Degree of Debt

College expenses are rising faster than students can pay for them.  There is no way to graduate college without a mountain of debt.  A quality education is out of the reach of most people.  These statements and others like them just aren’t true.  It’s this either/or type of thinking that gets us in so much trouble as a nation: “You EITHER get in massive debt OR you don’t get to get a quality college education.” 

The truth is, though the average college student graduates with $22,900 in Student Loan Debt¹, it doesn’t have to work this way.  In the past 40 to 50 years, college has become this fantasy experience in our nation.  We have allowed it to become this all-expenses-paid right-of-passage full of alcohol, dating, parties, and entertainment (with a few classes thrown in).  That may be fun, but it is expensive.  We’ve sold a false bill-of-goods to our children and now, those who are graduating deeply in debt are struggling to pay for an education in an economy when fewer jobs are available.  They are angry, and rightly so, but their anger is somewhat misplaced if it is used only to blame Corporate America for a bad economy.  Perhaps some anger is due to themselves and poor choices that they have made and unrealistic expectations that they have built their young fantasies on.  Perhaps some anger is due their parents, teachers, and guidance counselors who sold them on the myth of the college experience. 

Let’s look at this myth a piece at a time.

#1 – Let’s be honest here.  Not everyone has to go to college.  Not only that, many people should NOT go to college.  Their study skills, life goals, and sheer desire may not be there.  Maybe they are going because they feel they have to in order to find a good job, or because their parents want them to go.  For some, a start in the work force is what is needed.  Others may consider trade schools or union trade apprenticeship.  Let’s not forget stay-at-home parents.  Financial concerns should never prevent someone from getting to college, but desire may (and should).  All too often, we tell kids they must go to college if they want to be somebody.  Many of the most accomplished entrepreneurs never went to college or dropped out without a college degree.  Steve Jobs and Steve Wozniak dropped out of college.  Billy Joe McCombs of Clear Channel Mediadropped out of law school.  David Geffen of Dreamworks fame dropped out.   Walt Disney dropped out of high school.  So did Vidal Sassoon.  So did Richard Branson of Virgin Records and Ray Kroc of McDonalds.  Mary Kay Ash of Mary Kay cosmetics never went to college.  Hyman Golden of Snapple fame, no college.  Frank Lloyd Wright never even went to High School.  There are hundreds of others on this list², so let’s be honest that college isn’t required for everyone. 

#2 – working your way through college is not a bad thing.  Forget the whole ‘College Experience.’   You don’t need to spend tens of thousands of dollars to party for four years.  It is completely possible and realistic to work 30-40 hours a week and still attend 8-12 hours of classes.  Late nights? Yes.  Hard work?  Yep.  Severely curtailed dating life? Absolutely.  No one said it has to be easy.  What’s more, the value of working during your degree cannot be underestimated.  Part time jobs in food service, retail, and even janitorial are great character builders and offer an education in and of themselves.  You learn how to deal with people.  You learn how to serve others.  You learn the value of a dollar earned.  You learn a trade that will always be a valuable back up when times are hard.  I earned my way through college the first time working in fast food.  I know that I will always be able to support my family in the roughest of times.  I am not afraid of cleaning toilets and I am not ashamed of flipping burgers or washing dishes.  A waiter or waitress can make great money if they are hard workers and good at entertaining people too.  What’s more, the flexible schedule of restaurant work allows you to go to school during the day and work at nights and on weekends.

#3 – in almost every situation, going to an Out-of-state college is not worth the investment.  In-state tuition is cheaper and the ability to stay with relatives* makes it much more affordable, compared to paying exorbitant out-of-state tuition and dorm fees.  Yes, I know that every kid is itching to move away from home.  Yes, I know that Florida State University is right near the beach.  Yes, I know that every guidance counselor in high school wants you to apply at every college in the U.S.   But, the truth be known, you can get an excellent education at your State University. 

* it was pointed out to me that some states have larger rural populations that make staying with relatives an untenable proposition.  The savings on in-state tuition as well as using some of these other tips (especially number 4 below) still makes much more sense than going out of state.

