Spirituality Archives - Page 6 of 8

Learn Personal Finance from The Bible, not the Federal Government

09.04.2009 by Guest Author //

This is a guest post from Mr Credit Card from www.askmrcreditcard.com — who just recently interviewed me on his radio show. Mr Credit Card knows a lot about credit cards, but is going to shift gears a little and focus on Personal Finance. As folks like me are looking to be debt free, Mr Credit Card is extremely frustrated to see our Federal Government continue to spend like money grows on trees. Today, he is going to write about how the government violates sound money principals. If you are looking to apply for a credit card, please head over to his site.

All over the blogosphere, folks are preaching about being financially savvy and having sound money management skills. Yet at the same time our Federal Government is spending money like there is no tomorrow. The difference between the Federal Government and ourselves is that they can get away with irresponsible finances for a longer period of time than us individuals. But they both have the same nasty consequences at the end of the day. In fact, when a country goes broke, there may be even worse consequences.

In this post, I would like to highlight some common money principals (sound biblical principals), then show how the federal government is violating them.

Spend Less Than You Earn

Spend less than you earn is a basic fundamental rule for personal finance — any finance for that matter. If you do not spend less than you earn, you will have to incur debt. Have too much debt, or lose your job and you may have to file for bankruptcy. Or you may lose your home.

Why is it then, that the Federal Government can run on a 3% budget deficit for what seems like eternity? For any Household, running a deficit can only sustain you for so long. Sooner or later, things will fall apart. How?

Credit Card companies may increase your interest rates – That alone can double your interest payments. If you are living on the edge, that could spell disaster
Credit Card companies may slash your credit limit
Your car may be repossessed if you cannot make payments
You may lose your house to foreclosure if you miss mortgage payments
You may have to file for bankruptcy

No one, not even nation states can get away with spending more than they earn forever. Iceland went bankrupt last year when the wealth wiped away from their banks’ balance sheets was more than the reserves the country had. Russia went on the brink in 1998 and had to restructure their debt. Various Latin American countries have been through the same cycle and restructured their debt.

The moral of the story is… watch your pennies!

Be thou diligent to know the state of thy flocks, and look well to thy herds. For riches are not for ever: and doth the crown endure to every generation? – Proverbs 27:23-24

Debt is No Good

Generally, debt is bad. If you believe the statistics that the average American has $8,000 in credit card debt, the federal debt is even worse. Over 12 trillion, burdening each citizen by more than $30k!

The rich ruleth over the poor, and the borrower is servant to the lender. – Proverbs 22:7

Being in debt simply means we are restricted in our foreign policy. We cannot talk about human rights to China when they are our main external creditor — for that matter, we cannot talk about human rights since we detain folks for eternity at The Gitmo! Al Queda knows we cannot afford to fight another war. The North Korean President and Iran know we cannot afford to fight another war because we are in debt up to our eyeballs.

On an personal level, when we have too much debt, we become slaves to our job and our boss. We are forced to put up with stuff we would not normally have to put up with. We become hesitant toward tithing because we keep thinking about the mortgage we have to pay, the credit card bills, the auto loan payments. We don’t give joyfully.

So let us NOT follow our Federal Government’s example here by having massive debt. Instead, spend less than you earn and save. Save up to pay cash for your washer dryer, or your car. Do not get low interest rate credit cards just to get cheap financing. Pay your credit card bills in full every month and earn cash back from it rather than paying interest.

Never assume the future is always better

In 1970, the US stock market accounts for 75% of the world’s market capitalization. Today, it is about 50%. In 30 years time, the projection is that the US stock market will only account for 25% of the world’s market capitalization.

Back in the 50s, GM and the Detroit auto makers gave out huge pension benefits to their workers. Back then GM had a massive share of the US market. Not any more though. They are still No1 or 2 (depending on the quarter), but certainly not a 50% market share.

The Federal Government has various programs that will cost an arm and a leg, and are based on certain assumptions. Our social security is based on a pay-as-you go system. This system will work as long as our birth rate and population continues to grow (and yet we have endless immigration debates!). We have a medicare program that will run us broke if we continue to be generous with it. We had the first person walk on the moon! We have nine aircraft carriers (more than many nations combined) and literally drove the Soviet Union bankrupt (and in the process, we may have gone down the same route.)

