Jack’s Buzz

Jesus knew how to hold a crowd’s attention–everyone cares about money. Someone with plenty of time once went through the Bible and counted how often Jesus talked about money, and the guy claimed that it was more than he talked about heaven.

Everyone cares about money except, it would seem, most public schools in our country. A generation back, our schools taught economics and financial management. It was uncommon for someone to get past the 10th grade and not have an idea how to manage money. Today, our schools have other things to occupy students.

USA Today highlights the problem in this article. They found that most 20-somethings have little understanding of how to get ahead or even why they’re continually behind. Few know how taxes work, how to save, or what it takes to buy a house. Almost no one understands the interest paid on their loans or that a credit card balance is a loan. Simply stated, our country is in the red, but hardly anyone knows what that means.

The consequences are not pretty. The Bible states that the borrower is slave to the lender–young Americans are walking smack into a type of slavery, and most do not know it. The Bible also indicates that oppressors target people who struggle with money woes. Money problems also increase relationship problems. Most divorced couples say that arguments about money led to their breakup. When voters do not understand money, they elect politicians who do not understand money or, worse, they elect politicians who lie about it.

When people understand how money works, they tend, over time, to make wiser decisions about spending and saving. They tend to get ahead, and to be more stable. When they respect what God thinks (about money and everything else), they tend to have stronger relationships, make wise choices, and find more financial stability.

If your financial literacy level is lower than you’d like, ask for help. People who follow God closely will not judge you or make fun of you for admitting that you need help. They’ll just help. You can also find people who don’t follow God but know about money, but I cannot predict their behavior as reliably.

Last month, I interviewed several people in the upper elite sphere of financial health. In local terms, they’re certainly not in the unpopular 1 percent rather, they are regular people with extraordinary stories. They drive normal cars, wear average clothes, and fly coach. They give away about five times more than average (and ten times more than the average politician). They work hard and love their jobs. Their annual incomes all hover near or below the median income for the Austin area.

They are debt free. They are financially independent, and all have clawed their way over a mountain of bills to find freedom. Each one made sacrifices to break the chains of debt and find freedom. Here are five things they did.

1. They did the emotional and physical math. The did not gloss over the anxiety they felt when they looked at their debts. They compared the amount in their accounts against the bills they owed and admitted that they were one layoff, one illness, or one broken transmission away from a financial disaster. They did not try to hide under false dreams of living it up by others’ standards–they wanted to live independently. They used simple math to discern their situation and then they hacked away at the negative balance.
2. They aligned with their partner. They calmly discussed what it would feel like to not worry about the bills. They dreamed of no car payments, no student loan debts, no late fees, owning a home, and having something in the bank for retirement. They agreed that neither the government nor mommy should support their lifestyle. They agreed to break out of debtors prison together, and doing so strengthened their relationship–no more arguments about money!
3. They cut spending in every area, and drastically cut luxuries. For one couple, date night became a candy bar and rented video. For another, it was a walk in the park (free!). They traded babysitting with other cash-strapped couples. They stayed out of McDonald’s, Starbucks, and Macy’s. They avoided temptation by avoiding shopping (especially so-called “sales”). They cut up credit cards and chicken, opting to pay cash and eat at home. Preparing meals together also cemented their relationship.
4. They checked progress monthly. They watched where the money went and plugged the leaks. Anything extra cut the debt. The tax refund paid off the debt. The car repair that did not happen cut the debt. Money saved when no one got sick paid the debt. They looked over their balances and cheered every gain. Again, their accomplishment bolstered their relationship.
5. They gave something back. One of the most interesting commonalities is how generous they became. All but one couple–even one that was over $350,000 in debt–gave a large percentage back to their church, missionaries, and the poor. Those who erased debt fastest gave back the highest percentages. None claimed that God rewarded them for giving to a particular church, but many said they loved helping others (instead of using spending money on themselves) more than they imagined.

They’ll be telling their stories in Life Choice classes during March. Even if you’re not sold on becoming debt-free, you will find the videos inspiring, and remember if they can do it, you can. Check with your manager for times and dates.

It’s good when prices start dropping, right? Not necessarily, Dr. Money Pits. When prices drop, job growth and wages usually follow. The national economy is complex; just like the money rolling around your house, where it goes, and how it leaks out, can be very complex.

Most years, you and I deal with inflation. Prices go up, our dollars buy less, and we think things are pretty lousy. The last several years, inflation was fairly flat, so while it may have seemed like prices went up, the data say that they really didn’t. When my children were babies, I thought prices were dropping, but it was just because we got them out of Pampers. Flippin’ Pampers are EXPENSIVE, y’all. When those children mastered potty-trining, it felt like I got a raise.

When my kids hit school age, it felt like I got a fat pay cut. I thought inflation was killing us. In reality, our family just hit a time when shoes and clothes and lunches and supplies and all the other junk seem to need cost us more than they had previously cost. Wait until your little darlings want cars and college–yikes! (Save now friends.)

Common sense says that deflation (periods when prices drop and dollars are worth more) would be to one’s advantage, but other things come into play. Here’s a relatively simple article to increase your economic acumen.

How to Beat Deflation – WSJ.com. Bottom line: stay out of debt and save your cash. Hope this helps.