#4 – You don’t have to go all four years to the same school.  Save money by taking your basics at a community college or online.  At the current schedule of fees and costs, I can take English 101 at a Maricopa county community college for $76 a credit hour.  Contrast that with taking the same class at ASU for $658 a credit hour².  That is TEN TIMES the cost for the same class that will transfer!!!  I recommend community college for most kids as a starter for several reasons.  Financially, it is significantly more affordable.  It gives the young adult a chance to experience a wide range of classes before locking into a degree program.  And, it gives them a chance to see if college is even right for them.  The only ones that I recommend go right into a full university are those kids who have earned a full ride scholarship.  If they’ve already worked that hard, they are ready for college, and they don’t have to worry that their classes are more expensive.  I do recommend that any students starting at community college talk with an adviser from their prospective degree university to make sure that classes they choose at the community college will transfer.  The great thing about a community college is it gives you a chance to experiment.  Take 2-3 classes of basic requirements and 1 class that looks interesting as an elective.  Most students change their degree program at least once.  Attending community college first allows you to try different things before locking in, and allows you to do it at a much more affordable rate.

#5 – Scholarships are available for more than just perfect grades or football.  There are thousands of scholarships and grants available for students.  You just have to find them.  The college financial aid counselor will point you towards some of them, but others require research.  The first time I went to college in my late teens, this meant hours in the library looking through Scholarship and Grant books and then writing essay after essay.  This time, it’s all on the internet and you can often apply online.  Often, you must still include an essay, but you can copy and paste right from your MS Word document to the online form.  Much easier. 

#6 – Extra-curricular activities are just that: extra.  Unless you have a scholarship that demands your participation in a specific sport or other program, then these things are tertiary to your primary goal of getting a good education and secondary goal of paying for the degree without drowning in debt.  If you have time then you can join a sport, a club, or a fraternity or sorority.  These things may be fun, but they just aren’t what you are there for.  Not only do these things distract you from your education and waste time that is better spent elsewhere, they cost more money.  Brutal realism is required for good financial health.

#7 – Get a degree that matters.  Very few students that I have dealt with over the years in Youth Ministry have had any clue what they really want to do for a living.  Often they have these fantasy jobs and sound certain of their goals with all the assurance of youth.  Anyone who has dealt with High School and College age kids knows the truth.  What they think they want to do coming out of High School is rarely what they end up doing for a career.  General degrees in business and education prepare you for almost any career.  Get an Associates and/or Bachelors in these fields and then specialize with a Masters degree.  If you spend four years on an Art History degree, don’t be surprised if there are few jobs open when you get out of college. 

#8 – You have to earn your stripes.  The most important lesson that we, adults, can teach kids is that you must expect to work your way up from the bottom.  You have to pay your dues. When you get out of college, you just might not be able to find a job right away.  Yes, I know, the college recruiter said that you would be making $100,000 a year within six weeks of graduation and that the college will help you find that job.  Guess what… The college recruiter’s job is to get you to come to their college (and bring money with you).  They are not always so honest about what happens after college.  What’s more, they cannot control the economy.  You will probably have to start at the bottom of your degree field and earn you way up.  You may have to do jobs you don’t like to earn your way to the job you want.  You may even have to struggle in a different field for awhile till you can even get into the company you want.  Prepare for that.  Acknowledge it now and save yourself the stress.  This is another good reason NOT to get into huge college debt.  Being debt-free or mostly so upon graduation gives you time to find your niche.  This is a good reason to work your way through college.  If you can get in on the bottom floor in a field similar to or the same as you will be working in, you may find that internship or first time job that puts you ahead of the rest of the field when you get out of school.

#9 – You don’t need credit cards to get through college.  The sad truth is that most college students  graduate with student loan debt AND credit card debt.  The average college senior graduates with an additional $4,100 in credit card debt⁴.  That is in addition to the $20,000 plus in student loans.  Credit card companies love to come to student events and give away free Frisbees and pizza for everyone who applies for a credit card.  Students, whose parents have often spent a lifetime in debt, now sell themselves into debt slavery for a slice of pizza and a toy that they won’t even have by the time they pay the bills.

#10 – College doesn’t have to take four years.  In fact, a six year degree while you work is much more realistic and will provide you with an opportunity to gain experiences that you might not have otherwise gotten.  By working your way through a realistic class schedule, you will be able to have the flexibility to take internships, study abroad for a year, serve for a summer in a charity, or any number of other life experiences that will help you be a better, well rounded person and also impress future employers. 

