Monday, November 19, 2012

Finances and You

Over the years I've read dozens (perhaps hundreds) of books on finances and hundreds more web sites and magazine articles.
Handling your finances boils down to a lesson I learned the way most of us learn our valuable lessons - the school of hard knocks. Here's the lesson: Spend less than you make.
Sounds simple, doesn't it? Yet people can't seem to grasp the concept. Most people overspend. The government does the same thing.
When you are not a good steward of your money, you're heading for trouble.
Steward? What does that mean? Isn't the money yours, to do with as you please?
On the one hand, yes, it is. You certainly earn it and can spend it as you wish. On the other hand, like every other physical thing in life, money can be taken from you, lost or destroyed. You can't take it with you when you die; like all your property it then belongs to someone else.
So, in fact, you are simply a steward of the money while it is in your possession. Now before you run out and spend it all on cars and boats and guns and guitars (I live in Texas, after all), you're simply a steward of all those physical things also. Think on that for a bit.

If I ask people what one subject the Bible talks about more than any other, most of them say "God" or "love." According to most scholars, the Bible contains about 1600 verses about money, directly or indirectly. Apparently there are over 500 verses with the word "money" or "riches" or "wealth." That's more discussion than any other biblical topic, including God and love. Regardless of your opinion of the veracity of the Bible, these versions are full of good sense.
I can only talk about my experiences handling money. I'm not always good at it. I sometimes overspend. I sometimes make an impulse buy. I am much, much better now handling finances than I was when I was a young man.
Please let me be clear. I've never been wealthy. My family had very little money, but I don't think I knew that. I just didn't know many people with a lot of money. I take that back. I guess I knew some people with wealth, but they never made me feel poor. You know exactly what I mean.
So I have been frugal most of my life. I pinched pennies to go to school. In fact, if my Uncle had not died when I was a sophomore in college and left me a thousand dollars, getting my college degree would have been delayed or derailed. My scholarships and student loans got me through college - all five years. (A good counselor would have helped me a lot.)
Someone I cared about once called me "cheap" for not buying something she wanted. For some reason, that cut me to the core. After many decades of considering that statement (usually in the dark of the night) I finally concluded that I am frugal and there's not a thing wrong with that. More people need to be frugal and should be proud of it when they are!

Let's try to clear up a common fallacy. The Bible doesn't say that money is the root of all evil. It says "love of money" is the root of all evil. Look around. There are many wealthy people who are good and kind and generous. There are also some who hoard their wealth and strive for just a dollar more. Be honest, now. Didn't a picture of Ebenezer Scrooge pop into your head? What a sad man he was, wasn't he?
So the issue isn't with money, it is with your heart. As my Uncle used to say "No sin in having money as long as money doesn't have you." If the desire for that extra dollar separates you from family and from loved ones, building barriers instead of bridges, then check your heart. The issue isn't the money. As a steward, money is simply a tool; you can use your money to help make the world better or make it worse.
Proverbs 4:23 says "Above all else, guard your heart, for everything you do flows from it." (NIV)
If you want opportunities to come your way (and perhaps money as well), then treat others with respect and fairness. Our society seems to think that cheaters prosper, but they really don't. Do not lie, cheat or steal, nor suffer the same in others. If you have bills and don't pay them, you're stealing from someone.
I've known strong people who pale when I say the word "budget," but if you don't know what you have to spend, then you'll spend whatever you want. How foolish is that? If you don't budget for the electric bill, for the mortgage, for the car payment and know what is left over, then you act in ignorance. A budget is a good tool, and an easy one to do, even if it is only an estimate. Remember, the goal is to spend LESS than you make (preferably a lot less). That includes preparing for those incidental expenses and emergency expenses. Ouch.
If you are Christian and go to church, then tithe. That means give God ten percent of what you make. Net or gross? I asked that same question. My big friend Tim smiled at me through his bushy beard and with a twinkle in his eye he said "whichever you want to be blessed on." I tithe on my gross earnings AND give some to charity. What I find is that God is always faithful. There's a saying that you can't outgive God. I've tested that personally and find it is true.
Here's another principle and it totally flies in the face of today's world. If you want wealth, then give to those who have less. Really. I once was down to six hundred dollars in the bank. Recently divorced, I was living in a tiny apartment miles away from my young son. I had a good job, but was despondent over my lack of savings. I prayed and got only one answer. I wrote a six hundred dollar check to the local chapter of Covenant House. Things actually improved for me after that.
Sounds counter-intuitive, doesn't it? In fact, I am thinking to myself as I type this "Well, that wasn't my brightest move." Yet it was. I was prayerful and obedient - and others needed the money more than I did at the time.
Handling money really boils down to who is the master, and who is the slave?
Matthew 6:24 sums that thought up well: "No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money." (NIV)
There are three prevalent lies about money.
1. We deserve what we have. No, we don't. Everything you have, including your ability to think and earn money, is a gift. I know at least two guys who were brilliant and had promising careers and their lives were totally disrupted by automobile collisions. What you have can be taken away in the blink of an eye, in the blast of hurricane winds, in the cold flow of raging waters or in the blazing furnace of a wild fire. Be grateful and thankful for what you have and realize everything is a blessing - to be shared.
2. Money brings happiness. No, it doesn't. Remember when you thought of Scrooge earlier in this article? Scrooge was miserable - so miserable he didn't even know it. Those seeking money first are never satisfied with what they have. Don't get me wrong. I know that poverty doesn't buy happiness either. Happiness is an attitude, not the result of money.
3. Money provides security. If this was really true, then we'd all have a concrete goal: x amount of money and we're finally secure. We talked about this above, though. Money is fleeting and can be taken away, lost, stolen or devalued. Don't fall for this one either. Love people and surround yourself with those who love you; your needs will be met.

One final note, and I'm done. Credit Cards. Did you just shudder at that? Most people have credit card debt and don't realize how much that hurts their finances (or don't want to admit it). Pay them off. Then pay them off every single month, without fail. If you can't do that, then don't use credit cards. Give them up (radical thought, isn't it?). I'll admit we charge almost everything, and at the end of the month I pay the entire balance. Every month. Some months hurt a lot, but I do it anyway. In over a decade Darling and I have not paid any interest payments to a credit card. We use the card so we can get the miles!
Credit cards are a trap, designed to put you in slavery, to make you work to support someone else with your hard-earned cash. You don't need that kind of bondage in your life.
The bottom line of finances stays the same: Spend (much) less than you make, and your finances will take care of themselves. Be generous with what you have and find ways to help others.
Thanks for reading this post. I sincerely hope it helps some of you. Questions? Leave me a comment!

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