credit except a home and an education. And then, pay those off as fast as you can. We’ll talk about that later.

The truth is, almost everyone I know has a similar story. They know that every dollar that comes in from their hard earned paycheck has to go back out the door to pay creditors. There’s that slavery.

As a banker, I worked as a loan processor and later a loan officer. I worked in all areas of consumer lending from auto finance to equity lines and loans to first mortgages and brokers. Rarely did I have a customer who was truly financially sound. Twenty to thirty thousand dollars of consumer debt was the norm and they were coming to me for more.

Near the end of my banking career, I worked for a mortgage broker. We put the broke in broker, because the company did B and C paper lending. That’s the people with bad credit to me and you. We sold 125% Equity Debt Consolidation and Home Improvement loans to people who were already in trouble. Every single day, we received 6-8 Notices of Sheriff’s Sale and Notices of Foreclosure for the people we had written loans for. That means 30-40 people every week were being financially destroyed and losing their homes by the company I worked for. My bosses didn’t care. They’d made their money and sold the loans to other investors. My conscience couldn’t handle it and I lasted just under six months.

Most of the people I have lent money to in Banking didn’t really need the money. They needed to get their finances under control. They needed to quit buying all the crap: boats, cars, second cars, motorcycles, homes, second homes, home improvements, ATV’s, TV’s, etc., etc., etc. They needed someone smack them in the head and say, “What the hell do you think you’re doing?”

They had become slaves to their debt and were using more debt as the answer. That’s like trying to dig yourself out of a hole by buying a new shovel and digging faster.

My advice to you is this: Don’t borrow money for anything except to purchase a home or get an education. If you have to borrow money for something, you can’t afford it. Period. What’s more, you don’t need it. Period. I'll give you some more information on how to actually reach this point, throughout this week.

My wife and I have weathered this recent economic downturn quite well because we weren’t up to our ears in debt anymore. We are now working on saving and investing for the future so that we can buy a home. We want a second car, but we will be saving to buy it, not going to the dealer and asking to borrow money for one. We are no longer slaves to lenders and let me tell you, it feels really good. I say this, not to brag, but to encourage you to consider this as a path for yourself. It really is possible.

Over the next ten days, I will share some tips on how to become free, to break those bonds of slavery to lenders. Just hold that image in your mind of Mel Gibson from Braveheart throwing that sword through the air and yelling, “FREEDOM.”

Disclaimer: I am not a trained financial advisor, I just play one on this blog. Seriously. Get good financial advice in life. My information comes primarily from personal experience, working in consumer lending in the banking industry, and watching friends, family, and parishioners struggle.

My Jewish Mother

I am a fraud.

I’m a fake.

A hypocrite.

When I preach on Sunday, you can see it. Be honest. I know you do. When I counsel self-control, I know you have to be questioning the validity of my advice.

I struggle and I cannot seem to control myself. I eat too much. There, I said it. I love food. I love to cook it and love to eat it. I love the sensuality of it. I eat when I am happy, I eat when I am sad. I eat out of frustration and I eat out of boredom. I have no self-control in this area. And thus, I am obese.

I have fought this issue of weight my entire life. I can remember as early as nine or ten years old being called the fat kid. I have dieted and exercised on and off again my entire adult life with limited bouts of success and long periods of complete breakdown. I’ve tried diet plans, exercise regimens, hypnotherapy, counseling, and accountability groups. None of these have had long term success for me and many have been utter failure. I’ve faced disappointment time and time again.

Four years ago, I was diagnosed with Type II diabetes. This is worse than a death sentence. This disease is degenerative and wreaks havoc with your internal systems. Heart attack, kidney failure, liver problems, nerve damage, cancer, neuropathy, digestive issues, blindness, immunodeficiency, and limb amputation are just some of the issues that arise from diabetes.

I don’t want to die from a case of the stupids. Even more importantly, I don’t want to live as a pain-ridden, feeble, invalid for years because I cannot control myself. I have a beautiful wife and two lovely daughters who don’t deserve to watch me destroy myself.

So, here is where I am at today. Just over two years ago, I was at 320 pounds. I managed to lose about 40 pounds of that myself, working out until I reached a plateau that I couldn’t seem to get past. I joined a program called Medifast where I have slowly lost about another 15. This doctor-supervised weight loss program really works. I’ve seen it work in my life and in others, but still I struggle. I don’t follow the program as I should. I cheat.

Several weeks ago, I was speaking with one of the program counselors and she asked me why I was having so much trouble and going so slowly. I listed several reasons (most to do with my own failings), but I also mentioned that when I do well, the counselors are nice and encouraging, and when I fail, they just seem to get more peppy and encouraging. I told her, “I need someone who can kick my butt when needed, someone who will tell my when my excuses are bullshit, someone who can encourage me and love on me when necessary, and someone to guilt me and shame me when it’s called for. In short, I need to find me a Jewish mother.” She looked at me slyly and smiled, saying, “That, we might be able to do.”

