Remember our thesis: We often find freedom in the exact opposite direction of freedom (dare I say…always?)
And I can think of no more practical example of this than on the topic of finances.
In order to illustrate this point, I need to tell you about my history.
Back in the summer of 2000, I was hired by Karate for Kids. I had assisted with classes as a member of the SWAT team (Super Winning Attitude Team. We were the “demo team” and the “help out with classes” team all in one) for a few years when I was hired on as a staff member. My job: Assist with classes. Mr. Lyon would teach the main group. I would teach the kids that had missed some classes and needed catching up on their form. I was 14 years old at the time.
Along with this first job came something interesting…something I had never seen before. It was called a “paycheck.” It would actually go into my “bank account.” I never had an allowance growing up…so if I wanted anything, I had to ask for it, and my parents would say “yes” or they would say “no.” But now…for the first time ever, something was different. This money was not given to me. This money was earned. It was not a gift. It was mine. No one got to tell me how to use it or spend it. I had freedom with it.
Now, at 14, I had been enjoying the world of “video games” for about 8 years at that point. But since I didn’t have an allowance, the only way for me to acquire these video games was to ask my parents. And Mom didn’t understand…she would say these nonsense things like “Why do you need another game? You have all these other games to play.” Yes, mom, but this is Metal Gear Solid. None of these other games are Metal Gear Solid. Why do you not understand that?
Regardless, usually around every birthday or Christmas was the only time I would get a new video game. And then, it was never the newest game out or anything like that.
Now, I enjoyed them. And I’m not complaining…those games were a lot of fun for me, my sisters, and my friends. But I am telling you this story so that you can truly understand how much my world changed when I acquired my own paycheck.
But then, something interesting would always happen with this money. Strangely, I found that when I spent it, it would no longer be there. And if I spent it too quickly, my life would involve one week of joy, of getting the video game I wanted, of getting the fast food I wanted, of buying food for friends as well…but this week would be followed by three weeks of being “broke” and waiting for that next paycheck.
For the next four years, I would endure that cycle every month. Get paycheck. Be excited. Spend it. Be broke. Get paycheck. Repeat. Sometimes, I would spend it more slowly than others.
Let’s word it differently…at the beginning of the month, I could say “Yes” to whatever. At the mid to end of month, I would have to say “No.” Until something magical happened.
In 2003 or so (I don’t exactly remember), I got my first credit card.
In fact, I could get a laptop at Best Buy, and have it paid off in 18 months with no interest. My mom was cautious…but the first thing I did was make an Excel spreadsheet and show her how I would pay it off. Impressed, they let me go through with it. Eventually, I would succeed at paying it off in about 15 months. Three months early. Get some.
With this Best Buy credit card, I was sent an affiliate card. HSBC. $750 limit. I didn’t use it, but I had it.
Along with that, U.S. Bank (my bank) advertised a student credit card. I got that one. $1500 limit. I didn’t use it, but I had it.
Until I was about to leave for a trip to Washington D.C., and I knew I would be on the plane for a while. So I bought three Game Boy Advance games. On the credit card. I would pay it off later.
Let me tell you exactly what happened in that moment…my life before that moment involved me saying “No” at the end of the month. But now, I didn’t have to say no. I had the freedom (notice that word) to say “Yes,” as long as I paid it off next month.
Over the next six years…the pattern looked like this. Want stuff. Spend debit card account (actual money I have). Run out. Spend money I don’t have. Rack up $300 of debt. Pay off $300…balance now zero. Good. “I pay it off every month” I would say. Then, rack up $400. Pay it off. Balance zero. Rack up $400 again. OOPS. Because of time off, paycheck doesn’t supply me enough to cover that. Pay off $200. Credit Card balance: $200. Better take it easy.
Run out of debit card money. Rack up $300 more. Balance: $500. Pay $300. Balance: $200. Rack up $400. $600 total, right? Pay off some, rack up some more. Do you see where this is going?
Hit limit. Credit Card company raises limit. Wow, thanks, Credit Card company! You are such a helper.
Limit: $8500. And they won’t raise it anymore. Interest every month comes out to about $240. JUST in interest. And guess what…I hit my limit. In order for me to spend more, I had to pay it down.
And for the first time since before 2003…I had to go through the experience of HAVING to say “No” to something, because I had no way of saying Yes. But the different was that this time, I would lose $240 every month, even if I didn’t buy anything at all. And when I had to say “No” to something because I couldn’t say “yes” (because of my credit limit), I suddenly realized something…I hadn’t felt that feeling since before credit cards. There was a “feeling” of freedom. Freedom to look at something and get it. Freedom to not have to walk away without it. But that “freedom” did not result in freedom, now, did it?
“Well, whatever.” I thought, back in 2007, looking at my online account balance. “This is my problem, not anybody else’s. I will work myself out of it.” However, something happened. A game changer. I started liking this one girl at Corban. And, amazingly enough, she started liking me back. And then, I realized that at this age (22, to be exact), this might not be another “dating” relationship. This could very well actually result in marriage.
And then, when I looked at my debt…well, this was no longer “my” problem. This was “our” problem. And when I mustered up the courage to tell her how much debt I had accrued, I felt pretty ashamed.
Oh, she told me that she had debts, too. Sure, Sarah, but YOUR debts are from student loans. Ask me what my debts are from.
