Monday, March 31, 2008

Why is Money So Important To God? Part 2

From the post last Friday, here is the first part of the answer to "Why is Money So Important to God?'
Because how it's handled is an indicator of salvation.
I believe there is a second part of the answer as well.

Luke 12:15-21

What attitude toward wealth did the rich man reveal?

A dissatisfaction with what he has and a completely unbalanced, greedy approach toward the stewardship of his possessions.

In what specific ways did he demonstrate it?

Building more barns.

Living the "high life".

Thinking of only this world.

Mark 12:41-44

What does Mark 12:41 indicate about the way Jesus observes what we do in our giving?

Jesus assessed how people gave in a very deliberate way. He sat down to watch – he was not just passing by and he happened to glance and notice someone giving something.

Jesus is still watching with serious concern what you and I give because the nature of our giving reveals so much about our spiritual character.

Why is money so important to God?
Because the way it is handled is an index of spiritual health.

Friday, March 28, 2008

Why is Money So Important?

I love to ask why. Right? You should know that by now.

Why is money so important? There are actually many ways to answer this question. Don't you think it depends on your current circumstance? This week money was important to me because I needed to keep my family safe by fixing our van. It really is a personal question. But sooner or later, like all why type questions, there is always one ultimate question and the only adequate answer is the one found outside of my self. So I reframe the question: Why is money so important to God?

Four years ago I taught an adult (sunday school) class at my home church. The class was called Money and Eternity and it was based off the material in the book Money and Eternity by Randy Alcorn. I was just reviewing some of the slides from the class where we covered the answer to the why question.

Why is Money so Important to God?

Luke 19:1-10

What was the first area of Zaccheus’ life that was transformed by the miracle of his conversion? Money and Possessions

Why was that so amazing in his case? Jesus declared this man's salvation on the basis of his cheerful eagerness to part with his money – for the glory of God and the good of others.

Luke 18:18-30

What prevented the rich young ruler from receiving eternal life? Money and Possessions
Jesus in his commentary on the incident shows that love of wealth presents an impassible barrier to regeneration because the desire for riches is greater than the desire for forgiveness and heaven.

So then, why is money so important to God? Fill in the blank: Because money is _______________________________?

Wednesday, March 26, 2008

Gazelle Intensity Without Focus

FPU 10: From Fruition to Tuition

Retirement Planning and College Funding were the topics of this session. Ramsey spent 60% of the time walking through the basics of different types of tax-favored retirement plan options such as IRAs, 401(k)s, Roth IRAs, etc. True to his style, Ramsey is a teacher first and foremost and he covered the basics. I liked his approach at explaining retirement plans. I believe the illustrations helped my wife, which brings us both closer together in our financial planning language and communication. Essentially all retirement funding tools act as coats that wrap around long-term investments such as mutual funds. They get their names from their specific location in IRS tax code. For example, a 401k comes from section 401, subsection k. A Roth IRA is actually in the same rule section as a traditional IRA but with a few twists - that came from a US Senator with the last name of Roth. I love history. The other 40% of the sessions covered the same types of basics for college funding vehicles.

Retirement and College Planning are Baby Steps 4 and 5 respectively. Ramsey proposes that 15% of your income should be going toward retirement investments and then after that, whatever it takes, and whatever you have left over should go toward college planning. But first, this is key, baby steps 1, 2, and 3 must be completed in full. This one, at first, is hard to swallow - none of your household income is to be invested for retirement or college until after steps 1-3 are fully funded. This is not too hard for me to accept because I have not been funding retirement nor college. It's a tad harder to swallow if perhaps you are funding a 401(k) at work and your employer is contributing matching funds up to a certain percentage. Setting aside the current tax benefits of investing pre-tax money, the match is the most attractive element of the 401k - its a 100% return, it's free money. Nevertheless, Ramsey, with his Gazelle intensity mantra, advises to stop all funding to retirement so as to attack the emergency fund and debt snowball.