The next week when I came in for my appointment, the owner of the company came out and said, “Rodger, you’re with me today.” She met with me and told me that she didn’t want to waste her time or mine, but she was taking me on as a special case. She then got serious and had a long hard discussion with me. Be careful what you wish for, you might just get it. The punch-line to this joke is that I found out that night that Ilyne IS Jewish. And she is a Mother and Grandmother. So I guess I got exactly what I asked for.

So, now I have a Jewish mother. She seems like a nice lady, but, boy is she tough. Maybe she is exactly what I need.

One of the things that she suggested that I do is to tell everyone around me what my struggle is and ask them to help. So, here goes:

Please don’t go out to lunch with me. Let’s do coffee, instead.

Please don’t give me food as a present. Just spend some time with me.

If you see me eating anything that isn’t a small amount of protein and a salad, please say something.

If you care, please ask me about my progress and encourage me when you see me.

Hold me accountable. Smack me around if need be.

I appreciate any help I can get with this.

I don’t want to be a fat guy anymore.

I don’t want to be a fraud anymore.

Don't Judge Me, But......

“Please don’t judge me, but……..” In my job, I meet a lot of people who have questions. They almost always start out the conversation with a funny request. “Please don’t judge me, but…” They then go on to share some personal story about life issues and end asking what to do about the situation they are in. They want answers, but they don’t want me to use judgment. Invariably the question that they have or the situation that they are in is because of poor life choices.

Now, I know what they mean here. They don’t want me to wag a finger in their face and belittle them for being an evil sinner. I can honestly say that I have never wagged my finger in someone’s face when they came to me with such a question, but it’s funny that they seem to expect something along these lines.

“Judge not, lest ye be judged!!!” is another form of this that I hear. It seems to be the one Bible verse that everyone seems to know. They also, all seem to know the King James Version as if that makes it more powerful. This is generally said when someone has done something sufficiently awful enough that they already know it was bad and don’t want to hear about it.

Judgment.

What’s wrong with judgment.

Is it always a bad thing?

Is it ever a good thing?

When I drive up to the auto dealer and see the guy come out with the polyester suit and slick hair who gives me a price, “just cuz it’s you.” I immediately apply judgment to the situation. If not, I drive off in a junky car that I paid too much for.

When someone comes up to me and tells me that I can make money just by purchasing this box of stuff and then getting three other people under me and three other people under them and so on. I immediately apply judgment to the situation. If not, I end up with a box of cleaning supplies that no one wants and a sales bit that no one else is going to fall for.

When I open the jug of milk and it smells bad, I immediately apply some judgment. If not, I end up tossing my cookies from food poisoning. Been there, done that, got the stains on my T-shirt.

When I want to cross the road at Central and Thomas, and see the ‘Don’t Walk’ sign, I immediately apply judgment to the situation. If not, I end up squished underneath the Light Rail Train. I’m pretty sure that would hurt.

Judgment is not a bad thing, but the application or lack of application may be.

When I see a young girl who has gotten pregnant and is now having problems because her boyfriend is a jerk, I wonder why she didn’t apply a healthy helping of judgment before having sex with the guy.

When I meet someone who is in terrible financial trouble because they bought a house they couldn’t really afford, are in debt for two cars that are out of their realistic price range and have thousands of dollars of credit card debt; I wonder if the judicial use of judgment might actually benefit them.

When a guy comes complaining that his wife is divorcing him because she busted him sleeping around with her best friend, I wonder if a bit of judgment might just be in order.

Perhaps our society might do with some more judgment. Just a little smidge here and a dab there. Perhaps this is a niche industry that some entrepreneurial type might invest in. Let’s hire a bunch of older ladies in their 60s and 70s to be surrogate judgers. We could rent them out to everyday people. The grannies would follow you around and smack you in the back of the head each time you should use a little judgment.

"Hmmm. Maybe I’ll sneak out of work early today, the boss’ll never know." (((((SLAP)))))

"Hey Liz, my wife is out of town tonight, wanna go out?" (((((SLAP)))))

"Oh baby, of course I’ll love you in the morning." (((((SLAP))))) (((((SLAP))))) (one for each of them)

After awhile, Grannie wouldn't even have to slap you every time. She could just wag her finger and you'd stop and actually think about what you are doing. You might even use a little judgment.

A little judgment applied judicially at the right place and right time just might be the ticket. I really think this idea could catch on. Anyone want to take me up on the business side of this? I’ll have to copyright the idea. Maybe I’ll invest my life savings in hiring Grandmas.

(((((SLAP)))))