Spending
“Financial Freedom”
Chapter 4
Spending
Ps 23
The LORD is my shepherd, I shall not be in want. He makes me lie down in green pastures, he leads me beside quiet waters, he restores my soul. He guides me in paths of righteousness for his name’s sake. Even though I walk through the valley of the shadow of death, I will fear no evil, for you are with me; your rod and your staff, they comfort me.
You prepare a table before me in the presence of my enemies. You anoint my head with oil; my cup overflows. Surely goodness and love will follow me all the days of my life,
and I will dwell in the house of the LORD forever.
NIV
When Han and I were first married I went to Sears one day and asked for a Sear’s Credit Card. They asked me what I did for a living and I told them that I was on Active Duty in the U.S. Army. They then asked me when my tour in the Army would be up. I told them in less than a year. The lady at the counter told me don’t even waste your time filling out the application, you will not get a Sears Credit Card. This was a blessing in disguise because it caused Han and I to save and pay cash for all the things we wanted.
Today credit is easy and available and this causes people to spend more than they make. What a trap-bondage, especially for young people. Most newlyweds are on a limited financial base; yet within three to four years, they have attempted to equal or surpass their parent’s standard of living. I heard this on the radio several years ago, so I don’t know who to give the credit to, but if you use a credit card once for a $3,000.00 usage and only make the minimum payment at the standard interest rate it will take you 20 years to pay off that debt and in the process you will have paid $7,000.00 of interest. That totals $10,000.00 you have paid a credit card company on an initial $3,000.00 debt. I don’t know about you, but I would rather pay myself than a credit card company!
The number one reason people are in financial bondage is Overspending. I suggest you sit down as a family and see if you are overspending or of you have things under control.
Are You Overspending?
(Answer the following questions)
1. Shopping for me is therapy. True False
2. I have credit-card debt and pay interest on it. True False
3. Many of my credit card charges are for items that are not necessary for survival. True False
4. Often I buy little things that I want that are not on my shopping list. True False
5. I/we have house and/or car payments that really stretch our income. True False
6. I/we have purchased new furniture and/or appliances or other items this past year on a promotional plan that promised “No interest or payment until __________. True False
7. I/we own at least two of the following items that we have purchased on credit within the past two years: home or car stereo; DVD, VCR, TV; Play Station or other video games; cell phone; any kitchen appliance; or recreational items. True False
8. I/we buy a lot of CDs and videos and/or we love going to movies, concerts, and sporting events for which we often purchase tickets. True False
9. I have purchased new clothes within the past month even though my closet is already full. True False
10. I/we love dining out, and do so at least once a week often using our credit card. True False
The more “true” answers you have, the more your spending is out of control.[1]
Overspending is a behavior that needs to be changed. Before someone can change unwanted behaviors they must first understand what causes these behaviors. We all have triggers in our lives that, when stimulated, produce actions. You must discover what triggers are causing this overspending in your life. If you struggle with overspending, take a minute and think through what some of the triggers might be in your life that are the cause.
Wise Spending Principles
- Don’t buy what you can’t afford.
- Pay yourself first.
- Time really does equal money.
- Money can create a whole new set of problems.
- Consumption equates to lost opportunities.
- Adjust your lifestyle as you age.[2]
Benefits of Reduced Spending
If you can reduce your spending by $1000.00 per year you will have $83.00 a month to put into a retirement account. It may not seem like much, but if you invest wisely you can achieve financial freedom.
Finding ways to save thousands of dollars is tough, but we can find thousands of ways to save $5.00. Here are just a few ideas on how to save money. I would guess you can come up with many more on your own.
Household cost: Plan shopping in advance, buy only what you need, look for the best values, shop are garage sales and discount stores.
Auto expenses: Buy used vehicles, join a carpool, wash the car and change the oil yourself, increase the deductible on your car insurance.
Food saving: Don’t eat out very often, shop at bulk food stores, stick to your list to avoid impulse buying, use coupons, cook in quantity-freeze meals to avoid fast-food nights, don’t shop hungry, and leave children home when you shop.
Clothing: Shop for sales, take care of your clothes, buy and sell at garage sales, learn to sew, and avoid dry-cleanables.
Insurance: Educate yourself on the variety of options available.
[1] Patrick Clements, Financial Freedom: More Than Being Debt Free (Sisters, OR: VMI Publishers, 2003), 89-90.
[2] Ibid, 80-81.
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