A long time ago and in a land far far away… well actually it was 1980 and my wife and I, as newlyweds, just moved to Alaska—this is a true story.

I was working for a financially secure and slightly older gentleman who, one day as I was passing by his office, called me in and asked me an interesting question. “What’s the difference between a rich man and a poor man?”

Being young and just starting my career, I thought the answer was rather obvious and so I quipped, “one has a lot of money and the other one doesn’t.” It doesn’t take a rocket scientist to figure that one out.

However, his response back, was somewhat surprising:

The Lesson of the $100 Bill

He stated that the difference between a rich man and a poor man was a $100 bill. He asked me if I had one.

“No,” I answered. He then asked, “how many people out on the street walking around right now do you think have a $100 bill in their wallet, pocket or purse.” I responded, “probably not very many.” He said, “my point exactly.”

He then took his wallet out of his pocket and pulled from it a $100 bill and handed it to me and said, “put this in your wallet, keep it there and know that you have more money in your wallet than most people do, and that if a small emergency comes up, you’ll be okay.”

So I gratefully put the bill into my wallet and left. You know, I actually did feel rather rich, and knowing that a $100 bill could cover about any minor emergency that could come up, like running out of gas or an unexpected business lunch with co-workers or whatever it might be; I really was covered. Back then my wife and I didn’t have a credit card or debit card—just cash and a checking account, and for some reason my wife said I wasn’t allowed to carry the checkbook.

Two weeks had passed, and I was again passing by his office, he called me in and asked if I still had the $100 bill he’d giving me. I lowered my head and said, “the other day I was low on gas and didn’t have any money so I used it to fill the car up.

Once I had broken the bill the remainder went rather quickly.” He chuckled and pulled out his wallet again and handed me another $100 bill and said, “see if you can make this one last longer this time.”

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My first thought was, this isn’t a bad deal we have going here, but he quickly said that this was the last one he was going to give me. Well, again I was back on top of the world feeling rich. This time I kept the bill for almost 6 months before I needed to use it, once again, once it was broken it went fast.

Let’s now fast forward to 2010 where a large percentage of the population of the U.S. carries either a credit card, debit card or some other form of a charge card. Who carries cash anymore?

I went into a Subway the other day and ordered their six-inch, special-of-the-day sandwich, which was only $2.99, and I had to use my debit card to pay because I didn’t even have $3 on me. Is it any wonder that so many people are having financial struggles? Not only because of the current economy but also because of what seems to be an endless supply of money that we really don’t have—credit. This idea of credit, can at some point, come back to bite us hard if we don’t manage it correctly. Here are some interesting credit card statistics.

Credit Card Issuer Statistics

Total cards in circulation in U.S.

• Visa credit: 309 million, as of June 30, 2009 (Source: Visa.com)
• Visa debit: 352 million, as of June 30, 2009 (Source: Visa.com)
• MasterCard credit: 211 million, as of September 30, 2009 (Source: MasterCard.com)
• MasterCard debit: 130 million, as of September 30, 2009 (Source: MasterCard.com)
• American Express credit: 54 million, as of December 31, 2008 (Source: AmericanExpress.com)
• Discover credit: 57.1 million, as of December 31, 2008 (Source: Discover.com)

Americans currently owe $917 billion on revolving credit lines and $69 billion of it is past due, according to the latest Federal Reserve statistics. (Source: www.consumerreports.org, September 2009)

Spending Habits and Controlling Your Money

What’s the biggest difference between now and 30 years ago regarding our spending habits? Yes, 30 years ago many people used credit cards, but many people also carried cash in their wallets. A credit card was only supposed to be used for emergencies or for purchasing large dollar items, limiting the need to carry around large amounts of cash, knowing however, that when the bill came due, it was to be paid off in full, monthly.

So when your cash ran out, buying something else wasn’t an option, you just made do without. People back then understood how easy it would be to get into trouble financially using credit cards excessively. People also know this today; however the idea of doing without, if you don’t have the cash to pay for it immediately, or saving towards purchasing it at a later date ,when you can pay for it in full, has been lost or at least conveniently forgotten.