That’s right, video games and food.
So, the result of my financial freedom was this: I brought approximately $15,000 of debt (three credit cards and a car) to my marriage. I cleared up just barely enough to put our honeymoon Bed & Breakfast on the card.
As the story goes, my taekwondo-instructor-slash-boss got my wife and me the Dave Ramsey Financial Peace University course as a wedding gift. Cool…I thought. Kinda.
We went through it by ourselves, at first. Sarah peer pressured me to cut up my credit cards. I actually didn’t want to do it…but she cut up hers right in front of me (Whatever. She had a zero balance on it. Big whoop). And what kind of addicted, pathetic loser would look at her and say “Hey, nice job cutting that one up. I think I’ll just keep mine, though”? So I did it.
We budgeted. I had $40 of “blow money” in my court every month. I went from doing whatever I wanted with about $1300 to $1700 (imagine all the Taco Bell) to doing whatever I wanted with $40. Needless to say, that was hard. Really. Freaking. Hard.
Financial freedom? I had never felt so financially un-free in my life. And I was working just as hard as I always had. Harder, actually. $40. Not even enough to buy one new video game. (Sarah and I would budget a game for me, every now and then.)
That was 2009. We started the “debt snowball” You Dave Ramsey people know what I’m talking about. Since the battle with debt is an emotional battle, not a logical battle (If we were logical, we wouldn’t rack up that debt to begin with), the debt snowball involves paying off the smallest debt first so that you can take what you would’ve paid towards the smaller payment and pay it towards the next one. It makes you feel like you’re making bigger payments, and gives you smaller victories, FASTER. And that’s important in that game.
Two and a half years later of us working hard, not spending much, and God’s blessing and providing, and we paid off all three credit cards and the car. We now have further to go…about $11,000 in combined student loans. But if we can pay those off…it means that every month we will need $183 less than we need now. Might sound small…but it might not. If you put $183 in my wallet every month, I’d freak out. And hug you. So yeah, it is a big deal.
So where to after that? Well, let’s take this a step further. Debt means freedom now, restriction later. Paying off debt means restriction now, freedom later. Investing takes that one step further.
Imagine this. Like, seriously, imagine this: Having invested enough so that your investment makes more for you than you make for you.
You could sit there and do absolutely nothing. And feed your family and pay all of your bills.
“Why, Carson, doing nothing is lazy. Laziness is bad.”
Oh, well, how about this: Go to your church and volunteer for whatever you want to volunteer for, with no time restrictions. Teach what you love to others, whether it’s Taekwondo or Snowboarding or Tennis because you want to. Or use your assets to pay your bills, and use your paycheck to feed homeless puppies. Or invest more, so that you can feed entire countries of homeless puppies. I don’t know.
As I mentioned, freedom is found in the exact opposite direction of freedom. I can think of no better example than finances.
VERY IMPORTANT P.S. – MONEY AND FAITH DO NOT CONTRADICT, BUT THEY WILL IF YOU LET THEM.
Biblically, debt is unwise and investing is wise. I believe that because…
- It’s all over Proverbs, and
- Jesus uses investing as a metaphor in some of his parables. Now, the parables were meant to illustrate other things, but I take this as an indication that Jesus is okay with investing. I could be wrong.
We should be wise with our money, but we should NEVER place our faith in money. Money can do a lot, but it cannot do everything.
I believe that God will call one person to obey Him by investing. Those investments should be placed under the Lordship of Jesus Christ. Do not EVER fall into the trap that investing will “enable” God to work through you, or that investing will “enable” you to do more for the kingdom of God. Obeying God will enable you to do more for the kingdom of God. Period. God could drop a billion dollars in your lap, or burn up a billion dollars.
God calls one person to obey Him by investing. He calls the next person to obey Him by selling everything He has. He calls one person to obey Him by leading a megachurch (Rick Warren, Mark Driscoll). He calls the next person to be a missionary in the 80/20 window (the middle east) and be martyred for their faith…their names never to be known in history by anyone but their family, their few friends, and God Himself.
Obey what God calls you to do. If you are pursuing God by prayer, Scripture, and fellowship, and you receive no indication, no “Spirit-signal,” then just keep doing what you’re doing. I do not think God often micro-manages, but if He calls you to sell everything you have, please don’t say to God “But Dave Ramsey says I have to invest!”
ONE LAST P.P.S.
Remember…how you get money is a matter of sin or not sin. (If you get it by stealing and lying, that’s sin. If you get it by honest work, that is not sin.) What you do with that money is a matter of wisdom or foolishness. God has placed that money under your care, as God’s way of providing for your needs, your wants (God actually does bless people and wants them to have what they want sometimes, just like any parent!), and His kingdom. So use it wisely.
OKAY, THE FINAL P.P.P.S.
It is very easy to think “Wow, where would I be now if I hadn’t squandered all that money? What if I had never gone into debt, and had just started investing right then?” Sure, daydreaming about that might be interesting, but what’s that saying that every middle schooler is saying? YOLO? You only live once? I’ll never have the chance to go back and fix that, so what good does it do dwelling upon it?
Thinking about that is cool, I guess, but regret is a stupid place to be. Let’s move forward…as opposed to thinking “What if I could move backwards?” Starting this at 18 would’ve been better than starting this at 27, but starting this at 27 is way better than starting this at 28.