Congratulations to the Dave Ramsey team!
If you haven't heard already, Dave will be on cable soon. Too bad I don't have cable!
http://www.daveramsey.com/etc/cms/dave_fox_business_network_7703.htmlc
Thursday, September 27, 2007
Monday, September 17, 2007
Guest Post Time!
No, this is not Debra...she was good enough to let me take time from chattering about who would win, Eastwood vs. Mifune, on my blog to talk about something debt-related on here.
Anyway, we were having a discussion on the morality of debt. Is debt sinful? Is it wrong to have debt, or to take on debt? ¿Qué dice la Biblia?
This is the commonly cited text among those inclined to say borrowing is sin. It certainly states its point bluntly enough, but as KCBTers will no doubt recall, the three rules of Bible study are 1. Context, 2. Context, and 3. The Minor Prophets Are Not That Boring, Honestly. So with that in mind let's check out the context!
It doesn't appear to me that verse 8 is the beginning of an unrelated thought; in context with verse 7 it makes perfect sense. Paul is exhorting Christians to give those in authority the taxes AND the honour that they are due. Basically, don't stiff the IRS! If you owe them taxes, pay them. If you owe anyone anything, see that you pay it. Don't borrow $20 from your friend and fail to pay it. To me these seem to deal more with the idea of some extreme forms of bankruptcy, than the immorality of lending and borrowing, but that is an entirely different, and hairier, discussion. With this context I could agree that verse 8 specifies a command, disobedience to which would be sin, because the non-payment of a debt to one's neighbor is tantamount to stealing from him, just as the past promise that one would pay is retroactively turned to an instance of bearing false witness.
That said, I do think the Bible has a lot to say about the foolishness of debt. The Proverbs are packed to the sodding brim with comparative statements on how the wise man and the fool handle their respective finances, the latter being quick to waste, spend, borrow, and cosign! I think these sorts of admonitions are more principles and warnings than commandments; obviously the Bible doesn't say you should not spend money, but it warns that if you spend too freely you may end up poor, and a fool! There is no arbitrary point of what level of spending is foolish and what is within the parameters for wise money handling, but it is a general guiding principle. Likewise I believe that borrowing persay is not sin, but is a practice that can be easily abused.
As an illustration, imagine a credit card as a loaded gun. In the hands of a majority of people, it represents a grave danger, both to themselves and their family, if they are ignorant of its operation and not of a temperament such to safely own and operate it. There is a minority (police officers for example) that are able to use it properly and safely, and in their hands it poses no potential for evil. The gun/credit card is amoral in this manner; there is nothing inherently evil in either the gun or the credit card, but both are capable of great evil if they fall into the hands of either an evil person or an ignorant person. Perhaps we should have a 21 year old age requirement, background checks, and a seven day waiting period for credit cards?
The philisophical problem that brought me to this discussion was the idea of mortgages. Ramsey is on record as being in favour of buying a house in cash, but making allowances for mortgages and recommending the 15-year (I recommend the 15-year too...Laphroaig 15-year, that is)(wacka wacka). Having heard from some corners of Christendom that debt is sin, this attitude kind of broke my brain temporarily. If debt is sin, it is sin, and it doesn't matter if you borrow 50 cents for a coke, borrow $2000 for a vacation, or $100K for a house, it is the same. So take the following example:
Mr. A: Excuse me, Mr. B, could I borrow pencil my good man?
Mr. B: Well...no actually. I would find that outrageously immoral.
Mr. A: I really just need it for a second to fill in this form, are you sure?
Mr. B: Sorry, all lending is wrong according to the Bible; I'd be more than happy to give it to you, but I still need it for this afternoon.
Mr. A: Well, blast it, I've got to go back downstairs to my desk and get another then.
Mr. B: Hang on a second! Perhaps I could simply give it to you, and then you could decide a few minutes later to give ME the pencil in kind?
Mr. A: Oh, great! Thanks very much! I'll have it back to you shortly!
Mr. B: Well, I certainly outfoxed God, didn't I! He never should have made me so smart!
It's a silly illustration, but if you adopt the belief that borrowing and lending is innately immoral and sinful, you will either believe lending a pencil to a friend is sin, or you will attach a clause to that belief allowing for exceptions such as this one, which opens up a logical hornet's nest so to speak.
Pardon the lack of direction in the post, I'm flitting back and forth like a luded-up hummingbird. Basically, as I read it, the Bible doesn't say you are committing sin if you dive headfirst into the Deep End of the Debt Pool. It just says you are an idiot. I'm not sure which is harder to hear!