This idea is still sound financial advice today. When the money is gone, make due with what you have and go without until you have the money to purchase it outright.

How to Stay Away From Financial Trouble

An excellent way to keep yourself from getting into financial trouble is to create a budget and then track your expenses daily.

There are several ways to do this. Create a budget on paper and then jot down, in a note pad, your daily expenses. This is inexpensive but somewhat time consuming.

Another, more efficient way is personal finance software; either a desktop application or an online service. Read “Online Finance Software vs. Desktop Finance Software” to get a better understanding of the pros and cons of both of them. Online personal finance software allows you to easily create a budget and then automatically download your daily transactions.

When your purchases are in excess or getting close to exceeding your budget, you’ll receive an email or text alert warning you to rein in your spending. This will help you stay in control of your money, instead of it controlling you.

Want to feel great each day even if you do have financial stress; since fewer people carry cash these days compared to 30 years ago, tuck a $100 bill into the bottom of your wallet or purse and know that you have more money on you, than most people you’ll meet and pass each day.

Also, see if you can make your $100 bill last longer than 2 weeks or 6 months. It truly is a great feeling.

This has been a guest post from Brent Ropelato from PersonalFinanceManagementSoftware.com, which helps you eliminate debt, track expenses, manage your money, plan for retirement and more.

Times are tough!

Income is down, expenses are up and cash flow is tight.

It’s very tempting to skip out on a debt payment or a credit card bill to help free up the cash flow a bit, but are you sure you realize the impact that decision will have on your credit score?

The Spend on Life team had a great post and graphic the other day that showed how your credit score drops significantly the longer you go without making a payment – so make sure you are staying current with your bills!

In other words, Don’t Flush Your Credit Down the Drain!

SpendOnLife.com is an online resource dedicated to helping consumers achieve healthy credit.  Credit ratings are extremely important for qualifying for low interest rates on new loans and lines of credit.  

SpendOnLife.com provides you with up-to-date, accurate information and advice about credit reports and scoring.  Check ‘em out.

What Should You Do If You Can’t Pay Your Bills?

Every situation is different, but here are a few tips to help:

• Call your creditor – make them aware of your situation - many times they can work out a plan with you.
• Pay something – Even though you can’t pay the whole bill, paying anything shows the creditor you are committed to paying your debt.
• Seek help – There are some reputable places and agencies that can help you, just be careful. 
• Commit to getting out of debt – Yes it’s painful for a while, but in order to get out of this mess you have to stop spending. 

It is an epic battle, one waged since the dawn of time…well not quite that long, but the battle between credit card rewards and credit card debt is one which polarizes people the world over.

But today we end it with a duel – en guard!

The Strengths of Knight Reward

Knight Reward is often accused of being an underhanded competitor – offering the possibility of the carrot, only to beat you with his stick.

Well you can avoid being beaten and get a hold of the prized carrot if you know how to play to the strengths of credit card rewards.

How to use a credit card for the rewards:

A rewards credit card must be used with a high interest savings account fighting alongside.

Knight Rewards’ most famous battle cry is the fact that credit cards can be used throughout the month, during their interest free days, for all purchases while your salary is in a high interest savings account accruing interest, or is in an offset account linked to your home loan, offsetting the interest you will have to pay on your mortgage in the month.

To be given the chance to win, your credit card must be allowed to fight, and to combat the high annual fees which often come with rewards credit cards, you will need to be spending at least $2,000 each month on your credit card before you consider going in to battle alongside Knight Rewards, to accumulate enough points to make you eligible for rewards which will compensate you for these fees.

You must always clean your sword before returning it to its sheath.

If you fail to pay your rewards credit card balance back to zero before the end of the interest free period, even the fearless Knight Rewards won’t be able to save you – you’ll be ensconced in interest and monthly repayments which will override the value of any rewards you may earn.

However, using a credit card and paying it down to zero each month gives you a strong credit report and shows your financial responsibility.

Choose a rewards credit card which actually allows you to earn rewards.

Some rewards credit cards are drawing you into a battle you’re bound to lose with unrealistic terms, conditions and usage periods for your rewards points.

