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How Covetousness Affects Our Finances

01.21.2013 by Kevin Mercadante //

Covetousness is not only a sin that God warns us against, it’s also one that can have a profound affect on our finances.

Covetousness is an obsessive desire that drives us to chase and acquire things that aren’t good for us, or that we really can’t afford.

The Tenth Commandment

God considered covetousness so significant that He built an entire commandment around it:

“Thou shalt not covet thy neighbour’s house, thou shalt not covet thy neighbour’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour’s.” ~ Exodus 20:17

As human beings, most of us may not give a whole lot of weight to this commandment. We may think one of the following:

  1. Covetousness is waaayyyy down at number ten – it must be the least important commandment, otherwise why would God put it last?
  2. Covetousness seems less like a sin and more like a heavy temptation.
  3. We all covet, don’t we? How bad can it be?
  4. Covetousness seems like a minor league offense compared to murder and worshipping false gods; God won’t be too sore if I break this one.
  5. How can covetousness be a sin if I’m not even sure what it is?

What is Covetousness?

I think the last point (#5) may be something of a legitimate issue – do we even know what covetousness is?

Dictionary.com defines it as 1. inordinately or wrongly desirous of wealth or possessions; greedy. 2. eagerly desirous. Synonyms include words like grasping, rapacious and avaricious. The definition makes the point that covetousness is a wicked thing.

We all want things that we don’t have – a house of our own, a car to drive, a retirement plan to rely on in old age – is it wrong to want them? Probably not. A certain amount of financial stability can even make us better witnesses of the Gospel.

But covetousness goes beyond simply wanting better for ourselves and doing what’s necessary to get there. Covetousness can turn the pursuit of even noble goals into an obsession, and idol. People end up deep in debt, or chasing a lifestyle they can’t afford. At the extreme, it can play out through deception and theft. At any of those points we’ve crossed a line in which we’ve moved from the desire to have or to accomplish something healthy into an outright sin.

It’s a fine line. Charles Stanley preached an excellent sermon on the topic a few years back, using your neighbor’s wife as an example. Admiring the wife from afar isn’t covetousness, it’s a temptation. Purposing to put yourself in places and situations where you’ll cross paths is a sin.

Unholy desire + action = covetousness.

Covetousness – the Media’s Favorite Vice

One thing we have today that didn’t exist in Biblical times is the media. You know, ads, TV programs, ads, web content and more ads. We already want what we don’t have, and don’t need. Slick advertisements take us right where our flesh wants to go. That’s really good for the vendors behind the ads, and really bad for us.

It feeds our covetousness.

The mass media make covetousness look and feel good, or at least normal. This is bad because it makes sin seem like it isn’t really sin.

Humans Tend to Conform

Most people conform to their peers, which means we want what everyone else has. In fact, we come to believe that what everyone else has is what is normal to have. We deserve at least as much.

Little thought goes into whether we need these things or not. We might, for example, buy a house just because it’s what others do. We might buy a new car every five years, not because we need to, but because that’s what every one else seems to be doing.

We may even come to believe it’s our “right” to have certain possessions, at which point the possessions become idols.

During the 1990s and early 2000s, millions of people bought houses using “liar loans” – so called because you declared a certain income level that was never actually verified by the lender. Millions lost those houses because they could not afford them.

Dare to be Different

One of the best ways to overcome covetousness in a society saturated by media messages and mass conformity is to be different. As Christians, we’re called to come out from among them and be different (2 Corinthians 6:14-17).

That’s a major part of our witness to the world.

It takes confidence, courage, and strength in our convictions to be different. It also takes a willingness to step out of the herd, recognize unbiblical messages, and reject them.

That’s why so few ever do it. But that’s also why it’s such a powerful witness.

Did I mention it’s a less expensive way to live?

Freeing up Money for Giving and Investing

One of the biggest problems with covetousness are its opportunity costs. While we’re out chasing after wants (posing as needs) we spend time, attention and money to get them. That means resources are squandered on immediate desires meant to make us look good in the eyes of others.

If we stop chasing after vanity, we have more time, energy and money for worthy pursuits – the kind that honor our Father in Heaven rather than men.

The more we’re able to avoid the sin of covetousness, the more money we’ll have available for giving, saving, and investing. We’ll also free ourselves from want and pave a path of financial independence that can help us live a life of higher purpose.