Feel free to discuss, chastise, take issue, rebut, agree, excoriate, or wage intellectual jihad on me in the Comments section; honestly I'm not at all as certain on these things as I sound, and I'm open to learning I had it all (or partially) wrong. It is a confusing topic and the lack of cohesiveness in my post is symptomatic of my tenuous grasp of the subject.
Cheers,
The Irascible Neufonzola
Anyway, we were having a discussion on the morality of debt. Is debt sinful? Is it wrong to have debt, or to take on debt? ¿Qué dice la Biblia?
Owe no man any thing, but to love one another: for he that loveth another hath
fulfilled the law. Romans 13:8
This is the commonly cited text among those inclined to say borrowing is sin. It certainly states its point bluntly enough, but as KCBTers will no doubt recall, the three rules of Bible study are 1. Context, 2. Context, and 3. The Minor Prophets Are Not That Boring, Honestly. So with that in mind let's check out the context!
Render therefore to all their dues: tribute to whom tribute is due; custom to
whom custom; fear to whom fear; honour to whom honour. Romans 13:7
It doesn't appear to me that verse 8 is the beginning of an unrelated thought; in context with verse 7 it makes perfect sense. Paul is exhorting Christians to give those in authority the taxes AND the honour that they are due. Basically, don't stiff the IRS! If you owe them taxes, pay them. If you owe anyone anything, see that you pay it. Don't borrow $20 from your friend and fail to pay it. To me these seem to deal more with the idea of some extreme forms of bankruptcy, than the immorality of lending and borrowing, but that is an entirely different, and hairier, discussion. With this context I could agree that verse 8 specifies a command, disobedience to which would be sin, because the non-payment of a debt to one's neighbor is tantamount to stealing from him, just as the past promise that one would pay is retroactively turned to an instance of bearing false witness.
That said, I do think the Bible has a lot to say about the foolishness of debt. The Proverbs are packed to the sodding brim with comparative statements on how the wise man and the fool handle their respective finances, the latter being quick to waste, spend, borrow, and cosign! I think these sorts of admonitions are more principles and warnings than commandments; obviously the Bible doesn't say you should not spend money, but it warns that if you spend too freely you may end up poor, and a fool! There is no arbitrary point of what level of spending is foolish and what is within the parameters for wise money handling, but it is a general guiding principle. Likewise I believe that borrowing persay is not sin, but is a practice that can be easily abused.
As an illustration, imagine a credit card as a loaded gun. In the hands of a majority of people, it represents a grave danger, both to themselves and their family, if they are ignorant of its operation and not of a temperament such to safely own and operate it. There is a minority (police officers for example) that are able to use it properly and safely, and in their hands it poses no potential for evil. The gun/credit card is amoral in this manner; there is nothing inherently evil in either the gun or the credit card, but both are capable of great evil if they fall into the hands of either an evil person or an ignorant person. Perhaps we should have a 21 year old age requirement, background checks, and a seven day waiting period for credit cards?
The philisophical problem that brought me to this discussion was the idea of mortgages. Ramsey is on record as being in favour of buying a house in cash, but making allowances for mortgages and recommending the 15-year (I recommend the 15-year too...Laphroaig 15-year, that is)(wacka wacka). Having heard from some corners of Christendom that debt is sin, this attitude kind of broke my brain temporarily. If debt is sin, it is sin, and it doesn't matter if you borrow 50 cents for a coke, borrow $2000 for a vacation, or $100K for a house, it is the same. So take the following example:
Mr. A: Excuse me, Mr. B, could I borrow pencil my good man?
Mr. B: Well...no actually. I would find that outrageously immoral.
Mr. A: I really just need it for a second to fill in this form, are you sure?
Mr. B: Sorry, all lending is wrong according to the Bible; I'd be more than happy to give it to you, but I still need it for this afternoon.
Mr. A: Well, blast it, I've got to go back downstairs to my desk and get another then.
Mr. B: Hang on a second! Perhaps I could simply give it to you, and then you could decide a few minutes later to give ME the pencil in kind?
Mr. A: Oh, great! Thanks very much! I'll have it back to you shortly!
Mr. B: Well, I certainly outfoxed God, didn't I! He never should have made me so smart!
It's a silly illustration, but if you adopt the belief that borrowing and lending is innately immoral and sinful, you will either believe lending a pencil to a friend is sin, or you will attach a clause to that belief allowing for exceptions such as this one, which opens up a logical hornet's nest so to speak.