The college experience myth is busted.  You can have that fantasy of fraternity parties, football games, and dating the cheerleader while going to classes, but it is going to cost you.  If you choose this fairy tale, don’t be surprised when you graduate with debt up to your ears and little prospect for financial freedom in the near future.  But, if you accept reality for what it is and are willing to put a little blood, sweat, and tears (no, not the 70s band) into your education, you can come out with something of real value at a fraction of the cost, and with the ability to earn your way to the top.  For the rest of us, the teachers, youth ministers, coaches, parents, and every other person who influences young adults: it is our duty to help these kids be realistic.  Let’s not feed them any more lies about college and debt, but give them a kick start in life by teaching them the value of hard work and an earned education.  Let us pass on the idea that the world doesn’t owe them a living and they shouldn’t expect someone else to pick up the tab for their choices. 

I am not totally hard-line against any debt.  If you have to use a little to get through your last year unpaid internship, then do what you have to do.  It is much harder to get a master’s degree debt free, but do as much as you can.  It’s just the thought of teaching our kids that debt is unavoidable, so let’s just use loans for all four years and hope that we can get a job right away to pay it all.

Finally, let us help our kids in the ways we can.  If you can financially help a kid get through college, do it.  If you can pay for a book, buy them dinner, or give them your old computer or bicycle, do it.  If you can encourage them, help them research scholarships, give them a quiet place to study, do it.  If you can help them get a part-time job where you work, or write a recommendation for their internship, do it.  If you can help with their laundry, give them a ride, or assist them with homework, do it.  Whatever happens, let’s help where we can and let’s not harm them by perpetuating myths.

As long as we believe that it isn’t possible and keep telling ourselves and our kids that, then we will continue to stick them with large amounts of debt.  But, when we quit making excuses and quit perpetuating myths, then we can change our kid’s future.

1.       http://news.consumerreports.org/money/2011/05/2011-college-grads-have-highest-average-debt-to-date.html

2.       http://www.youngentrepreneur.com/blog/100-top-entrepreneurs-who-succeeded-without-a-college-degree/

3.       http://collegesearch.collegeboard.com/search/CollegeDetail.jsp?collegeId=2353&profileId=2

4.       http://www.credit.com/press/statistics/student-credit-and-debt-statistics.html

P.S. -  It’s funny, but I’ve been accused of being unrealistic and fantasizing for thinking that things can work this way.  In most cases, it is from people who don’t want to think they have made wrong choices, so they say things like, “debt is unavoidable,” or, “it’s just not possible to live debt-free.”  Yet, I know others who have taken personal responsibility and recognized that past choices do not dictate the future.  These people are paying off debt steadily and living less stressful lives.  This includes myself and my family.  I got into deep debt during my first college experience and young adult years.  After years of hard lessons and even harder work, we are almost debt free.  That is reality, not fantasy.  Invariably, the people making the excuses and saying that debt free living is a fantasy are the ones continually making the same choices that continually get them further into debt and continually cause them suffering or don’t want to be honest about their own responsibility for past choices.   Those who are brutally honest with themselves get out of trouble, those that blame others continue living in trouble.  That is my experience.  YMMV

#Occupy Yourselves

A Comparison

I've been watching the whole fuss about the Occupy Wall Street and I remember all the fuss about the Tea Party.  It's been very amusing to watch the Facebook postings on each.  I have friends on both sides of the political aisle and I have now seen several postings comparing the two movements posted by each side.  It's fun to watch each side pick the worst fringe of the other side to compare to the best of their own.  I can't be sure if they truly believe it or if they are purposely being intellectually dishonest. 

Here is my comparison of the Tea Party and Occupy Wall Street.