Have you ever thought about the true depth of the sin of covetousness and its effect on our lives?

*******

photo credit: Brett Jordan

Categories // Spirituality Tags // covet, Spirituality

Five Signs You Have A Debt Problem

01.14.2013 by Kevin Mercadante //

When you’re managing your debt payments it’s easy to ignore the fact that you have too much debt. The purpose of debt – from a sales standpoint – is to spread the payment out over many years so that what isn’t affordable suddenly is. It’s all about the payment!

With all of the focus on monthly payment, the total amount owed – which is the number that really matters – can sort of disappear. After all, when it comes to debt and expenses, we don’t like big, ugly numbers. Small numbers are so much less disturbing.

Here are five signs that you may be carrying too much debt.

1. You don’t bother to total up how much you owe

Most of us know that we have debt, and usually about how much. When you’re getting in over your head there’s often a reluctance to spend much time dwelling on it. Specific numbers provide frightening confirmation of what we suspect – and prefer to avoid.

One of the best indications that you have too much debt is when you’re reluctant to find out just how much you have. You know that you owe on Credit Cards X, Y and Z, but you try not to pay too much attention to how much you owe on each. And you never bother to add up all the balances either.

Your attention centers instead on the monthly payments for each account, because they look much more reasonable than the combined balances on all accounts.

2. There’s little or no money for savings

Cars and appliances break down or need to be replaced, homes need to be repaired and medical episodes and auto accidents require co-payments. There has to be money sitting somewhere in reserve to pay for those.

If you typically don’t have savings to cover contingencies, there’s a very good chance that the cause is either excess spending or too much debt. The two are closely related, so it’s probably some of both.

Credit card bills and other loan payments are a quiet drain on monthly income. Not only do they leave little room for a regular savings plan, but they can also force you to reduce retirement plan contributions.

A sure sign that you have too much debt is when you come to view your credit lines as your emergency savings.

3. Debt payments – excluding mortgage – are one of your top two expenses

Add up all of your monthly debt payments – student loans, auto loans, credit cards, installment loans – every loan except your mortgage. How does that total monthly payment look compared to other expense categories in your budget? If it’s one of the top two expenses in your budget, you almost certainly have too much debt.

In most households, the monthly house payment will be the largest single expense. In second place might be groceries (if you have a family), health insurance or even combined utility payments (especially if you live in an area with severe weather).

If debt payments are second only to your house payment – or if they’re your number one budget outlay – you’re carrying way too much debt. In that situation, you won’t be able to make any financial progress until your debt is brought under control.

4. You can’t buy extras without using a credit card

Because of the combination of high monthly credit card bills and the lack of savings, there’s never quite enough money to pay for extras. A weekend away, a trip to the dentist, or even a night on the town are covered by a credit card.

Although it may be normal, it’s not acceptable if you want to win with money.

5. You’re shopping for a consolidation loan

For the most part, consolidation loans are about lowering the monthly payment. You’ll still owe the same amount as you did before the consolidation, it’ll just look neater in a single package. And it’s a strong indication that you have too much debt.

It’s not that a lower payment doesn’t have merit. The problem is that the lower payment makes debt easier to live with, rather than making it go away. And the lower payment could also clear the way for more borrowing. After all, if you’re comfortable with the new consolidated payment, it’s often easy to slip back into bad habits.

Note: Matt consolidated his credit cards and auto loans using Lending Club, and he recommends it, but only if you’re going to pay it off as fast as possible and are committed to taking on zero additional debt.

Getting out when you have too much debt

If you’re experiencing one or more of these situation there’s no alternative to taking action against your debt. It’s always better to deal with it while you still have control of the situation – before it reaches the crisis stage.

Here are some tips:

  1. pay close attention to your outstanding balances – that’s your real debt situation, not monthly payments
  2. do whatever it takes to stop using credit immediately
  3. cut back on non-essential spending
  4. sell as many possessions as you can
  5. increase your income with overtime, a part-time job or some type of side gig
  6. get some money in the bank (from steps 3, 4 and 5) so you won’t rely on credit
  7. start the Debt Snowball of paying off your debts from the smallest to the largest.

It’ll take time and a good bit of effort, but soon enough you’ll get to the point where you won’t mind looking at your loan balances any more.

And that’s good news!