Pardon the lack of direction in the post, I'm flitting back and forth like a luded-up hummingbird. Basically, as I read it, the Bible doesn't say you are committing sin if you dive headfirst into the Deep End of the Debt Pool. It just says you are an idiot. I'm not sure which is harder to hear!
Feel free to discuss, chastise, take issue, rebut, agree, excoriate, or wage intellectual jihad on me in the Comments section; honestly I'm not at all as certain on these things as I sound, and I'm open to learning I had it all (or partially) wrong. It is a confusing topic and the lack of cohesiveness in my post is symptomatic of my tenuous grasp of the subject.
Cheers,
The Irascible Neufonzola
In case of emergency
Okay, first off, I have to apologize - I get a little crazy sometimes and I love this subject so much that I can come across as a know it all, a crazy person, and a jerk all at the same time. I get so wrapped up in wanting to bury you with information that I forget to ask questions! Had I been thinking yesterday, I would have asked "what emergency are you worried about?" The three biggies: Medical emergencies, car repairs, house repairs.
Out of the three listed about, only one is a true emergency. Which one? Medical. Because we all know our bodies are going to break down, but the extent of our bodies breaking may not really be conceivable. You could easily rack up thousands of dollars in medical bills. Hopefully you have health insurance which transfers some of the risk to your insurance company. But even with health insurance, a 20% co-pay could mean a $10,000 medical bill. Emergency, you bet! Will your $1000 BEF cover it, not really. But guess who is awesome about settling bills and taking payments - the medical industry! Worst case scenario, you make payments to the hospital that saved your life. That's the one place I wouldn't mind making payments to!!
Car repairs - I know, they seemed like an emergency all those times you needed to fix your car and you were broke and didn't have the money to do it. Car repairs are not emergencies. Nope! If you know that you average $1200 in repairs a year, then car repairs need to be a part of your budget. You will want to set up a sinking fund of $100 a month just for car repairs. This is different than an emergency fund. An emergency fund is for unforeseeable events. Cars break down. We all know that. So therefore, not an emergency. Go ahead and save for it, but don't call it a part of your emergency fund. It's your car maintenance sinking fund.
House repairs - if you are renting, good for you!!! You are in a good position in that you don't have to pay for repairs. Thank your lucky stars because house repairs are pricey!! Again though, house repairs are to be expected. If you know your roof is old, and you will need to replace it in a few years, then yes, by all means, add that to your budget and start saving for it. But don't call it an emergency. An emergency, when it comes a home, is a fire, lightening strike, flood etc. In which case, hopefully you have good insurance to transfer some of the risk to your insurance company. If something trully catastophic happens, you will only need to pay your deductible. See? House repairs are not an emergency.
What if I don't have enough in my budget to cover sinking funds? What we did, is we didn't start sinking funds until just recently. But what I would suggest, is focus on getting one or two of your smallest debts paid off to give you some breathing room in your budget, THEN start sinking funds. Does this make sense?
For instance, if you have a snowball of $1000 a month, dude, go ahead and set up a sinking fund for car repairs! But if you have a snowball of $50 a month, then go ahead and focus on knocking out your smallest debt with that $50. Also, start selling stuff. Clothing, tv's, DVD's, furniture, whatever you can! Get that snowball up because the faster you get some breathing room in your budget, the sooner you can start saving up for the non-emergencies that will visit you!
What would Nic and I do if we had a true emergency? We would sell our stuff like crazy. Before we would ever go into debt, you better believe that we would not own much except maybe some clothing.
Here's what we would sell in the case of a true emergency:
1. Dining room set - would probably sell quickly for $500
2. Guitars, amps, pedals - I have no idea what these would go for, but we could get some money quickly.
3. Two bedroom sets, all of which were free to us but in really nice condition - probably could get $400
4. Couches - would not bring a lot since they were used when we got them, but hey, $50 is $50
5. Car - sell it, walk to work, car pool to church. Yep....we would do this. Maybe buy a beater for $500 which means saving the difference of our car which is worth more than that.
6. House - if it came down to it, we would sell and rent. You can rent a nice studio apartment in Raytown for $400 a month. Sweet!
Okay, I know this is a long post, but I had to get it out. I do not ever want to go into debt again, and I am willing to be a crazy person to not do it!
Okay, I'm done....thanks for reading!