However, there are many credit cards which will offer you the chance to choose gift vouchers or fuel vouchers with the points you have built up in your spending and some gold cards will also allow you to earn two points for every one dollar you spend.

Know the rules of the credit card battle.

If your rewards points do expire, make sure you can easily keep track of them and cash them in for rewards before you lose them. Also make sure that the rewards you can earn are ones you actually want, and that you are given choices between charity donations or cookbooks, movie tickets or a hair straightener.

A savvy purchaser can deftly avoid interchange fees. Some rewards credit cards will attract a higher interchange fee, but most Australian retailers will advise you of this additional fee before processing the purchase – therefore, look for a credit card with a companion card which attracts lower interchange fees.

For example, take a Mastercard or Visa into battle with a companion American Express card, AmEx can earn you higher rewards, while fighting in a tag team with Mastercard or Visa to avoid high interchange fees. An informed credit card user also knows interchange fees are just one of the many costs of doing business.

He’s put up a good fight, but is it enough to allow Knight Rewards to maintain his dominance on the credit card battlefield?

The Strengths of Challenger Avoid

Challenger Avoid is a somewhat meek competitor – taking the road of least resistance in the battle and in risking nothing, he attracts no ire.

Challenger Avoid knows his weaknesses and if you’ve identified similar weaknesses then you may choose to fight alongside the stoic warrior Avoid.

Avoiding credit card battles:

The cost of not-so-innocent interchange fees is just too high.

Avoid is proud to fight the good fight on behalf of all consumers and holds strong to his belief that interchange fees which merchants are charged to accept credit cards are a cost passed onto all buyers, regardless of their payment method.

Challenger Avoid will avoid credit card use to save himself from the costs of interchange fees, while hoping the decreased use of credit cards will decrease the cost of interchange fees to businesses, and in turn customers.

The battle of the credit cards preys on the weak.

Challenger Avoid chooses not to fall victim to the seemingly enticing deals which he believes are only a clever disguise to get him deeper into debt, in turn earning the credit card companies more interest.

Challenger Avoid knows the credit card companies don’t ever want him to pay off his balance, and chooses not to spend an eternity being encouraged to spend.

Know Your Credit Card Habits

Knowing your spending habits helps you responsibly avoid bad debt. If you have faced past battles with credit card debt and lost, or you don’t want to tempt yourself to spend money which is not yours, Avoid encourages you to not show your weakness to the credit card companies.

If you don’t think you can pay off your credit card to zero each month, or only use it for essential purchases, then the best way to ensure you stay debt free is to avoid the temptation to use credit.

A doppelganger debit card can give you the same convenience as credit. If you have chosen to avoid credit card use, you don’t have to forge the ease and security of paying with plastic.

You can instead employ a decoy – a debit card which looks and acts just like a credit card, but which links to your transaction account and allows you to only spend your own money.

Debit cards offer you the security to pay for bills over the phone or make online purchases and can even offer rewards of their own – Visa Debit cards for example give you first access to concert ticket releases and discounts on audio entertainment equipment.

A worthy opponent, who has now earned himself an equal rank beside Knight Rewards, but has Knight Avoid been able to topple his historic foe?

The battle has been fought and won, with each side offering a mighty show of strength and determination for their cause, with the duel making champions of both competitors.

How About You?

The duel between Knight Rewards and Knight Avoid will go down in history, so which side will you be fighting on in the future?

Fred Schebesta write for Credit Card Finder and Savings Account Finder, where he helps people to compare savings accounts and credit cards

How would you like to win a $500 American Express Gift Card or even a $100 gift card just in time for last-minute holiday shopping? 

Who wouldn’t!?

Joel, over at Credit Card Chaser is running the 2009 Credit Card Chaser LOVE/HATE credit cards contest. 

Head on over to Joel’s site to enter your comments for a shot at the $100 gift card.  If you’re a blogger – write a post about your own LOVE/HATE story with credit cards for a chance to win the big prize! 

In the meantime…

Here’s My Credit Card Story

I absolutely LOVED my Chase Visa Golf Card, but now I HATE it.  With this card I earned dollar for dollar rewards with no limits. 