Are your earnings and salary going to go up forever? Don’t count on it. Many folks who had great jobs during the 90’s dot com bubble have never made the kind of money they made back then. There are no guarantees for the future. So do not make assumptions about the mortgage you can afford based on “future projections”. Be conservative instead.

Have an emergency fund

Did you ever realize that the federal government has no emergency fund? We have 12 trillion in debt, yet no emergency fund. Many other countries in the world have emergency funds. It’s called foreign reserves. How did they get their foreign reserves? By exporting more than they import (earn more than you spend). The US on the other hand, imports more than we export (we spend more than we earn).

What happened during the financial crisis of 2008? China simply took a portion of their reserves and injected some fiscal stimulus into their economy! The good old USA passed a $700+ billion stimulus bill. Where are those dollars coming from? Well, guess we have to borrow them? Or print them? All of which adds to our debt burden and erodes the value of our currency.

Having a huge savings is the only way to gain and preserve monetary wealth. A huge emergency fund also allows you to take advantage of business opportunities. In the UK, their largest soccer clubs are now owned by a Russian Oligarch, an American Tycoon, and Middle Eastern Sovereign Funds.

How much of an emergency fund should you have? Enough for 6 months, 1 year? That is up to you to decide. But sometimes bad times can last a long time. In biblical times (ala Joseph and the coat of many colors) the famine in Egypt lasted 7 years. But through the wisdom of Joseph, the Egyptians stored up enough grain to last through the whole famine!

And Joseph said unto Pharaoh, The dream of Pharaoh is one: God hath shewed Pharaoh what he is about to do. The seven good kine are seven years; and the seven good ears are seven years: the dream is one. And the seven thin and ill favoured kine that came up after them are seven years; and the seven empty ears blasted with the east wind shall be seven years of famine. This is the thing which I have spoken unto Pharaoh: What God is about to do he sheweth unto Pharaoh. Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land; And the plenty shall not be known in the land by reason of that famine following; for it shall be very grievous. And for that the dream was doubled unto Pharaoh twice; it is because the thing is established by God, and God will shortly bring it to pass.
Now therefore let Pharaoh look out a man discreet and wise, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. And let them gather all the food of those good years that come, and lay up corn under the hand of Pharaoh, and let them keep food in the cities. And that food shall be for store to the land against the seven years of famine, which shall be in the land of Egypt; that the land perish not through the famine. – Genesis 41:25-36

Do not Rob your Future Generations

At the rate that the federal government is going, they either have to take a hit, cut back massively on spending, or pay down debts or else the burden of our debt will fall on future generations — most likely in the form of massively higher taxes. Old voters (in general) are less inclined to want scale backs in medicare (even though it is running out of control) or social security.

A good man leaveth an inheritance to his children’s children: and the wealth of the sinner is laid up for the just. – Proverbs 13:22

Are you robbing your child with your spending today? Are you saving enough to help them with their college education? Are you taking care of your health so you will not be a burden to them when you are old? Do you have plans to leave a legacy for your future generations. Not all of us have means to accumulate massive wealth. But the last thing we should do is spend money like there is no tomorrow!

But why does the US get away with running a perpetual budget and having a projected total debt of 12 trillion dollars?

A little understanding of history will hopefully clear things up.

A wise man will hear, and will increase learning; and a man of understanding shall attain unto wise counsels: – Proverbs 1:5

After World War 2 — the United States and their allies emerging victorious — a new World Monetary Order (Brenton Woods) was agreed upon. The world’s currency would sort of be pegged to the US Dollar, which in turned was pegged to Gold. International commerce would take place in dollars since the United States was the dominant economic superpower. Commodities and precious metals are all quoted in Dollars.

The emergence of the United States as a superpower (after being an emerging market back in the 1800’s) was a blessing but also came at a price. Because international commerce was conducted in US dollars, it allowed the US to persistently run a current account deficit and a fiscal deficit without facing the “immediate” consequences that would have fallen other nations. How is that so?

Here is how it works…

Countries who export more than they import will have savings — just like earning more than you spend! These savings are mostly in US Dollars since most international commerce is conducted in the good old greenback. Foreign central banks (or currency reserve boards) have to reinvest their “savings” or “export earnings”. Central banks (and civil servants/government workers) are by nature very conservative. So most of the time, they invest in US treasuries (ie. government bonds – IOU’s). These are perceived to be the safest investments because the risk of the US defaulting is deemed extremely low.

