Friday, May 8, 2009

Good Choices For Bad Times

I preface today's post by remembering that Sunday is Mother's Day. The good choices I'm about to describe have been significantly influenced by my wife Cathy. As a helpmeet and a mom, she has been the backbone of establishing priorities and discipline into the financial part of our home.

That said, here are four good choices we have made over the years. Establishing and living by these priorities has affected tens of thousands of tiny decisions. In turn, by God's grace, we are where we are.

1. We put God first.

I know that I'm a pastor, but this part of our lives is something we learned from both sets of parents. Remember, my dad was a mechanic and Cathy's dad worked for the Postal Service. We practice giving at least 10% of our income back to God because we are grateful for His provision. I call the tithe check our "Declaration of Dependence."

2. We use credit cards to our advantage.

We failed to completely pay off our cards each month for only one short season and that was early in our marriage. We started using the card to finish an unfinished room in the first house we bought. We sold the house, paid the balance on the card, and agreed that we would not use it again unless we had the money to pay it off. I had started our marriage with a small amount of consumer debt and I remember how much easier it was to spend credit than to spend cash. By God's grace and Cathy's insistence, we got out of that trap.

That said, we use several cards now and we use them often. We earn free flights and free hotel rooms that help us see our kids and grandkids. AND we pay them off in full every month.

3. We limit our spending.

This is where thousands of those tiny decisions come in. For instance, as our kids were growing up, we rarely went out to eat. Cathy used coupons to save money and watched her grocery budget like a hawk. We didn't regularly drop by the local convenience store for sodas and candy -- those were rare treats for when we were traveling. We often buy clothing and some housewares at yard sales. We have never purchased a new car. We set an affordable budget for Christmas and birthdays and live by it.

In addition, we set boundaries for how long we would provide for our kids. We helped them pay for college, making it clear that if they dropped out or if they got married, they were on their own. We gave them each a budget for their weddings. If they spent the budget on the big event, it was gone. If they had money left over, it was theirs to use as they wanted.

When our kids reached the age when they were influenced by their peers and more style-conscious, we had a rule: we bought the article of clothing and they bought the brand. If they wanted jeans, for instance, we found the price of good ones and provided that much money. If the brand they wanted cost an extra $30 a pair, they paid the extra $30.

4. We set long-term goals.

Our initial goal was to be completely debt-free (including our home) by the time I turned 50. We were on the way to reaching the goal when our church relocated and we made a decision to move across town near the new campus (which we have never regretted). We sold the old house and built one in a new sub-division. We limited the size and the amenities to keep the price reasonable, then paid as much down as possible. We took out a 15 year mortgage, with the goal of paying it off in 7 years. We made the final payment about 5 1/2 years after we moved into the new home. For the past several years we have been able to truly "owe no man anything, except to love one another." (Romans 13:8)

Again, I share all this with gratitude to God who richly supplies all our needs and to a wife who has helped us stay the course.

We have approached this difficult economic season with compassion for all those who have been negatively impacted. Our hope and prayer, for you and yours, is that you are able to set and live by some priorities which can help you achieve financial freedom.


Eternal Lizdom said...

Sam, I don't know if you read my own blog, but I just celebrated a week ago- paying off the very last of my own credit card debt. It was a long road and a lot of work. It was thanks to my own inner compass, God, and my husband that I was able to get things in line.

We are weathering this season fairly well. Our savings- 401K and 529s- are taking big hits. But hopefully we see the turn towards the positive soon. And thankfully, the only impact we are really feeling is in our savings. My husband can no longer work any overtime- that was at least 1/4 - 1/3 of his income. My job has remained secure- I even got a small raise recently.

So we are counting our blessings and making smart decisions and still doing some supporting of the economy.

And we try to help out other who need it. Regular donations to our local food pantry is top of the list. We buy things on sale in multiples (toothpaste for $1, for example) and donate.

C. Beth said...

We don't always make perfect financial decisions, but I'm glad I grew up with such a good model so that at least we've probably made more good ones than bad ones. :) Thanks!

Isabella said...

Thank you for posting this list. It seems so simple (and almost common sense), but it's not until you see it in writing that it really hits home.