After a certain amount of points Chase would automatically send me a “golf pack“, which included a free round of golf at hundreds of courses around the country along with a 6-pack of Nike golf balls and a pack of tees! 

Because I ran all my business expenses on this card I managed to earn seven or eight free rounds of golf, about four-dozen golf balls and countless tees!  It was a pretty sweet gig – that is until Chase shut the card down! 

After having the card for two years I got an unexpected letter in the mail stating that they no longer supported the rewards program and that I could no longer use the card for purchases and any points I had earned would be forfeited!  What a crock! 

So Chase Visa Golf Card – I got no love for ya! 

This Week’s Round Up

Here’s a look at a few good posts from around the ’sphere:

• Looking for some thoughts on the prosperity gospel?  Trent over at The Simple Dollar provides an answer to an email question he receives quite often about God blessing his site. 
• Bob over at Christian PF provides a response to Trent’s post and tackles the issue that the Bible oftentimes talks about God prospering or blessing us.  I think it’s a good, well-balanced view.  Bob makes the case that when we compare ourselves to the rest of the world – we in American are filthy rich and therefore we need to know how to use our money for the greater good.
• Matt Jabs, a blogging buddy over at Debt Free Adventure freshened some things up a bit at his site with a new theme design.  Check it out if you get a chance and let him know what you think.

Many times the simple things have a way of sticking with us and helping change our patterns of behavior better than a list of 25 items we need to remember to do on a regular basis. 

If you’re struggling with stopping the use of your credit cards - you could set fire to them, but I hate the smell of  buring plastic don’t you? 

Instead, try to focus on changing just one or two things.  Once you master those then you can move on to the next steps. 

I recently read an article from TheStreet.Com called 5 Ways to Dig Yourself Out of Credit Card Debt.  This post is adapted from that article. 

It will be especially important with Black Friday approaching that you have a plan in place to help with your credit cards.  Here are three simple things you can do to help curb your credit card usage:

1. Delete your cookies

Wait! What? Yes you read that right.  But how does that help? 

Cookies are simply a way your computer remembers information about you to make your internet browsing easier and quicker. 

One thing that your computer stores is your credit card account numbers and information. 

Think how easy is it to jump on a site like Amazon.com, shop for that new book, video game or software you’ve been dying to buy and with a couple clicks of a mouse have the item shipped to your house.

Most people aren’t big dorks like me and have their credit card number memorized  - so by deleting your cookies you at least have to take a few minutes to go dig your credit card out of your wallet and type in the information.

Doing this will probably get old after a while and hopefully will be enough to at least make you pause and think, “Do I really need this?” 

2. Apply the $25 rule

This rule simply says you CANNOT add more than $25 (or $50 or $15 or whatever you amount you decide) to a purchase you were originally going to make.

In other words, say you go to the mall for a new pair of pants, but you notice that sweater you’ve been eyeing for a while is on sale for $29.99.  You need to say, “Sorry sweater, you’re not coming home with me!”  Don’t act like you don’t talk to your clothes!

You should set your target spending amounts BEFORE you go to the store.

Another version of this would be to say you cannot add X amount to your card at any one time – where X is whatever amount you decide ($25, $50, $75 etc.)  This helps avoid those big ticket items that are easy to say to yourself, “Oh, I’ll just pay it off later!”

3. Play the Three Reasons game

This can be one of those games that annoy you to the point of not purchasing the item. 

Basically you need to name three reasons why you should buy that particular item with a credit card.    (Don’t cheat: ”Because I don’t have cash on me” is not an answer!).

If you have trouble with cards don’t fool yourself into thinking that getting your cards rewards points is an answer either.

If you can come up with three solid reasons why you should buy with your credit card then go for it.  What you’ll find is that many times it just doesn’t make sense. 

Try these simple rules this holiday season and see what happens with your credit card usage.  What other simple tricks do you use to help curb your credit card use?

Other posts on credit cards you might like:

• How to Save (Potentially) Thousands by Spending $3.99
• 9 Habits of the Debt-Free Credit Card User
• 5 Mistakes People Make with Their Credit Cards

It’s one of life’s great conundrums: how exactly does the average credit card user stay debt free? Surely the two are mutually exclusive, and therefore the stuff of fairy tales. Yet, while most credit card users find it nigh on impossible to clear their debts, there are a handful of very organized spenders who should be lauded.