Because foreign central banks are forced to reinvest what their exporters have made back to the US, we are in a privileged position to run a fiscal deficit for a long time. If we come up with a shortfall, we just issue bonds (IOU’s) and we have a pool of willing buyers. That is how we can get away with having massive space programs in the 60’s, massive cold war style defense spending in the 80’s, and other fiscally irresponsible behaviors… like running two wars simultaneously!

Furthermore…

…in the early 70’s (when the dollar was still in the gold standard), President Nixon took us off the gold standard because the Europeans were demanding that their dollars be redeemed for gold at Fort Knox (guess we did not have enough – spent too much on the Vietnam war and space programs). Since the dollar is no longer pegged to gold, it opened the floodgates for “printing money” and “inflationary policies”. “Quantitative Easing” – a phrase mentioned very often these days is just a fancy term for printing, ie. central banks printing money and buying government debt — or in our case Fannie Mae’s debt!

Occasionally (and sometimes for long periods), events transpire to make borrowing cheaper for the government. In the late 90s and early 2000s (and I guess now), interest rates were low and some would say rock bottom. The treasury could issue long bonds at 5% yield. T-bills could be issued at less than 1%! The easy monetary policy fed through to the economy. It became cheaper to borrow. Consumers could run up debt and play the 0% balance transfer credit card game. They could get 0% financing on cars, furniture, washing machines, computers! We could get zero down loans for our home purchase, no document mortgages, easy home equity lines of credit. Heck, even credit card companies were jumping on board by allowing students (who have no credit history by the way) to apply for a student credit card!

Cut the Fat from Your Budget – a.k.a. “Entitlement Spending“

Conventional wisdom says that you cannot get elected telling folks that you want to raise taxes or cut expenditure. So federal spending naturally increases. The natural way out of this is printing money (keeping the illusion of wealth) and having inflation as a natural consequence.

Since the 30s, we have passed massive entitlement spending bills – social security, medicare. The bills keep piling higher and higher. And yet it is political suicide to talk about cutting benefits. But spending on these items is going to have serious consequences for all of us sooner or later.

Do not be like the government!

People elect government officials. They are accountable to voters. We are not accountable to any voter… but rather to God — so follow the sound money principals laid out so plainly in the bible! If you need to cut your vacation expense, do it. If your child cannot have any more golf lessons, so be it. If you do not need such a big house, then don’t buy it. If the refrigerator is still working, don’t change it! Better to be prudent than reckless.

Withhold not correction from the child: for if thou beatest him with the rod, he shall not die. – Prov 23:13

But what if the world loses confidence in the US Dollar?

If the US Federal Government continues down this insane path of financial irresponsibility, there are going to be grave consequences. One of them is that our currency will be massively devalued. The world is worried because international commerce is conducted in a currency backed by a country that runs a persistent budget deficit (and more to follow because of the projected increases in medicare expenditure). If the world stops using the dollar as an international currency, then there would be a flood of dollars on the market (since nobody needs it) and the dollar would weaken dramatically (more supply than demand). We would face inflation in our country. The risk of that happening near term is quite remote since there is no near term viable international currency. But it is a risk that we must be aware of.

Aside from the currency, if politicians have no appetite for cost cutting, then raising taxes is the only viable alternative to close the budget gap. But as the world gets more competitive economically and uses lower taxes as an economic advantage, higher taxes will burden our future generation more than we may currently realize. The wealthy folks will end up simply investing in municipal bonds (or federal tax). There will be less investments in venture capital and businesses because of it. Rest assured… our future generation will suffer.

The Federal Government is like an irresponsible parent

Even if you are prudent financially — you save, you spend less than you earn, you tithe joyfully — the actions of our Federal Government can still affect you dramatically. Countries who have had their currencies massively devalued faced high inflation and saw the value of their hard earned savings disappear!