I am not compelled to argue against Ramsey's idea on simple mathematics - frankly, I believe depending on the right mix of assumptions, one could make a very strong mathematical case for either approach. What is most difficult for people to accept I think is related to the "feels like factor." It just feels wrong to not take advantage of an employer match which produces a 100% return. It seems contrary to common sense. Is Ramsey's no-holds-barred approach foolish? I don't think so. Given the fact that most people are so scattered financially and many statistics speak to the disarray, Ramsey's approach brings on intense focus. How badly do you want to get out of debt first?

I am not funding retirement. I want to. I should be. I also have four children and I should be setting something aside for their future education. But I am not. I could be splitting up the amount I am over funding my debt snowball and applying some toward retirement. Should I be? I just talked to a co-worker the other day who hinted at my foolishness. No matter what, I should be saving some for retirement - hands down, not saving is not an option. Here's the bottom line for me: If I were not committed to attacking my debt and I didn't have a plan to be debt free in less than two years, I would be investing more toward retirement. What it comes down to is how committed you are to getting out of debt. Ramsey doesn't suggest taking your sweet time. He says run away from debt with gazelle intensity. Three years from now I'll then switch to running with gazelle intensity by investing heavily toward retirement and college. I'll be 41 years old and by 65 there will be enough money, and I will be in a position to help all my children as they work themselves through college.

What Ramsey didn't cover is what's the purpose of retirement. Why retire? What does it look like? How does your purpose in life change once you are retired? This is what I think about today and my definition or retirement is not "So I don't ever have to work again.", or "I'll be financially independent." Here are some great thoughts. Retirement is another phase of life where I'll be serving God, loving others, and glorifying Him. I am not sure of the exact details but God's sovereign watch will make everything clear over time.

Another bottom line for me: I have closed an open loop - I am directly investing in my retirement and my children's education funding by getting debt free in the next two years. It used to be, in my mind, that these goals were either mutually exclusive or all equally important.

Tuesday, March 25, 2008

Murphy Came Around

In FPU lingo it's called "A visit from Murphy." In their very encouraging words, the folks at the LLNOE acknowledged Murphy's tendency to show up especially during baby step number 1 and 2. Thanks to everyone over there who are living it out everyday and pressing on.

I still need more time to clarify in my own mind some of the heart struggles I've been noticing in me as a result of this Murphy visit. I am very introspective so I've known about them but they're worse than I ever imagined. It's apparent, I quickly turned being debt free (a good thing) into an ultimate quest in my life (and that is a bad thing.) Anything that is given the place of ultimate and supreme in life has the power to enslave. Think about it. Money is not morally right or wrong, it is neutral. But the human heart makes moral choices 24/7. There is so much more going on here than just having to dish out $650 to fix a car. There is a battle raging. A struggle between the promise of money and debt freedom and trusting the God is sovereign and good. In this battle faith meets everyday life. The human soul is prone to turn anything good into an object of worship so much more quickly than I ever imagined.

I'll pick up the van this morning. I actually feel really great. Happy to write the check! We have the money and we're only dealing with one emergency here - not two, which would been the case if we didn't have the money.

Turns out too that we made a mistake when depositing money to open our emergency fund, we deposited $270 more than the $1,000. My wife and I are trying to figure out how this happened but I won't fret much more. We obviously had a little extra left over when we sold a bunch of stuff on craigslist. Also, by working our budget very tightly the last two months, we had already allocated $139 in a virtual envelope designated for car repairs. Because of these two blessings we'll only need to dip into the real emergency fund by $241. That amount will we refunded from my next paycheck. I am amazed!! Simply amazed! Frankly, I know I am revealing a lot about myself here, but two months ago I would have been fighting to find a way to either mentally and emotionally checkout (so to speak) for a day or two in order to recover from this train wreck or I would have made a dumb decision to go further in to debt.