Out of the three listed about, only one is a true emergency. Which one? Medical. Because we all know our bodies are going to break down, but the extent of our bodies breaking may not really be conceivable. You could easily rack up thousands of dollars in medical bills. Hopefully you have health insurance which transfers some of the risk to your insurance company. But even with health insurance, a 20% co-pay could mean a $10,000 medical bill. Emergency, you bet! Will your $1000 BEF cover it, not really. But guess who is awesome about settling bills and taking payments - the medical industry! Worst case scenario, you make payments to the hospital that saved your life. That's the one place I wouldn't mind making payments to!!
Car repairs - I know, they seemed like an emergency all those times you needed to fix your car and you were broke and didn't have the money to do it. Car repairs are not emergencies. Nope! If you know that you average $1200 in repairs a year, then car repairs need to be a part of your budget. You will want to set up a sinking fund of $100 a month just for car repairs. This is different than an emergency fund. An emergency fund is for unforeseeable events. Cars break down. We all know that. So therefore, not an emergency. Go ahead and save for it, but don't call it a part of your emergency fund. It's your car maintenance sinking fund.
House repairs - if you are renting, good for you!!! You are in a good position in that you don't have to pay for repairs. Thank your lucky stars because house repairs are pricey!! Again though, house repairs are to be expected. If you know your roof is old, and you will need to replace it in a few years, then yes, by all means, add that to your budget and start saving for it. But don't call it an emergency. An emergency, when it comes a home, is a fire, lightening strike, flood etc. In which case, hopefully you have good insurance to transfer some of the risk to your insurance company. If something trully catastophic happens, you will only need to pay your deductible. See? House repairs are not an emergency.
What if I don't have enough in my budget to cover sinking funds? What we did, is we didn't start sinking funds until just recently. But what I would suggest, is focus on getting one or two of your smallest debts paid off to give you some breathing room in your budget, THEN start sinking funds. Does this make sense?
For instance, if you have a snowball of $1000 a month, dude, go ahead and set up a sinking fund for car repairs! But if you have a snowball of $50 a month, then go ahead and focus on knocking out your smallest debt with that $50. Also, start selling stuff. Clothing, tv's, DVD's, furniture, whatever you can! Get that snowball up because the faster you get some breathing room in your budget, the sooner you can start saving up for the non-emergencies that will visit you!
What would Nic and I do if we had a true emergency? We would sell our stuff like crazy. Before we would ever go into debt, you better believe that we would not own much except maybe some clothing.
Here's what we would sell in the case of a true emergency:
1. Dining room set - would probably sell quickly for $500
2. Guitars, amps, pedals - I have no idea what these would go for, but we could get some money quickly.
3. Two bedroom sets, all of which were free to us but in really nice condition - probably could get $400
4. Couches - would not bring a lot since they were used when we got them, but hey, $50 is $50
5. Car - sell it, walk to work, car pool to church. Yep....we would do this. Maybe buy a beater for $500 which means saving the difference of our car which is worth more than that.
6. House - if it came down to it, we would sell and rent. You can rent a nice studio apartment in Raytown for $400 a month. Sweet!
Okay, I know this is a long post, but I had to get it out. I do not ever want to go into debt again, and I am willing to be a crazy person to not do it!
Okay, I'm done....thanks for reading!
Saturday, September 15, 2007
3 posts in one day?
Yes!
Sorry, it was about time for some links....
This article, wow.
I haven't mentioned this yet, but for a free, awesome forum, go to www.llnoe.com
Hopefully someday I will be able to donate to the forum. It's been a great help!
Yet another month has gone by that we did not utilize Angel Food Ministries. Maybe next month. I just can't get my act together on that one. I really do want to try it out so I can review it on here. Maybe in October?
Okay, seriously, I'm done.
Sorry, it was about time for some links....
This article, wow.
I haven't mentioned this yet, but for a free, awesome forum, go to www.llnoe.com
Hopefully someday I will be able to donate to the forum. It's been a great help!
Yet another month has gone by that we did not utilize Angel Food Ministries. Maybe next month. I just can't get my act together on that one. I really do want to try it out so I can review it on here. Maybe in October?
Okay, seriously, I'm done.
Financial goals
Here are my goals for the future. God only knows if we will achieve them, but it's good to set goals even if you don't reach them. Right?
1. Buy a 2nd car with cash in November or December 2007 - and get a GOOD deal. Definately walking in with cash and we WILL leave if they don't give us a good deal. Should be super fun!