I challenge everyone who is remotely interested in personal finance, whether you are a blogger or not, to voice these concerns. The ways the Federal Government manages finances is totally against biblical principals and for that matter any sound money principals. And the potential consequences could have a massive impact on us… even if we have worked hard and saved. I’ll end with my own anecdotal little story: “The US Federal Government is like an irresponsible father who owes too much money. Collections come knocking on the door at night, threatening physical harm, no longer accepting any more IOU’s. Instead, the children gathered, took all their savings and paid off as much of their father’s debt as they could. But that was not enough, even the grandchildren had to work to continue paying off their grandfather’s debt! And Joseph said unto Pharaoh, The dream of Pharaoh is one: God hath shewed Pharaoh what he is about to do. The seven good kine are seven years; and the seven good ears are seven years: the dream is one. And the seven thin and ill favoured kine that came up after them are seven years; and the seven empty ears blasted with the east wind shall be seven years of famine. This is the thing which I have spoken unto Pharaoh: What God is about to do he sheweth unto Pharaoh. Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land; And the plenty shall not be known in the land by reason of that famine following; for it shall be very grievous. And for that the dream was doubled unto Pharaoh twice; it is because the thing is established by God, and God will shortly bring it to pass. Now therefore let Pharaoh look out a man discreet and wise, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. And let them gather all the food of those good years that come, and lay up corn under the hand of Pharaoh, and let them keep food in the cities. And that food shall be for store to the land against the seven years of famine, which shall be in the land of Egypt; that the land perish not through the famine.

*******

photo by canadacow

In God We Trust – Not In Money, Fame, and Fortune

06.30.2009 by Guest Author //

This is a guest post by Kevin Mercadante at OutOfYourRut.com – Kevin is also a new Twitter user (@KevinMercadante) so show your support by giving him a follow.

Ed McMahon on Tuesday; Farrah Fawcett Thursday morning; Michael Jackson Thursday afternoon; Billy Mays on Sunday. Three died, as we say “before their time”. It isn’t unusual to awaken to the news that a celebrity has passed away, and while we might listen and give pause, by the next day we’re back to business as usual. But four in a space of less than one week-two in a single day-THAT has to make you think.

McMahon, Fawcett, Jackson, Mays; they weren’t ordinary people, not like you and me. They were stars, household names. You knew who they were even if you didn’t like them. You had no choice; their faces and their stories, for good or ill, crowded the pages and images of the popular media. We saw their lives in every minute detail-their struggles, triumphs, tragedies, relationships and even legal entanglements-play out as if life was their stage, and we their audience. They weren’t just living life, they were leading it; by certain definitions, they were the best examples of what we might become, could become, if only…

Alas, Behind the Facade, Even the Stars Are Human

I don’t remember life before Ed McMahon, and while I wasn’t a committed fan of his, he seemed to always be there, like an icon of Old Hollywood. He was steady and reliable with a disarming wit that made him a somehow comfortable and credible figure, if such can be said of any TV personality. But lest anyone think fame and fortune are insulation against disaster, in 1995 McMahon lost a son to cancer, and after decades of success in the public limelight, stories abounded of McMahon’s financial troubles, including a protracted foreclosure saga on his Beverly Hills mansion.

Unless you’re over 40, you may not completely comprehend the pure celebrity that was Farrah Fawcett. On a single night in the fall of 1976 she hit the scene and literally seized the culture from what ever forces had held it before. For guys, it was undeniably a sexual thing (OK, there I said it). For girls, she was glamour personified and all things Farrah were to be imitated, especially her hair style. She was a figure who defined the style of a decade, and she accomplished it all largely in only a single season of full time work on the mega hit series Charlie’s Angels. For a season of life, Farrah wasn’t human; she was somehow superhuman, as if she’d risen above the human condition and ascended to something higher.

But like Ed McMahon, Farrah Fawcett’s life wasn’t trouble free either, especially at the end. Before her death she struggled in a three year battle with cancer, and only weeks before her death, her son-her only child-was serving a drug related sentence and was unable to be with her at her death.

Michael Jackson was a once-in-a-generation mega talent who could entertain us to the rafters but, for reasons beyond himself, seemed to bring out the worst in us on a number of fronts. When Jackson was on top of his game, he didn’t have fans so much as he had disciples-people who hung on every song, every word, every public performance, every nuance of his being. There’s something unhealthy about that level of devotion to a performer, or to any human being, and Jackson wasn’t the first star to have such a devoted group of followers, but his was one of the biggest ever.

On the flip side, when Jackson’s much covered, much celebrated legal entanglements dominated the media, it was disturbing to hear the number of people who 1) didn’t know him or his alleged victims personally, 2) weren’t present or otherwise involved in his trial and 3) had no access to the facts or evidence in the case, yet were steadfastly certain of his guilt. There was something about Jackson and the charges against him that made “good people” feel better about themselves by virtue of their belief and profession of his guilt.