Monday, March 24, 2008

The First Setback

Sometime today I'll be moving $650 from the emergency savings fund to our main checkbook account. From there, I'll pay the auto mechanic for the work he has done on our family van. We're getting two sway bar links replaced and four new tires. I knew we'd eventually need the tires but I was hoping to make it through the summer, giving us time to save. But, two of the tires are completely unsafe.

This little "setback event" has my heart and mind swirling all over the place right now. Inevitably, my wife and I will learn from this, if we focus on the right thing. That is, what God is up to in exposing the idols that we so easily place our trust in and what He has planned in the way of redirecting our hope toward only Him.

How I process through my thoughts and emotions in all of this will make for good blogging to say the least. I plan to share what I learn from this setback. To start things off, I'll just say this event is not mainly about the money we're losing, the step back that we are forced to take, or the frustration and stress that has entered my family's world today. This heat in our lives is nothing, nothing in relation to the other much more significant problems of living in a fallen world. Nevertheless, God is at work on my heart and that is where I want to grow more and see Him at work - that is what I'll blog about.

Saturday, March 22, 2008

FPU Update, Another $560 of debt paid off

My wife Carla dropped off a payment in the mail this morning - another $560 of debt paid. Since Feb 2, 2008 when we kicked our FPU drive in gear, we've saved $1,000 in an emergency fund. February 29th is when we really started attacking our debt - we've paid off a total of $2,849 in debt ($2,600 has been consumer debt.) We're going into week 10 of the classes next week...three more left and we graduate.

Back on January 14, 2008 I was no where near as focused as I am today. Back then, there was no way you'd be able to convince me we'd be where we are today. No way!

All our small, annoying debts are paid. The next one on the list has a current balance of $1,000 so it will take two months to pay off. The next debt after that is $2,700. The small success to date have created much needed enthusiasm

No FPU this week

There was no FPU class this week.

Tuesday, March 18, 2008

Sorry about the problems

If you use Internet Explorer, this blog should now display better for you. I apologize for the delay in getting the problem fixed. The issue was not reproducing in Firefox. Thanks to the readers who let me know.

Monday, March 17, 2008

Faith That Saves

An elderly woman gets robbed and lives out her faith with amazing grace!


In Case of an Emergency

My wife and I are happy with the progress we've made since enrolling in Financial Peace University. In the last 60 days we have saved $1,000 into a short term emergency fund and paid off $1,700 in debt above the minimum payments. We're excited too that this week we'll knock off another small outstanding debt in the amount of $560. To us our movement is a really big deal - 60 days ago my attitude was hopeless.

What happens if we have to dip into the $1,000 Emergency fund?

The plan is to replenish the fund as fast as possible. How? We'll stop over funding our debt snowball until the emergency fund is back to $1,000. Right now we're applying $485 per month toward the debt snowball, so if we had to clean out the fund, we'd be back in good shape very shortly. This is our immediate plan at least.

With four children, an older home, and greater than ten year old cars I want a better emergency plan. I am toying with the idea of building the fund by at least another $1,000 and then resuming the debt snowball over funding. I'm thinking.

Friday, March 14, 2008

Money and the Heart

If you've been around this blog for long you may have noticed that I like to ask why. Specifically, I like to know and understand why people do what they do. Why I do what I do. I am very interested in motivations of the heart. From the heart comes forth all actions in daily life. I am no expert but I just enjoy the study.

I have come to deeply understand, by difficult circumstances and foolish decisions, a key truth about money and motivation. I am still growing in this truth and I wish I didn't have to be reminded of it all the time: How I handle money is a direct window into the condition of my heart and its stance toward God. This truth applies even to the "good" things I do with money (i.e. paying off debt and giving.)

Quotes on Money and the Heart:

A man’s treatment of money is the most decisive test of his character- how he makes it and how he spends it.

James Moffatt

People are funny; they spend money they don’t have to buy things they don’t need to impress people they don’t like.