2. Finish our Fully Funded Emergency Fund by April 2008. That will be super cool!
3. Start saving 15% of my hubby's paycheck for retirement beginning May 2008.
4. Quit my full time job, work part time, possibly look into being a financial counselor???
5. Once we have kiddos, put away $500 per kid, per year for college.
6. Pay off our house by 2017. I know, sounds crazy, may not happen, but I can be flexible!
7. Double retirement savings to 30% by 2017.
8. Retire early, like 2040, and GIVE GIVE GIVE!
9. Maybe start a fun business? With cash of course!
10. Travel lots!
Sounds like a plan!
1. Buy a 2nd car with cash in November or December 2007 - and get a GOOD deal. Definately walking in with cash and we WILL leave if they don't give us a good deal. Should be super fun!
2. Finish our Fully Funded Emergency Fund by April 2008. That will be super cool!
3. Start saving 15% of my hubby's paycheck for retirement beginning May 2008.
4. Quit my full time job, work part time, possibly look into being a financial counselor???
5. Once we have kiddos, put away $500 per kid, per year for college.
6. Pay off our house by 2017. I know, sounds crazy, may not happen, but I can be flexible!
7. Double retirement savings to 30% by 2017.
8. Retire early, like 2040, and GIVE GIVE GIVE!
9. Maybe start a fun business? With cash of course!
10. Travel lots!
Sounds like a plan!
Saturday, September 1, 2007
My second job and SantaCaliGon days
Since the last post was regarding increasing income, I thought I would post a bit about my 2nd job experience. For about a 1/3 of my adult life, I have worked two, sometimes 3 jobs. I think this stems from the fact that my dad always worked a ton of hours so I thought I was being idle if I didn't work alot. So, when I graduated college in the winter of '05, I couldn't just work full time. I immediatly (like 3 weeks after graduation) got a second job. I didn't really even give myself a chance to rest. We were not at that time trying to intensely get out of debt, but we were trying to pay cash for a vacation and I had some expenses for my sister's wedding that I needed to pay for. I ended up averaging about 52 hours a week. We were able to pay cash for the vacation (with the exception of Disneyland, which also happended to be the last thing we have put credit). I was also able to pay cash for my sister's bridal shower and the gifts that go with having a sister get married. :D
Once we heard about Financial Peace (on our vacation!) we got serious about paying off our debt. After we had paid off our two smallest debts which were a credit card and a signature loan, we realized that because we were budgeting I could have quit my second job. So in November I quit. It was awesome!
I say all this to say this: If we had been budgeting all along, I never would have needed to take on a 2nd job. But since we had no idea where our money was going each month, I felt the need to generate more income. Now, and especially since we started the class, we know where every dollar of our income is going before the month begins. It's been awesome! And because of budgeting, I rarely feel the need to go out and get a second job. Okay, so I almost applied to be a online tutor a month ago, but I fought the urge!
So this is not really Financial Peace related, but KCBT (Raytown) has a booth at SantaCaliGon. I went yesterday and helped to hand out tracts. It was fun! We had a great time talking to people. If you happen to stop by, try to find our booth - we are at Main and Lexington (east side of main, just south of Lexington). You'll get some FREE throws at Goliath for some prizes. The Goliath was good at reeling the kiddos in and then we were able to hand out tracts to the parents and the kiddos. It was a good time!
Once we heard about Financial Peace (on our vacation!) we got serious about paying off our debt. After we had paid off our two smallest debts which were a credit card and a signature loan, we realized that because we were budgeting I could have quit my second job. So in November I quit. It was awesome!
I say all this to say this: If we had been budgeting all along, I never would have needed to take on a 2nd job. But since we had no idea where our money was going each month, I felt the need to generate more income. Now, and especially since we started the class, we know where every dollar of our income is going before the month begins. It's been awesome! And because of budgeting, I rarely feel the need to go out and get a second job. Okay, so I almost applied to be a online tutor a month ago, but I fought the urge!
So this is not really Financial Peace related, but KCBT (Raytown) has a booth at SantaCaliGon. I went yesterday and helped to hand out tracts. It was fun! We had a great time talking to people. If you happen to stop by, try to find our booth - we are at Main and Lexington (east side of main, just south of Lexington). You'll get some FREE throws at Goliath for some prizes. The Goliath was good at reeling the kiddos in and then we were able to hand out tracts to the parents and the kiddos. It was a good time!
Subscribe to:
Posts (Atom)