They don’t necessarily clear their cards every month; they just use them wisely and manage their money well: think frugal and sensible, as boring as it sounds. And while it is a good thing to be able to clear your credit card debt, it’s actually healthy for your credit history to have some record of debt, so potential creditors can see if you’d be a worthy client.

The debt-free credit card user’s secrets are within your grasp – and all without a pair of scissors in sight. Here’s how they do it:

1. Show Restraint
Don’t throw your money around. The average DFCCU (debt-free credit card user) has had to learn to be strict with themselves and their wallet, and it doesn’t mean they only refrain from extravagance, it means they start with saving on the small things. So, eat out less, buy more home brand items at the store and shop around for cheap gas or better still, ditch the car – it’s often a huge drain on finances. Once you’ve cut costs you’ll find you’ll have more money to pay off debts.

2. Get a Steady Job

Before the bottom fell out of the financial market, the world and his wife were inundated with pre-approved credit card offers, and were often granted immediate credit without ever having to prove they had the means to pay it off.  Now that the financial bubble’s burst those offers aren’t flooding letter boxes in the same way, but the people who were granted the credit are drowning in debt. So, the one and only way to get out of the mess is to have a job that pays well. And if you have a good job but you’re still finding it hard to pay off chunks of your debts, get a better one, or ask for a raise. Of course, changing spending habits would be the best route, but for some that’s harder than changing jobs!

3. Stay Strong

When the assistant behind the counter is trying to persuade you to get yet another store card that you don’t need, just say “No”. Sure you get $10 off the total cost of your bill today, but you’ll end up paying 10 times that over the next few months in exorbitant interest fees, which will probably keep building up because you only pay the minimum amount every month.

4. Have a Healthy Panic

Ignore all the advice you’ve heard to date about not panicking when you find you’re getting deeper into debt. Are they mad? A good controlled panic attack will scare even the most hardened debt junky into realizing that they can’t possibly go on spending as they are – and not on their wage. And don’t worry; even the DFCCU had to go through this stage, too. It’s like one of the five stages of grieving, but for cards.

5. Devise a Plan

Once the panic waves have subsided, take a deep breath, pull yourself together and start planning what to do next. Write down exactly how much you owe – it always looks much worse on paper, so will reiterate just how bad, or good, things are – then start calculating.  How much you allocate to each card should depend on the interest rate of each. Start paying those with the highest interest rate first. If you can, consolidate all your debt onto one low-interest card, or one with a good introductory offer near 0% for certain period. Be warned though, always check the fine print on these offers so you’re not stung with a highly-inflated interest rate once the introductory offer finishes.

6. Make Direct Debit Your Friend

Without a doubt, everyone who has ever had a credit card will have missed a payment at some point, and while this is enough to push most people into setting up a monthly direct debit, others remain serial non-payers. True, it can be a pain getting it organized and usually involves lengthy calls to your bank, but once it’s sorted it is absolutely worth it. All you have to do is make sure there is enough money in the bank every month to cover the outgoing payments. See step 2.

7. Get the Devil Behind You

Do not use your credit card in place of a debit card. It’s a sure-fire way to ensure your fragile financial stability goes into a downward spiral. Many cash-strapped people start to use their credit card once their checking account has gone over the overdraft limit because it’s the only way they can get their hands on some cash. But don’t be tempted. Unless you are very good at managing your payments by paying them off every single month, keep your credit card locked away until desperate measures are needed. And that means not using it to go out with your buddies for a few drinks because you’re too embarrassed to tell them you’re broke! Peer pressure can be shockingly persuasive.

8. Make Small Sacrifices

Not the voodoo type; some of your own.  List what you can do without and write down what you really need for the week/month, depending on how you calculate your budget. If you think you really need something and are tempted to buy it but know you shouldn’t, give yourself a 30-day cooling off period. If after then it’s still as precious to you, budget around it. It’s also a good idea to have days when you vow to spend nothing at all. Pick one day a week, stick to it, and you’d be surprised how much you can save.