Author Unknown

The use of your money and how you give it is one of the best ways of evaluating your relationship with Christ and your spiritual trustworthiness. If you love Christ with all your heart, your giving will reflect that. If you love Christ and the work of His Kingdom more than anything else, your giving will show that. If you are truly submitted to the lordship of Christ, if you are willing to obey Him completely in every area of your life, your giving will reveal it. We will do many things before we will give someone else, even Christ, the rights over every dollar we have and ever will have. But if you have done that, it will be expressed in your giving. That’s why it’s said that your checkbook tells more about you than almost anything else.

Donald Whitney

Spiritual Disciplines for the Christian Life, 1991, p. 146, Used by permission of NavPress –, All rights reserved. For more information please see the website

The reason use of money and the things it buys is one of the best indicators of spiritual maturity and Godliness is that we exchange such a great part of our lives for it. Because we invest most of our days working in exchange for money, there is a very real sense in which our money represents us. Therefore, how we use it expresses who we are, what our priorities are, and what’s in our hearts. As we use our money and resources Christianly, we prove our growth in Christlikeness.

Donald Whitney

Spiritual Disciplines for the Christian Life, 1991, p. 140, Used by permission of NavPress – All rights reserved. For more information please see the website

God owns it all and (you) are stewards of His resources...Because you are stewards of the resources God has entrusted to you, every financial decision you make is actually a spiritual decision. For many, that's a revolutionary concept. How you manage your finances is a pretty good barometer for the condition of your spiritual life.

Dennis Rainey

Preparing for Marriage, 1997, p. 195, 198, Gospel Light/Regal Books, Ventura, CA 93003, Used by Permission

Jesus Christ said more about money than about any other single thing because, when it comes to a man's real nature, money is of first importance. Money is an exact index to a man's true character. All through Scripture there is an intimate correlation between the development of a man's character and how he handles his money.

Richard C. Halverson

God can have our money and not have our hearts, but He cannot have our hearts without having our money.

Kent Hughes

Disciplines of a Godly Man, Crossway Books, 1991, p. 186.

Thursday, March 13, 2008

Debt Snowball Calculator

Here is a fantastic tool to create your own plan:

Debt Snowball Calculator

Run the numbers!

What's it going to take for you to be debt free (except mortgage) in 3 years or less? Let me know.

FPU Session 9: Of Mice and Mutual Funds

This session was all about the basics of investing - diversification, risk, reward, liquidity, compounding interest. The presentation mentioned the range of investment types available: money markets, single stocks, bonds, mutual funds, annuities, real estate and horrible investments (gold, commodities, futures, day trading.)

Typical to all the sessions so far in FPU, Ramsey's number one rule is KISS (keep it simple stupid) and that is why he loves mutual funds. It was obvious that his idea of the best long term investment strategy for the typical middle-income family is a balanced portfolio of mutual funds. I agree. From the KISS perspective one should only invest in something they understand. Mutual funds tend to be the best option for most people.

I did not struggle with the concepts presented in this session. I worked for nearly a decade in the investment and insurance business and this session served as quick refresher for me. I do believe my wife was introduced to some new ideas and I think she was helped by Ramsey's explanations. During the entire hour my mind seemed to focus on what my family is not doing in this area of our financial life and I could feel the anxiety cooking.

At this point my family is not allocating one single dollar to long-term investing. This has really bothered me the last few years. Until I started in FPU, my excuse for not investing was always "We don't make enough money. If we had more income, we could invest like we should be doing." Now, we don't have an excuse, we have a plan. The reason we are not investing is because we are paying off debt. When all our consumer debt is gone at the end of 2010, we'll build up our emergency fund to three to six months of income, and then we'll starting investing. With the plan anxiety is killed and intense focus becomes the strategy. I used to think we needed to be doing both, paying off debt and investing - of course we don't make enough income to do both!

As soon as we get out of debt, we can apply all our monthly debt snowball payments to long-term investing. We need to get out of debt as fast as possible. It's astounding what we can do! I no longer feel defeated by thoughts of what we are not doing.