So much for “Let he among you who is without sin, let him cast the first stone” (John 8:7); that pivotal verse gets thrown under the bus-with the accused-when ever there’s a trial. Even though we don’t know the facts or the people involved, we still know-right? God have mercy on us all!

Billy Mays wasn’t the only TV pitchman to achieve star status, but he took it to a higher level by becoming the venue’s only superstar. A man of humble beginnings, he spent many years pitching products at state fairs and on the boardwalk in Atlantic City, NJ, before becoming one of the most recognizable faces in America only a few years ago.

While there isn’t any “dirt” on his personal life, which by all accounts was one led quietly, on the air he was a bit, well…obnoxious! But that was part of his edge, or even of his “charm”, if you prefer. It was the X factor in his personality that drew us to him, and maybe more importantly, made us recognize immediately anytime he came on TV.

The Things of This World

So why am I writing about this on a personal finance blog — a Christian one at that? And what at all does it have to do with the topics contained in this site? Maybe nothing, maybe everything.

This is one of those moments in time when all there is about the world looks a bit shaky, a little less certain. It begs the question, if the “stars” have fallen what does that mean for us mere mortals? Perhaps this is a moment when God is calling on us, reminding us not to dig in too deep, not to put faith in the things of this world.

Our culture is obsessed with money. Our culture is also obsessed with celebrity. The combination of the two can produce something that looks remarkably like the mental and emotional images of what we might call “the perfect life”.

Maybe perfect is too strong a word, but if we can be rich and famous, we may reason that, we can find a way to deal with the rest. This is the image we’re force-fed all the time by the media. Why else is the media so smitten with how celebrities dress, what they do, where they go, their relationships, who they hang with and even what their opinions are on subjects they clearly know little about? And why does anyone even care? Because we’re rooted in this world, because we might dare to think that nirvana is attainable as evidenced by some who seem to have reached it.

If we’re completely honest, even Christians can and do succumb to such thinking, and how could we not; we’re virtually surrounded by it. But rest assured, there is no perfect life this side of heaven, nor was it ever meant to be. We need to keep our desires and aspirations in check, our feet on the ground and our eyes fixed heavenward.

Perfection is not worth the pursuit, even and especially when it comes to money and personal finance. We’re working through the muck of life and money, trying to do the best we can with the resources we have. But all we can do is the best we can do-if we can even achieve that-and our primary focus needs to be on getting out of this world with our very souls, and not necessarily with the fattest 401k or a mortgage free home.

While we pursue better personal finances-and we’re called upon to be responsible stewards and providers for those dependent upon us-it’s worth remembering that not only will such achievements be temporary, but they also provide no salvation for us or the people around us. An improved life perhaps, but perfection and salvation won’t be found in it, no matter how successful we may be.

At this moment, if we take nothing else from the deaths of these stars, we need to remember that if their money and their fame couldn’t save their lives, than nothing we in the invisible masses can do or attain will spare us either.

Live life as best you can, lower your expenses, payoff your debts, save for the future, but always remember that all that we can see is temporary and that true and permanent salvation cannot be had in this world, even if we become rich and famous.

Presidential Quotes on Trusting God

“Of all the dispositions and habits which lead to political prosperity, Religion and Morality are indispensable supports. In vain would that man claim the tribute of Patriotism, who should labor to subvert these great pillars of human happiness, these firmest props of the duties of Men and Citizens. The mere Politician, equally with the pious man, ought to respect and to cherish them. A volume could not trace all their connections with private and public felicity…And let us with caution indulge the supposition that morality can be maintained without religion. Whatever may be conceded to the influence of refined education on minds of peculiar structure, reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle.”
– George Washington in his Farewell Address of September 17, 1796.
“The world is very different now. For man holds in his mortal hands the power to abolish all forms of human poverty and all forms of human life. And yet the same revolutionary beliefs for which our forebears fought are still at issue around the globe—the belief that the rights of man come not from the generosity of the state, but from the hand of God…… Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty…… With a good conscience our only sure reward, with history the final judge of our deeds, let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
– John F. Kennedy at his Inaugural Address on January 20, 1961
“Without God, there is no virtue, because there’s no prompting of the conscience. Without God, we’re mired in the material, that flat world that tells us only what the senses perceive. Without God, there is a coarsening of the society. And without God, democracy will not and cannot long endure. If we ever forget that we’re one nation under God, then we will be a nation gone under. If I could just make a personal statement of my own — in these 3 1/2 years I have understood and known better than ever before the words of Lincoln, when he said that he would be the greatest fool on this footstool called Earth if he ever thought that for one moment he could perform the duties of that office without help from One who is stronger than all.”
– Ronald Reagan on September 20, 1983

DFA is passionately dedicated to helping others break the bondage of debt using biblical principles.