9. Give it Some Time

Understanding that you’re not going to be able to become debt-free overnight is important. These things take time. As long you realize that it’s about how you use your credit card, and a budget is in place, things will get easier. And once you’ve mastered the art of debt-free credit card use you can start building those precious points that will lead to well-earned treats, without having to worry about how you’re going to pay for them.

Useful Links: 1, 2, 3, 4

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If I knew then what I know now - surely I would’ve done things differently!

Every hear those words before?

Every say them!?

I catch myself saying them every now and then.

We all have various lessons we wished we would’ve learned at an earlier stage in life.

The great news is that it’s never too late to change.  It’s never too late in the game of personal finance to turn the ship around.

Money has a funny way of controlling us doesn’t it?

Our thoughts, our desires, our motivations – they are all impacted by our money.

Learning these lessons early on will help you stay in control of your money rather than letting it control you.

1. Spend Less Than You Make

I spent an entire post talking about this very point – so I won’t hammer it too much here.

At the core of our personal finance is this very thing – you cannot spend more than you make and expect to get ahead.

It’s so simple, so basic that it’s almost insulting to mention it – but time and again I hear from folks who just can’t seem to get this in their minds.

The earlier you “get this”, the better off you’ll be.

2. Pay Your Tithe First

The Bible talks about honoring the Lord with your firstfruits (Proverbs 3:9), which back in an agricultural society meant bringing your best produce and livestock to the Lord first.

In today’s economy, a practical application of this can be: the first check you write when you get paid is your tithe.

Giving back to Him is a natural response we have when we realize how much God gave us.

We don’t do it to earn God’s favor, but rather to show our gratitude for canceling our greatest debt.

Don’t wait til you “have money’ to give, because that day never comes.  Rather give back to the Lord first for He promises to provide for your needs.

3. Pay Yourself Second

After you give back money to the Lord, the next check you should write is to yourself.

This means you should have a set percentage or a set dollar amount that you save before you pay everything else.

Usually, if you don’t do it beforehand, what happens is that you may typically spend all of your money and by months’ end – there’s none left over to put into savings and investments.

Saving before your other bills – even if it’s only a small amount – will help establish a consistent pattern of savings and will also help you realize the importance of putting some money away.

4. Debt is Slavery – Not Leverage

This is something I wished I would’ve learned early on when I was in college.  The first day of school my freshmen year I signed up for a credit card mainly to get a free T-shirt.

Little did I know that a little plastic card would lead to thousands of dollars in credit card debt.  Unfortunately I thought that credit cards were a good source of leverage – and I paid dearly for those mistakes.

Using leverage to buy a home is something many of us have to do, but using leverage to buy everday items or depreciating assets is typically not a wise move.

The Bible illustrates a great point when it says that the “..borrower is slave of the lender” (Proverbs 22:7).

5. Contentment is a Jewel

One of the biggest reasons we take on massive amounts of debt and struggle to get ahead is because we lack contentment.

Contentment is defined according to Merriam Webster as:

feeling or showing satisfaction with one’s possessions, status, or situation

Whether in good times or bad, in excess or in want, when we learn how to be content with what we have, where we live and what kind of car we drive we can start making big strides with our finances.

Contentment is a rare gem in today’s society and an area I hope I can grow in as well.

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You gotta spend money to make money!

Every hear those words before?  Typically they’re said by a business owner or a company that spends money trying to grow the business.

When it comes to personal finance and getting ahead, that phrase seems so wrong – but what I’m suggesting is you may need to spend money to save money!

For the price of your favorite grande beverage at your local coffee house you can potentially save thousands of dollars if you put this plan into place.

Drastic Action

We all get to a point sometimes with our bad habits where we just can’t seem to make a change and we need to take some drastic measures.

Jesus spoke of this in regards to fighting against lust in Matthew 5:27-30, where he says “if your eye is causing you to sin you should tear it out and throw it away.”

Jesus wasn’t literally saying we should gouge our eyes out if we are lusting for we’d all be walking around blind if that were the case.

What he was powerfully illustrating is that you need to take drastic action against destructive, sinful behaviors in your life before they ultimately destroy you.