Tea Party	Occupy Wall Street
Grass Roots movement co-opted by Republicans	Grass Roots movement co-opted by Democrats
Represents the little guy who feels stepped on by the government	Represents the little guy who feels stepped on by corporations
Has people dressed in goofy costumes from 1700s	Has people dressed in goofy masks from 1600s
Has people playing fifes and drums	Has drum circles
Blames big government for everything	Blames big corporations for everything
Thousands of people marching in big cities holding signs calling for change	Thousands of people marching in big cities holding signs calling for change
Actually has some good points about the situation we are in with too much corporate money controlling our government	Actually has some good points about the situation we are in with too much corporate money controlling our government
Hates the government bailouts of big corporations	Hates the government bailouts of big corporations
Blames President Obama for the bailouts	Remembers that the Bailouts started under President Bush and blame him.
Offers a several overly simplistic solutions to a single complex problem	Offers no solutions to a wide range of complex problems.
Caricatures the OWS by comparing the worst fringe element of the other side with the most logical and centrist parts of their own movement.	Caricatures the Tea Party by comparing the worst fringe element of the other side with the most logical and centrist parts of their own movement.
Forgets that they only represent about a third of our country and that the other 2/3 has perspective and ideas too.	Forgets that they only represent about a third of our country (despite the 99% claim) and that the other 2/3 has perspective and ideas too.
Thinks it’s a crime to believe in socialism	Thinks it’s a crime to believe in capitalism
Old Republicans and young hipster conservatives	Young Democrats and old hippies
Primarily composed of real people with a heart to make a difference.	Primarily composed of real people with a heart to make a difference.
Complained that the media, which is (of course) all owned by the left-wing, wouldn’t cover them.	Complained that the media, which is (of course) all owned by rich corporations, wouldn’t cover them
Fox News and Drudge Report cover everything positive about this movement.  Huffington Post and MSNBC cover everything negative about this movement.	Huffington Post and MSNBC cover everything positive about this movement.  Fox News and Drudge Report cover everything negative about this movement.
Conservative media writes articles saying that you shouldn’t compare these movements because the Tea Party is right, peaceful, and the voice of the people and the OWS movement is wrong, potentially violent, and doesn’t represent most of America.	Liberal media writes articles saying that you shouldn’t compare these movements because the OWS is right, peaceful, and the voice of the people and the Tea Party movement is wrong, potentially violent, and doesn’t represent most of America.
Small fringe groups in this movement calling for overthrow of government	Small fringe groups in this movement calling for overthrow of government
People seen carrying assault weapons at rally	People seen carrying assault weapons at rally
Flyers found threatening death of government officials	Flyers found threatening death of police
Someone spit on congressperson	Someone pooped on police car
Some prejudiced hangers-on hate black people and immigrants and seen carrying signs that suggest the country would be better off without them.	Some prejudiced hangers-on hate Jews and Evangelical Christians and seen carrying signs that suggest the country would be better off without them.
Supported by two rich old white guys – the Koch Brothers	Supported by one even richer old white guy – George Soros
Held their rallies and stood around complaining, but then got people out to vote to bring some change to government	Holding their rallies and standing around complaining, let’s see if they can actually get people out to vote to bring some change to government.

What a mess we are in as a nation because of discourteous partisanship.  It's perfectly OK to have differing points of view, but the lack of any respectful disagreement and the lack of recognition that the other side might have some good points leaves us at war with one another and keeps us voting charlatans and crooks into office because, at least they vote for my side.

Let's not forget that we are all in this together. 

Dear Mr. Advice Columnist

Dear Mr. Advice Columnist,

I have a family member in trouble and hope you can help.   It’s affecting our whole family.  My uncle is out of control and I am not sure how to deal with it.    He may be senile or possibly suffering from dementia.  He used to be a likeable guy, very popular, and really had his life together.   Don’t get me wrong, he made mistakes, but he was a better guy than most people.  He was extremely frugal and built up quite a large amount of wealth.  That’s where the problem begins.  He started giving money away, to the point that he cannot pay his own bills.  He gives it to family members, strangers on the street, and even people in other places he doesn’t even know.  He buys them all sorts of things they don’t really need or that they could buy for themselves.  He has been supporting many of them, buying groceries and even paying their bills for them.  I don’t mind him helping the ones who are really in trouble, but most of them could pay these things themselves with a little financial responsibility and realistic budgeting.  But, with him paying for so much, they aren’t learning how to take care of themselves; they just keep taking from him.

I wouldn’t mind so much, but we all live together on the same piece of land that we inherited from my great-grandparents.  And, since we all share title, his financial choices are affecting us all.  What’s more, we have a joint checking account and every time I get a little money, he takes half of it and gives it away to other people.  He has actually run out of money himself and has been borrowing great amounts of credit to keep giving money away.  I’ve tried talking to my family about all of this, but since so many of them receive money from him, they don’t seem to care that we are living on borrowed time.  My cousins all think it’s no big deal.  They say that by the time the money runs out from all the credit cards and bank loans that they’ll all be dead anyway.  They don’t seem to care that their children will be horribly affected by my uncle’s mistakes and they really don’t care that it is affecting those of us that are trying to pay our own way.

What can I do?