Monday, March 10, 2008

Stressed Out By Maxed Out

Saturday nights, after the kids are bathed and tucked in, my wife and I tuck ourselves in, with the laptop, and catch a movie. This last weekend we borrowed Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders from Brandy.

As a rule I like documentaries. I liked Maxed Out. I am not going to review the whole flick here but make sure you check out the links below to some other reviews on the net. When you factor in the whole daylight savings spring ahead lose an hour of sleep thing, I lost probably four hours because this movie stressed me out. I disagree with all reviews that proclaim this movie is hilarious or entertaining - that's just mind boggling. I agree though with Brandy that its not too over the top to proclaim this movie is life changing.

I guess I wasn't expecting the anxiety but I realize it centered on my children. I lay stunned in bed driven by thoughts of how to help them from getting trapped by credit cards and debt as a whole. I'll settle down in the next couple of days and have a specific plan.

Maxed Out is required watching.

Trailers and Clips:
Maxed Out Website

Get Rich Slowly
Rotten Tomatoes
Washington Post

The Book:
Brandy shared her thoughts after having read the book.

Friday, March 07, 2008

Debt Snowball, The Kids Have Eyes and Ears

The kids are on board now with our family's mission to eliminate our debt, our frontal assault. I have not done any direct teaching with them which is usually my tendency. For now they've engaged themselves in the process. Could it be because my wife posted our snowball plan on the kitchen cupboard?

This week while driving to a child event:
Sarah: "Dad, you know this debt snowball thing? When you and Mom are done, can we go on a vacation to Disneyland."

Me: "That would be excellent, sweetie!"

Sarah: (In typical quick-thinking-strike-while-its-hot-she'll-be-in-sales fashion) "This summer?"
Man I wish! If I had a credit card I'd be tempted to charge it just for my sweetie.

While driving away from the window at McDonald's:
Josh: "Dad!! Did you just charge that? Did you just go into debt for Happy Meals?"

Me: "No son, I used the Debit card."

Josh: "Dad?! The card said Mastercard! Are you sure? I think you charged it."

Me: "No son, Debit means cash. There is cash in the bank to pay for that meal."

Josh: "How do you know how much cash is in the bank."

Me: "We keep a budget and watch it very closely.'

Josh: "What's a budget?"
On and on the conversation went until we pulled in the driveway. Josh is a thinker and invites my direct teaching - he's also a challenger and it helps keep me sharp. Our sit down McDonald's meal lasted 2.34859 seconds leaving me feeling guilty that I fed poison to my children again and dropped a $20 at the altar of ease.

Thursday, March 06, 2008

In Debt, Taking Inventory

There is an abundance of information and resources today to help one get out of debt, not that they are all good options, but nevertheless, asking "How to get out" is easily answered. Plans are drawn up. Systems are created. Actions are taken. Hope seems to strengthen. But obstacles, or as my employer likes to correct me with, opportunities arise that help you improve your skills in matching your talk with your walk. When times are tough taking on more debt just to get through seems viable. In order to avoid more debt I need to know my deeper motivation. In order to persevere I like to ask why.

Why My Family Got In Debt

It's all my fault. It has happened over the years. At times big chunks of debt but mostly it happened with each slow leak freezing itself to the ice block of our enlarging debt balance. I was the one that made all the final decisions to live with a leaking faucet. My wife is very thrifty and on her own would turn to debt as the only last option. I can't ever remember her saying "Oh, let's just charge it."

I allowed my family to go further into debt by first and foremost believing promises which are really only lies. On the surface I knew I was placing more burden on my family but I never slowed down enough to sincerely consider the extreme long-term shadow of limitations debt would cast years in to the future.

The promises of a good life offer some truth strong enough to veil the profound lies of debt slavery. For example, debt is a tool and can be used effectively to build a good life. In personal finance, this truth is very thin and the promise is not global enough in scope, thus it should, I think now, only be applied to certain contexts (i.e. a mortgage) Also, the idea that debt is paid off as planned is absurd. Loans come with an end date, when it all must be paid back, everything is disclosed. For most, I think this creates a false sense of pride and believability that one will actually pay off the entire amount as planned and then be free of the burden. What I think is more realistic is debts are just rolled around from bank to bank, never decreasing but only increasing. If people are responsible enough to pay as planned then I guess I need to re-interpret the stats I presented yesterday?