Relating to Your Money

If we apply Jesus’ principle to our money then we need to take drastic measures to correct any destructive behaviors we have with our finances.

If you’ve gotten yourself into debt, there’s a pretty good chance you have abused credit cards.  It’s amazing that a little plastic card could lead to so much damage.

If that’s you – it may be time to take some drastic action.

The Best $3.99 You’ll Ever Spend

Most of you already have one of these in your house so you may not even need to shell out the four bucks – however, even if you do, maybe just going to the store and buying a new pair will help motivate you to perhaps embark on a brand new journey.

It will be quite simply the best $3.99 you’ll ever spend.

Run to Walgreen’s or your local drugstore; or even shop online and buy a new pair of scissors.

This set here should easily get the job done.

Come back home and have a little Cutting the Cards Party! Gather your cards and one by one start cutting away!

Think about how much money you can save by simply stopping the use of credit cards.

Not only will you save money by not racking up any more debt, but you will also save big time money on interest.

The potential savings could add up to thousands of dollars over the course of your life span.

Now, don’t get me wrong.  You may want to keep one since it’s difficult in today’s environment to get away with using only cash, but my point is that if you’ve had difficulty with credit cards in the past it’s time for a change!

What is the ultimate goal of getting your personal finances in order?  Is it to be debt free so that you have security and comfort in the midst of a struggling economy?  Is it to feel in control of something that perhaps was always out of control?  Is it to feel a sense of accomplishment or pride knowing you did a great job in getting your “house” in order?  Do you want to make more money so you can buy the toys you’ve always wanted?  What is it that makes you tick when it comes to improving your personal finances? 

I like to wrestle with these kinds of questions although I am not always happy with the answers that I give.  I love to hear from others too about what makes them tick and why they do the things they do when it comes to their money.  Most of the time, if I were being brutally honest with myself, I give superficial, selfish reasons for wanting to get my mortgage paid off early or make more money.  Unfortunately, at the core, I find often times the root of my desires is pride and selfishness.  Feeling good about myself or that I’ve done something on my own or have done a great job of handling my money can be a source of self exaltation for me.  How about you?

I was challenged a while back by something John Piper wrote in his book , “When I Don’t Desire God” in regards to prayer.  I came across it again recently and it got me thinking about the issues of money and personal finances and what brings ultimate joy when it comes to dollars and cents. Here is what he says:

Your prayer for your job is not merely that it be stable and peaceful and prosperous, but that it truly serves the needs of society and that in all your labor and all your relationships your joy in Christ and your love for people would make a name for Jesus.

Ok, if I am going to continue being honest then I have to confess that my prayer a lot of times ends at the part of making my job stable, peaceful and prosperous.  How about you?  Don’t leave me hanging out here by myself on this one.  Think about it.  What are your prayers like for your job?  Are they prayers for comfort, security and stability?  Do you pray for more money, less headaches and that everyone finally wakes up to see what a fantastic employee you are?  

If I could have a conversation with John Piper, I might ask, “Dr. Piper, are you saying that security and comfort and stability are bad things to desire?”  I’d guess that his answer would be “No, but if our desire for those things is greater than our desire for joy in Jesus then emphatically YES, those are bad desires.”

Reading his quote reminds me of what the Apostle Paul says in Ephesians 4:28:

Let the thief no longer steal, but rather let him labor, doing honest work with his own hands, so that he may have something to share with anyone in need

So here’s the rub.  The reason why we should make money, get our personal finances in order, work at becoming debt free and in general be better stewards is so that we can share with those in need and be a help and benefit to other people.  Why?  Because loving and serving others for Jesus sake is what brings ultimate and lasting joy!  

Do you see what a huge paradigm shift this is?  The real fruit of faithful finances is not that we are no longer debtors to banks and institutions, but that we are freed to give generously to those who are hurting and poor and weak.  Happiness from paying off your house or your car is fleeting.  Don’t get me wrong, it feels great, but the fact of the matter is that when you pay off that $400 monthly car payment and are wondering what to do with that money, perhaps taking a look at how you can serve others with it rather than socking it away into your retirement plan will bring more lasting joy an glory to our God and King.

What About You?