Identify & Overcome Money Anxiety & Stress in Relationships

06.25.2009 by Matt Jabs //

My wife & I had a very important personal finance breakthrough recently, one I am excited to share in order to prevent others from having to reinvent the wheel…

Thanks to the folks who like to label things… there is a new “diagnoses” of sorts that has come onto the scene and is growing fast thanks to the recent housing crash. The acronym is all too fitting… M.A.D. or Money Anxiety Disorder is basically a fancy way of saying that people are more stressed out than ever about all the debt they have gotten themselves into.

“Whether you experience great peace of mind or constant anxiety will depend on getting your finances under control.” – Robert G. Allen

Today I’ll touch on how this “disorder” has effected our lives, how we stumbled upon it by accident, and the plan we have to overcome it.

A Little History…

My wife hates math. She’s not necessarily bad at it, she just doesn’t like it.
She is a “right-brained” thinker… almost without exception.
She does not enjoy the topic of personal finance.
She does not fully understand the topic of personal finance.

Though it was never much of an issue prior to our “financial awakening” in January of 2009 – now that we’re actually tracking our finances Mrs. Jabs has to deal with our money matters far too often for her liking.

I, on the other hand, love math!
I am one of those analytical “left-brained” types who thought high school Algebra class was actually fun.
I am very passionate about personal finance.
I love learning more & more about personal finance.

Armed with this knowledge of our disparate — albeit balancing — attitudes toward all things math & finance, we unanimously decided to elect me as the Family CFO.

As a product of these realities, no matter how brief, simple, or painless the financial matter at hand may seem – like Dr. Jekyll quickly becomes Mr. Hyde – when engaged in a discussion about finance, my wife instantly transforms from a happy camper into one frustrated & dissatisfied customer! Which, both of us ALWAYS mistakenly interpreted as anger…

The Breakthrough…

Therein lies the problem… we always misinterpreted her anxiety for anger! The other night, after about an hour of solid communication, in passing my wife said, “I just get instant anxiety as soon as we start talking about anything to do with money.” As soon as she uttered those words I stood up & triumphantly replied, “Wait a minute! That’s it. You’re not angry… you’re anxious!”

It is important to define the often undiagnosed or misdiagnosed role anxiety & stress usually play in personal finance. When unaware of their presence… you may experience:

The appearance of anger – Although anger may be what you see… it is not the root emotion. This is what baffled my wife & I both. She appeared angry, and felt angry, but was not able to successfully illiterate what was causing the feelings of anger… it was anxiety.
Eroded communication – No sooner than we began a discussion about our finances, this apparent angry attitude appeared which immediately broke down our ability to communicate effectively.
Quickly enacted defense mechanisms – Human nature dictates that negative emotion in one person, will elicit a negative response in another. This builds upon itself and leads to a defensive point-of-view from both involved parties, which breaks down your ability to solve problems effectively.

After discovering the existence of money anxiety in my wife, we naturally began to search for the root cause of the anxiety itself.

What is Causing the Anxiety?

The good news is… there is hope! In the presence of anxiety there is always a root cause. Once we discovered the anxiety, it did not take long for this math/computer/analytical geek to break down the equation into manageable components. Here is a list of common sources of anxiety as pertaining to personal finance:

Dislike for math – Okay, we had already established this, so I will continue to handle the detailed number crunching & just ask her to focus on helping me make decisions based on the end resulting numbers.
Fear of the unknown – If you are not the one in control of the finances, you can have a feeling of being uninformed that may lead to anxiety. This wasn’t really the case with us since I always strive to give her any info she needs to make a decision.
Feelings of insecurity based on ignorance – Not understanding the topic at hand is a point of contention for a lot of people, especially for men. My wife & I decided this was not the main source of her anxiety, but may be a small contributor.
Lack of security – If your Emergency Fund is inadequately funded, you are only one job loss away from hard financial times with no adequate buffer to hold you over in the interim of finding new work.
Inadequate buffer in checking account – If you cannot pay all your monthly bills on the first of each month because you simply don’t have enough money, you are going to have to deal with a whole new set of problems. You have to wait until you get your second monthly check to pay some of your bills. This could cause you to be late on some bills, and will cause you constant worry about whether or not you are going to overdraw your account!
Lack of dependence on the Lord – Peter instructs us regarding faith in Jesus, “Casting all your care upon him; for he careth for you.” I Peter 5:7. Believers need to revisit the scriptures for wisdom & prayerfully consider whether or not they are actively trusting in the promises of God.

So What’s The Answer?

First of all, communication is paramount. Although Mrs. Jabs & I talk about money quite often, we never sat down to consider points of contention or anxiety each of us may have in relation to our financial health. Heck, we didn’t even realize that anxiety was the problem… we had wrongfully attributed our contention to the emotion of anger and were just “dealing with it” until I finally snapped and informed my wife that I couldn’t handle the poor attitude any longer.

Secondly, go over the above list to decipher the source of the anxiety. For us the largest sources of anxiety were last few points:

Lack of security – BINGO! After realizing her need for security in other areas of our lives, I mentioned this and Mrs. J agreed that she was definitely nervous that we were not adequately prepared for an emergency. In response to this problem, we have adjusted our goals to reapportion the funding of our emergency fund and the amount we put toward debt repayment.
Inadequate buffer in checking account – BINGO! Although I have an adequate buffer, and have been advising my wife to increase her checking account buffer for a few months now, she had not heeded the advice and therefore was always anxious about having enough money in her account. To combat this we committed to supplying her checking account with a one month buffer, so she can pay all monthly bills on the 1st of the month, and no longer has to worry about whether she has enough to pay any of her bills.
Lack of dependence on the Lord – BINGO! We can all use a renewed & heightened faith in the Lord and His Word. We plan to turn over more of the emotional burden to Christ since He promises in His Word that He is ready & willing to take it! Ahhh, what a blessed hope!

Some may ask, “If you love personal finance & math so much, and your wife is the exact opposite… why don’t you just handle all the finances & stop consulting her altogether?” Great question.

I feel I must explain something…

The Importance of Teamwork

“Just because one of you earns the paycheck doesn’t mean that person should lord over how the money is handled.” – Suze Orman

Although I am The Family CFO, it is very important to me that my wife be at least somewhat involved in the family finances. Here are just a few great reasons why you need both spouses involved in the money decisions of the house:

I need her input – Both man and woman bring important & necessary input to the table. We think differently, but when you combine the differences in those thought patterns you wind up with a more complete and well-rounded perspective. I can make decisions without my wife and she can make decisions without me, but I believe the best decisions are those that are made together… with both of our input.
Realization of situation – Both spouses need to have at least a basic understanding of where they are financially. It is crucial that both individuals carry this information with them so they can make informed purchasing decisions day in & day out. Imagine how frustrating it would be for me if my wife kept making poor decisions because she simply was not properly informed. To keep her in the dark just does not make good financial sense; even if it may seem like a good or easy solution for a season.
Repel the “money grows on trees” mentality – Again, if one person in the relationship handles all things financial, human nature dictates that the other person may very well take this fact for granted. If you continually do something for someone, they begin to lose touch with the reality of what is being done. It is important to revisit & review the process on a regular basis to maintain a properly grounded view of how much money is available & for what.

I find the practice of communication worth repeating… successful communication and teamwork are essential to the health and sanctity of any relationship; the topic of finances are no exception.

In Summary…

Always maintain open lines of communication, this is crucial to overcoming financial anxiety and stress in relationships.
Define each others strengths & weaknesses regarding personal finance, and delegate jobs accordingly.
Identify the root cause(s) of the anxiety and/or stress.
Work to decipher the changes that need to be made to alleviate these sources of contention and implement your changes.
Remember to work together as a team! My wife’s mantra is “Teamwork makes the dream work”!
Lastly & most importantly, remember to trust in the God who created us. He is able!

Identifying & overcoming money anxiety & stress may seem overwhelming at times, but if you follow these simple steps and concepts you will be amazed at how fast you can increase the health & happiness of your financial relationship.

DFA is passionately dedicated to helping others break the bondage of debt using biblical principles.