I got into debt because I believed lies, which at first glance appeared as promises.

Why We Want To Get Out Of Debt As Fast As Possible

I am still working on this list but here's a few reasons:

  1. My family will be relationally stronger.
  2. Resources are tied up and unavailable for much greater purposes. Sometimes the guilt is overwhelming.
  3. I want to live in reality. Debt seems to evoke denial.

Wednesday, March 05, 2008

The Good Life (On Credit), Staggering Stats

  • There are over 1.3 billion credit cards in circulation in America.
  • The total American consumer debt is more than 2.7 trillion.
  • The credit card industry takes in $43 billion per year in additional, unexpected fees from the consumer, such as late payment, over-the-limit, and balance transfer fees. Late fees alone bring in more than $11 billion.
  • The average household credit card debt has increased approximately 167% in the past 17 years.
  • It would take over 13 years to pay off the average credit card balance if only making minimum monthly payments of 4% at an average interest rate of 15%.

My son, if you have put up security for your neighbor,
if you have struck hands in pledge for another,
if you have been trapped by what you said,
ensnared by the words of your mouth,
then do this, my son, to free yourself,
since you have fallen into your neighbor's hands:
Go and humble yourself;
press your plea with your neighbor!
Allow no sleep to your eyes,
no slumber to your eyelids.
Free yourself, like a gazelle from the hand of the hunter,
like a bird from the snare of the fowler.
(Proverbs 6:1-5, New International Version)
The stats come from FPU participants manual.

Tuesday, March 04, 2008

FPU 8: How to Buy Only Big, Big Bargains

One of the tag lines for Financial Peace University is "If you live like no one else, later you will be able to live like no one else." In this session Ramsey presents a few ideas on what this phrase means in practical terms. He teaches three keys to saving money on larger purchases by finding bargains.

Great deals can be found if you set out with the right intent to be truthful, to be harmless, and to create transactions that are good for both parties. The keys to good deals are:

1. Negotiate everything (that's everything)
2. Be patient
3. Get knowledge

I enjoyed this session because of the story telling. More or less it was about building the confidence to ask for deals. You always have to ask and cash helps. Dave loves cash. Cash presents a certain purchasing power still in this credit economy. I agree with Ramsey, although only in principle because I've never really had cash to swing the bigs deals.

My cynical mind asks "Yeah but how much cash do you really need to be able to reel in the big ones?" Also, Dave makes negotiating look really easy but how do you deal with situations where the other party is just as good of a negotiator as you try to be. I've been in and out of sales throughout my career and negotiating is an art for sure. There are principles that help but realistically, patience plays a major factor, more than the power of cash I believe.

The last big deal I reeled in was a refrigerator. We upgraded from a 35 year old to a 10 year old for $80. At an appliance refurb shop I would have paid $250 at least. The seller had it listed on craigslist for $100. I showed him $80 cash and he took it. It matches perfectly with the stove too!

Monday, March 03, 2008

Ramsey on Dumping Debt

We're paying off a small debt today. $371.18 that's been hanging on for a few years by minimum payments. This week I believe we'll also knock off a few other small debts totaling close to $500.

The Dumping Debt session in Financial Peace University rattled me, shook me up. God used it to peel the blinders off and inspire me. I found the entire session on YouTube.

Part 1

Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Part 8
Part 9

Up until Feb 2, 2008, I would have left the $371.18 in our family checking account to build up our cash "cushion" so that we'd have some "float" in between paychecks. I never wanted to consider why I was always building up the float money and never seeing the cushion. Sloppy budgeting ate it up each week. With the initial $1,000 emergency fund and a zero-based budget, that excuse is out the window. PAY OFF THAT DEBT!