Anxious in Arizona

 - - - - - - - - - -

 Dear Anxious In Arizona,

It’s your Uncle Sam, isn’t it.  I know that guy.  Well, the bad news is, the problem will never be fixed till your family works together to get each of themselves on a budget.  Then they can begin insisting that he cut his spending and get him on a realistic budget.  But, as long as so many of them receive money from his largess and won’t choose to be financially healthy themselves, you’ll never change anything.  I wish I could give you more hope, but as long as people act for their own selfish interests and take no personal responsibility, you are stuck. 

Mr. Advice Columnist

Ten Things the Government Needs to Learn About Budgeting That I Learned From Running a Church

Here we are again. It’s crunch time and the politicians are making a big fuss about the budget. Democrats blame the Republicans, Republicans blame the Democrats, the sky is blue, grass is green… Such is life.



In the past two years, I have become the Senior Pastor at a small church here in Phoenix. As a youth pastor for years, I never had to worry much about the budget, the elders and Senior Pastor did that. Now, it’s my job and I’ve learned that it is harder than I ever realized. Running a church is really just running a small business from a financial point of view*. Running a Government is no different from running a small business, either, just a matter of scale.


I’m still trying to get my mind around all of the issues of the business side of church, but here are some lessons I’ve learned that might just help Congress.


1. It’s easy to nickel and dime your way to deficit spending.


Most of the issues I’ve encountered when it comes to going over budget aren’t about the big expenses. Yes, occasionally an AC compressor will give out in July or an irrigation accident will destroy a neighbor’s yard and require repair, but the truth is, it’s all the little expenses here and there that build up. Paper is $35 a case. Toner is $120 a cartridge. We chose to print a hundred of those posters and suddenly, we are over budget. Workday projects, repairs, and maintenance always cost twice what you expected and necessitate three trips to Home Depot. Whoops, we did it again. This is what makes budgeting so hard, because $28 here and $55 there doesn’t sound like much until you do it too many times.






2. It’s easier to spend when it’s someone else’s money


My family is all about debt-free living. We don’t use credit cards, we don’t get car loans, and we try very hard to consider our expenses so we don’t overspend. However, when it comes to making choices of what to buy or not to buy at work, it’s easier to think, “Oh, we’ll just move the money over from another area to cover it,” or, “This item is on sale and we’ll surely use it someday, so we’ll go ahead and buy it now and replenish the fund later.” The problem is: it’s much easier to be brutally realistic about finances when you are talking about paying the rent to keep the roof over your head and paying the electric bill to keep your own lights on.



3. You don’t reduce the deficit, cut it entirely and work on paying off debt.


My earliest recollection of politics comes from the budget fights of the early eighties. I remember the politicians saying, time and time again, “We must cut the deficit.” Even as a teenager, that sounded very weird. I wasn’t even good at math, but I knew that a negative is a negative whether it was $1000 or $1 billion dollars. That’s like trying to dig yourself out of a hole by using a trowel instead of a spade. Either way, you’re still digging a deeper hole. Nope, you gotta learn to live within your means and NEVER spend in the negative.






4. There’s always a bunch of good things to do with the money, but not always a bunch of money to do good things with.


Church is all about this. There’s always someone who has a ministry need. The homeless need fed. The orphans need shoes. People in Africa need medicine. People in Japan just had a natural disaster. Poor families need Christmas presents. Missionaries need sent. Tots need toys. Trees need angels. Drives need canned food. On and on and on and on. All of these are good things, and all cost money. The simple truth is we just cannot do them all. We have to say, “No,” to some of them. That hurts, that’s difficult, and that’s absolutely necessary.


5. Look at your priorities.


Yup, that’s what this comes down to. Prioritizing. Sounds easy, right? List all your bills in order of urgency. Begin dividing up your money to pay for those. Then, create a rainy day fund and put a good percentage of money into that account to cover unforeseen problems. Then, if (IF) there is money left over, begin adding those things you want to do in priority order. Parcel out any remaining funds for those items until you run out of money. Then, say, “I’m Sorry,” to the rest of the items.






6. Consider other options to pay for things.


So, there are good things leftover from your list (see items 4 & 5 above). Gosh, there is one of them that you really, really want to do. It’s such a good idea, but we just don’t have the money in the budget for it. Great. Let’s do it. Here’s how: go to the people and sell it to them. Tell them what a great idea it is and why we should do it. If they’re on board, then they’ll help pay for it. If not, then back to the drawing board. What other ways might we fundraise for this? Who else can we get behind this idea that might help? Where else can we cut or where else can we earn the money to make it happen? What if the church as a whole doesn’t provide for it, but individuals within the church who are passionate about it get creative and make it work?


