Hope for your financial life and beyond

3 Reasons Credit Cards Didn’t Work For Me

Credit Card TrapTo use credit cards or not? That is the question.

Like most of you, I have placed a good many credit cards in my wallet through the years. I believed what every American hears – that using credit is convenient, it’s safer than carrying cash or debit cards, and there is protection on large purchases. I also figured I needed one for emergencies, and of course to improve my credit score for those all-important car and home loans.

Good people come down on both sides of this question and the purpose of this writing is not to discuss the pros and cons of each position. Rather, I would like to share with you why, after years of using credit cards for EVERY purchase, I just finally decided it wasn’t for me. I just couldn’t get past these three issues in my life.

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How to Get the Most Out of Christmas

I know stores already have decorations on display, but for me, Saturday, December 1st will officially begin the start of the 2012 Christmas season. In the next 25 days, we will attempt to cram more into each 24-hour day than is usually desirable. For me, the annual cramming revolves around two specific lists – my December “To Do List” and my December “Present Wish List.”

The “To Do List” for December is very important for me because as a teacher I receive a two-week vacation as school is out of session for Christmas break. (Not really a vacation because I take care of our four kids.) This gives me a greatly needed window of time to catch up on tasks at home. “Yes dear, I am putting that storm door up soon.”

The “Present Wish List” is all about what I would like to receive on Christmas day during our annual gift exchange.

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Forget Me Not

“For the needy shall not always be forgotten; the expectation of the poor shall not perish forever.” – Psalm 9:18

It has been a horrific week in the northeast. In case you missed it, Hurricane Sandy ripped through New Jersey and New York, devastating the region. Many lives have not returned to normal as they are still lacking some basic necessities of life like food and shelter. Other lives will never return to normal as they have lost loved ones to this epic storm.

With power still not restored in some places and gas in short supply, the coming days will still present a high degree of challenge for those who are assisting in the relief efforts. But this week might prove to be even tougher for the affected residents of the east coast for an entirely different set of reasons.

America is moving on to a different news cycle.

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Scary College Debt Statistics

In case you missed it, the cost of a college education is increasing dramatically. Public and private colleges alike are increasing tuition significantly, many because of state budget cuts. This has left many high school seniors in a bind. For years they have heard the media, their parents, their teachers and counselors say the best way to get a decent job with good pay is to earn a college degree. But now they wonder how they can afford it.

The Institute for College Access and Success’ Project on Student Debt conducted a recent survey that gives us insight into how students are paying for a college education. The results are astonishing and scary.

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Should I Borrow Money to Get What I Want?

borrow moneyWe live in a “Have It Now” culture that screams, “Borrow money now to get what you want!”

We want our fast food within 5 minutes or less in the drive-thru.  We want to make quick money for as little work as possible. We drive fast cars so we can get to our destination sooner. We are first in line for the newest technology gadget the day it is released. Can’t wait…gotta have it.

This “Have It Now” culture has also skewed our reasoning ability, in that it has masterfully helped us change our “wants” into “needs.”

We no longer want the new bass boat – it is a need.

We no longer want the week-long cruise to Bermuda – it is a need.

We no longer want the $5,000 Hall of Fame rookie card – it is a need.

We no longer want…(fill in yours here)…it is a need.

Borrow Money to Get What We Want

Think through all of your major purchases in the past year. How many of them would truly be classified as “needs?”

Put these two things together – getting what we want quickly and “wants vs. needs” – and a real problem begins to arise for most everyone in society. We don’t have the money to pay for these items!

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A Giving Spirit Is the Path to Friendship

I love the book of Proverbs. One reason is because Solomon filled it with so many one-liners. (I read a post once on Jon Acuff’s Stuff Christians Like blog how he describes Proverbs as the original Twitter. That’s pretty cool.) Most of the one-liners are fairly easy to digest and interpret…pretty straightforward. But once in a while, you are not exactly sure what he is trying to say. Or maybe he is trying to say multiple things in one tweet. I think that may have been the case in Proverbs 19:6 when he says,

“Many entreat the favor of the nobility, and every man is a friend to one who gives gifts.”

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Surety: How to Get Out of a Cosigned Loan

The idea of becoming surety for a stranger, friend or family member has not been spoken highly of in the Bible. We have been warned about the potential dangers and risks involved in doing so. Despite these warnings, there will still be some people who think their situation is unique and choose to vouch for the debt obligation of someone else by cosigning for them. It is unfortunate that they would ignore this wisdom and put themselves at risk for financial and emotional harm.

So what do you do if you become surety for someone? Is there a way out if you regret your decision? Well again we turn to the wisest man who ever lived.

Deliver Yourself From a Cosigned Loan

In Proverbs 6:1-5, Solomon addresses this situation by saying,

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Surety: The Potential Costs of Cosigning a Loan

Any good professional financial planner would tell you their primary goal is to create financial security for their clients. They would organize your investments in such a way as to produce that desired outcome. They would also counsel you the best path to establishing financial security is to engage in wise personal behaviors. In other words, don’t do anything in the present to damage your financial picture and thus jeopardize a secure future.

The fact of the matter is, when you become surety (going into debt, cosigning) for another, it puts you at risk in the present. It is the risk you take that could have devastating affects on your long-term financial picture.

Words from Solomon on Surety

Solomon about surety often and he clearly did not think it a wise financial move.

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Surety: Do You Really Want to Cosign That Loan?

There is a curious money word in the Bible – found mostly in Proverbs – that needs some defining. It’s the word “surety.” Surety refers to the act (or promise) of a person to take on or assume the responsibility for the debt obligation of someone else if that person cannot repay their loan. In essence, you become the guarantor of the loan by being willing to provide this service.

This type of arrangement is most common when the lender of money has a question or some doubt the borrower may be able to repay the loan. So they will require a third party (you the guarantor) to step forward and legally enter into the borrowing contract. The lender does this to reduce their risk and, in some cases, this may actually lower the interest that is charged to the borrower.

An Example of Surety

So, for example, your son wants to buy a $8,000 car.

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Living Life With An Open Hand (Part II): How to Properly Control Money

In the post Giving to the Needy, we saw how God wants us to relate to those who may be less fortunate. We saw from Deuteronomy 15:7-10 that God commands we give to them. Our hearts should be sensitive to their need and we should give freely, generously and cheerfully.

The main point of these verses is that in our relationship with the poor we should not forget to give to them. But I can’t help but feel there is something deeper here that speaks to an internal attitude that has the potential to cripple our ability to truly prosper and be blessed. It’s found in the phrase “open your hand.”

I have a little exercise for you.

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Living Life With an Open Hand (Part I): Giving to the Needy

We live in a socioeconomic divided world. There are the “haves”, the “have-nots” and the “have-in-betweens.” Your status, in regards to wealth, can determine how much influence you have, how much access you have to important people, and how many things you can buy for yourself. It is a measure of your success, power and importance. You are somebody if you have money, and you are nobody if you have none. At least that is how most of the world sees it.

So we have this financial asset disparity present in our world, yet we all, rich and poor alike, have to share the same space. We only have one earth. With that being the case, unless NASA (or Sir Richard Branson) decides to start a colony on the moon where only the rich will be able to afford the space ride, we are stuck with one another. That means we will have to figure out how to coexist peaceably, figure out how to treat one another, and figure out what our responsibilities are to those who have more or less than we do. And we already have seen how hard relationships can be. 

The Bible’s Take on Giving to the Needy

The Bible weighs in often on how the rich should treat the poor. Perhaps no verse better sums it up than Deuteronomy 15:7-10 which reads:

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