*******

Image : Vectorportal via Flickr

Categories // Debt, Money Management Tags // loans, money, planning

Five Reasons to Use a Real Estate Agent to Sell Your House

01.07.2013 by Kevin Mercadante //

5 Reasons To Use a Real Estate Agent To Sell Your HouseA good friend of mine from some years back—a real estate agent—used to tell me that a real estate agent is “one step above a used car salesman”. I never argued the point, it sounds about right, at least in how the public perceives the occupation. Most people, I think, see real estate agents as people who do very little work but collect a fat commission at the closing table.

In the post real estate meltdown world we now live in, my guess is that public contempt for real estate agents is even greater now. The steep decline in house prices across the country has made paying a realtor commission even more difficult to swallow. After all, why pay a realtor a six percent commission to sell a house that’s already declined in value by something on the order of 20% to 50%?

Actually, there are a whole bunch of reasons—at least five that I count—why you’d want to use a real estate agent to sell your house in this market.

It’s a buyer’s market—and you’ll need every buyer you can get

A buyers market is not the time to cut real estate agents out of the picture. In fact, you need them now more than ever! Buyers are harder to find than ever, and real estate agents have far more than any of us can ever come up with.

One reason is that they’re active in the real estate market. That gives them more potential buyers. People who call in on another property may end up buying yours, and that’s something you want to tap into.

Then there’s the multiple listing service, or MLS. This is the real estate agents ace in the hole, and the primary reason why anyone would list their home with an agent and pay a commission. Because of the MLS, real estate agents have access to more properties for sale, which also attracts potential buyers. It’s not an exaggeration to say that if your house isn’t listed on the MLS it isn’t really for sale.

You have better things to do with your time

Selling a house is time consuming. You have to market the home, hold an open house (or two or three), show the property to prospective buyers, take phone calls, and manage ads— it never ends. Usually, when you’re selling one house you’re in the process of buying another, or even relocating to a different city. That takes up a lot of time by itself, and will leave little for selling your present home.

A real estate agent can shield you from all of that. They take the phone calls, arrange showings and the open house, handle negotiations, and can market the house better than you can. They have pretty yard signs, professional looking flyers, and often maintain ad blocks in the newspaper or on the internet that they can easily add your property to.

All of that frees up your time to prepare for your upcoming move.

An independent marketing service

This is a more important advantage than most people know. Homeowners make poor sales people when it comes to selling their homes. That’s also the reason why real estate agents will ask that you not be home during an open house or during any showings.

Most buyers feel uncomfortable when they’re looking at a house when the owners are there. They’ll be afraid to open doors, look into crevices or ask critical questions. Most times they’ll move on to another property if the owners are home.

A real estate agent will take you out of the marketing phase of the home. Your job will be to keep the house need and tidy for lookers, and then to disappear when they arrive. The real estate agent will have a better chance of selling your home that way.

Handing the technical details

There are quite literally dozens of technical details when it comes to selling a house. Consider some of the following:

  1. Writing effective property descriptions and ad copy
  2. Writing up and amending contract offers
  3. Coordinating attorneys, title companies, home inspectors, appraisers and other vendors who will be involved at some point in the process
  4. Pre-qualifying buyers and recommending mortgage lenders
  5. Setting up and managing the closing process

Most of us are completely unqualified to handle any of these functions, or to know at what point in the process they need to be done.

A built in third party negotiator

Abraham Lincoln said “a man who represents himself (in court) has a fool for an attorney”, and the same can be said for a homeowner when it comes to negotiating the sale of his home.

Here’s the basic problem: as the owner of the home you’ll be anything but objective in the negotiations. As a result you could lose out on a perfectly good offer. Too much emotion is connected to a house for the owner to negotiate its sale effectively.

A real estate agent isn’t the owner of your home, and that leaves him or her with a clear head for negotiations. The agent is representing you in the sale of your home and all efforts in the negotiations will be tailored toward that end.

When ever you get involved in high level negotiations it’s always best to have a third party as a mediator. That can keep the emotion-driven side comments and objections in the background while the parties agree to agree. By contrast, direct negotiations between buyer and seller have the real potential to get ugly. That will be the end of what could have been a perfectly good sale.
A six percent sales commission is hard to swing when house prices have already fallen. But the cost of not paying it can result in a home that takes much longer to sell, or maybe never sells at all.

What do you think about using a real estate agent to sell a house in this market? Do you think you could do better on your own?

Categories // Housing Tags // real estate, sell, short sale

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