This leads us to an especially important message for the American People and our Silly Politicians. Are you ready… Wait for it…


The Government is not the only one who can provide money for good things to happen! Whoa! Step Back! You mean that private investors can do charity? You mean that churches and community groups can be responsible for some of this stuff? You mean families can actually help each other? You mean communities can get together and make something work? All of this without our Mommy the Government doing it for us?


Abso-stinkin-lutely!



7. Good stewardship matters for good character.


I know you may not believe it, but church is not about money. Our message is one of hope and truth. We point people to a righteous God. But, our message gets awfully muddled when we misuse the money that is entrusted with us. Why would someone trust us to listen to our message if we aren’t open and transparent about something as basic as our finances? Why would someone believe that God wants us to care for the poor if the church community spends all its money on events for themselves? Where is our integrity when we say we care about the poor in third-world nations who live on less than a dollar a day, but we spend $50 million on a new building for our church to meet in? As a church, the message is simple: people see the way we spend our money and it reflects on their perception of the truth of our message.


Dear Congress, this applies to you. America was once a shining beacon in the world. Is it anymore? If we expect people in developing nations to believe that democracy works, we’d better be showing them that it does. Our message of the American Way is marred by our financial failures.


8. Someone has to pay the bills and it ain’t fair to leave it for someone else.


A house of cards is bound to come tumbling down someday. It’s funny, but there is a parable about building your house on sand versus building it on solid rock. Now, Jesus wasn’t talking about our budget there, but the lesson still rings true with our finances. We may be able to spend in a deficit for a few years (or generations if you are the government). We can get away with it for a little while, but eventually the bills are going to be called in. It will be time to pay up. It just isn’t right to spend freely now, knowing our children will one day face crushing austerity measures and crumbling economy, just so we selfishly can have everything we want now. For a household, this may mean bankruptcy. For a church, it could very well close us down. For a nation, the end results are almost unthinkable.






9. Brutal Realism is Required.


This is true of thousand dollar family budgets, hundreds of thousand dollar church budgets, multi-million dollar industry budgets, and trillion dollar governments. When it comes time to cut, EVERYBODY must give a little. Pet projects must go by the wayside. If they are good, then maybe they can return someday. This is probably the biggest problem we face as a nation. Everyone agrees that the budget must be cut, but nobody is willing to give away their pet project. The arts community wants the budget cut, just not the National Endowment for the Arts. Soldiers want the budget cut, just not a dime from the military. Teachers want the budget cut, but nothing from the schools. Seniors talk about how they lived through tight times in the depression, but the AARP isn’t about to discuss ANY changes to Social Security or Medicare. It doesn’t matter whether you are a Republican or a Democrat, you want everyone else to tighten their belt, just not you. It’s time to cut everywhere. It’s hard, but sometimes you have to go through EVERY line item on the budget and make adjustments. It hurts, but it is necessary.


10. Yes, budgeting is Hard – Quit Whining About It.


I hate numbers. I detest accounting. I loathe detail work. So what? It’s my job and I have to buckle down and do it. Every year, we have to look at the budget. We have to crunch numbers. We have to make hard decisions. We have to give up things. We have to say, ‘No.’ So, I get a cup of coffee, treat myself to a donut that I’m not allowed to have, I sigh a little; and then I get to work.


Dear Congress and Mr. President (of any administration and any party). Despite what you may have been led to believe, we did NOT send you there to enrich yourself. We sent you there to make hard decisions and to be leaders. Please listen clearly to the following Public Service Announcement: “Suck It Up!!!” Quit whining, work together, give till it hurts, and tell the lobbyists and your own constituents, “I know you want this, but we just can’t afford this, so the answer is No.”






There are some who would say all of this is naïve. Sure, this stuff applies to households and small businesses, but the government just doesn’t work that way. Well, they are right about that last part: it doesn’t work. What we are doing with our money doesn’t work; it is a house of cards that is past due for a collapse. We, the American people of any party, truly are naïve if we think this can continue much longer.


I don't have all the answers, and trust me, this is still a work in progress in my own life.  But, I do know that this lesson will be learned someday... The easy way or the hard way.



* Oddly enough, I wasn’t required to take a single class in Bible College or Seminary called How To Run A Small Business 101.

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 # 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.