So, how about you?  Have you ever accomplished some goal or task or landed that promotion and still felt an emptiness inside?  What makes you tick when it comes to your personal finance goals?  Have you felt an exceeding joy from being generous and sharing with those in need?  I’d love to hear your thoughts!

I always get a kick out of watching kids use their imagination to play games.  My two-year old daughter is just getting to this imaginary and pretending stage. Her new thing is to pretend she’s sleeping when we go to get her out of the car.  When we are about to get her, she “wakes up” and yells “boo!” to scare us.  She gets a great laugh out of it every time and so do we.   

Let’s play a little pretend game for a moment and imagine that you had an average job making about forty thousand dollars per year, but you owed $80,000 on your Mastercard.  Your interest alone would be around $1,300 a month at a 20% rate.  You can hardly make the minimum payment and you’ve had to use your measley savings to keep up with the debt so now you are walking a tightrope.  If something goes wrong, you’d be in serious trouble. 

Then your worst nightmare happens.  Your company informs you they’ve experienced a downturn due to the economy and they had to make some cuts.  You recieve notice in your paystub that this would be your last check indefinitely.  They are closing down their doors.  Jobs are scarce and it doesn’t look like anyone will be hiring for a while. 

“How am I going to pay my bills, I can’t even afford the minimum payment on the credit card as it is”, you say to yourself.  Imagine the feelings and raw emotions you would have.  The utter despair, loss of hope and total despondency.  Perhaps you’d feel like you had the weight of the world on your shoulders.  You would have no freedom to enjoy life because you’d be a slave to your debt.  Feeling dejected, hopeless and overwhelmed you cry out for help. 

Suddenly, the phone rings.  It’s your credit card company.  “Oh great”, you say, “here come the debt collection calls already?.”  The man identifies himself as the CEO of Mastercard.  This has to be a joke you  think to yourself.  “I’m calling to let you know that you don’t owe us anything anymore”, the CEO says.  ”How could that be?” you ask, “That’s a lot of money I owe you.  You can’t just wipe it away?”  

“I’ve decided to pay the debt myself.  Your account balance is now $0.” explains the man.   You stand there in silence.  “It’s true” says the CEO.   You desperately want to be believe this, but it seems so crazy.  It just doesn’t make sense, why would he do something like this when you racked up all that debt yourself through foolish decisions?  The CEO repeats himself, “I’ve wiped out your debt myself, your account balance is now $0.”  “But sir, I don’t deserve this” you say with tears streaming down your face.  “I know, that’s why it’s called grace” says the CEO “consider this a gift from me to you.” 

Imagine the feelings you have after hearing that news!  You would be humbled the CEO’s generosity.  You’d probably feel the weight of the world lifted off your shoulders.  You’d have freedom to enjoy life again.  There’d be no more sorrow or despondency.  You’d probably tell everyone you knew about the CEO’s kindness and would do anything for that man.  You wouldn’t have to worry about trying to work harder to pay off your own debt because it’s been taken care of by someone else!  Your debt has been canceled!

Now, let’s step out of the pretend game and talk reality.  Every single one of us is in this situation whether we realize it or not.  We all have a major debt that we cannot repay.  In fact, this debt is way more than $80,000.  It’s called our sin.  The Bible uses the debt metaphor in a few passages to correspond to our sin (Luke 7:41-50; 11:4; Matt.6:12; 18:21-35).  Because it is an offense against a holy and just God, the debt must be repaid.  Our future is hopeless and we could never work hard enough to pay it back.  But, God in his kindness through the sacrifice of his only son Jesus Christ, extends grace to us.  Jesus steps in and pays our debt. 

Photo by: noe_carillo

What should our response be to the fact that God has provided a way for us to receive the forgiveness of our debts?  We should be humbled by His generosity and kindness towards us and put our faith and trust in Him.  We should live our lives to please Him and tell everyone we know about God’s mercy.  

Because of Jesus’ sacrifice on the cross, you are free from being enslaved to sin, you don’t have to worry about trying to work harder to pay off your own debt and appease God any longer.  Look to Him, Look to Jesus and put your faith and trust in Him today.  Friends, your debt has been cancled!!