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While I was thinking about the Bailout that Almost Was last night and the Bible, the Lord brought a parable to mind, and I saw it in a different light.
This parable, found in the Gospel of Luke, was used by Christ to talk about the fact that we should focus on “laying up” treasures in heaven, rather than treasures on Earth. Last night, however, I thought about it terms of credit and debt.
And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully: And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits? And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods. And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, [and] be merry.
But God said unto him, [Thou] fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided?
So [is] he that layeth up treasure for himself, and is not rich toward God. – Luke 12:16-21
A Heavenly Focus
The lesson of this parable is two fold—at least to me. The first thing we learn is the importance of a heavenly focus. If we are focused on building our treasure here, and not there, we are fools. This is because death is inevitable, and when we stand before our Creator we cannot take our money with us.
You Don’t Know Tomorrow
This is the lesson, however, I had last night. The man was a fool because his plans did not reflect reality. He was planning for a tomorrow when there wasn’t any.
This is the same thing that you do when you swipe that credit card to pay for something. You believe that, when that bill comes due, you’ll have the money to meet the obligation. Debt, by definition, is paying for something with tomorrow’s money.
Now, whereas the rich man above ended up losing much in death, you would probably actually end up better since you wouldn’t have to pay the tab (your estate might—and that means you may end up leaving you kids with the debt).
The problem is, though, that it’s much more likely that you could end up without a job, or in a difficult circumstance, and that money that you borrowed you won’t be able to pay back.
Hence the lesson of this bailout, and what I got from the parable, is that it’s important to live for today rather than counting on tomorrow. Tomorrow may not come, or it may not bring the same things that we see every day. In which case, it’s better that you’ve been current, rather than behind.
You know how I feel about this and again I don’t know if this should be a “applicable for all believers” type deal. I feel it falls under disputable matters. We use our credit card every month for our expenses strictly to get the benefits from the card. And it has paid off – the miles we’ve gotten from the card have paid for two airline tickets for my husband to go to India 2 years in a row to do mission work, which would have been about $2000 out of pocket had we not had the airline miles. At the same time we save every cent that we make during the month so we have more than enough to pay our balance. I don’t consider this borrowing on the future, and in the event something happened to me, there would be enough saved from the current month to pay the current month’s expenses. I see it as no different than if I was using cash to pay for my expenses; it’s all coming out of the same monthly balance. I would feel different if I was buying things today and either spending all my cash at the same time or buying things today with no intention of paying them off for 3, 6, 12 etc. months. I think that is a completely different scenario. I feel no guilt or conviction over how we manage our finances.
However, just as how I don’t feel your way is for everyone, my way isn’t for everyone either. My way requires a degree of financial self-control and responsibility, and I would NEVER recommend my way for someone who has struggled with managing their money. No sense in placing a stumbling block before a struggling brother (or sister). But to those who do not struggle in this area, I do not see anything wrong with taking advantage of financial benefits AS LONG AS they are managed properly and responsibly (and by saying this, I hope it’s understood I’m only talking about monthly expenses, not overspending and purposefully living beyond one’s means).
Ah debate… I guess it’s good for the soul? 🙂
Rachels last blog post..Giveaway: Who Dat Say Dey Gone Beat Dem Saints???
I feel like I should just add one more thing. I know. Min, that you are working hard to remove all debt from your life and I think that is awesome. AWESOME! It is my goal to one day have no major outstanding debt (car, house loans, etc.). We’re fortunate we have no student loans and no revolving credit debt, so hopefully we can keep the other two under control when we finally move out of the seminary. That said I will probably always use credit for my monthly expenses as long as I am not paying interest and I am getting benefits from it. When the benefits stop, I’m going back to the ol’ debit card. 🙂 We lost 2/3 of our income when my hubby came to school down here, so you can imagine the task we faced of training ourselves to live within our new means still using a credit card for our monthly expenses. It took (and still takes!) a LOT of self-control.
So… I commend you on your efforts and thank you for sharing so transparently the issues in your life. You have encouraged me to rid myself of long-term debt and I pray you’ve done the same for others who come by your blog.
Rachels last blog post..Giveaway: Who Dat Say Dey Gone Beat Dem Saints???
@Rachel: The problem is that most people do not pay off their balance every month, and the principle of this lesson is what I was getting at. When you simply put it on credit expecting to have the money tomorrow, you’re mortgaging tomorrow for today. When you save money, you’re increasing the likelihood of having that money, but that’s assuming that the highest priority thing to spend your money on will be your debt that’s coming due. When you have an emergency fund and insurance, you’re making that an ever safer bet.
But it’s still a bet.
Tomorrow something could, God forbid, happen to someone you love, or you could lose something that you need to replace, and when the priority changes from repaying that credit card debt because “I’d rather pay the X% because this is more important,” you’ve fallen into the trap I’m talking about.
Hopefully you never get there, but tomorrow is uncertain.
I commend your financial discipline, and I’m not encouraging you to change, but I’m attempting to point out the reality of the situation, especially for those that look toward their card as their emergency fund, and those that don’t mind carrying a balance.
You don’t know how freeing it is to pay for everything in cash, knowing that you own the thing and don’t have to worry about the bill coming in the mail until you’ve done it for a while. I don’t save to pay what I’ve already bought, I am learning patience in saving for something that can way until tomorrow.
Fair point, Min, and I understand it. But the point I was making is the money is going to be spent either way – whether I put stuff on a credit card and pay it off at the end of the month, use a debit card that comes straight out of the checking account, or withdraw a wad of cash at the beginning of every month and allocate it for expenses. Let’s say I took the latter route and withdrew cash at the beginning of every month and divvied it out into envelopes for my monthly spending. Then say I lose my job, have an emergency (tires or something that would cost several hundred dollars). Depending on what time during the month the emergency happened, some of most of the money would already be gone for basic expenses. I would still have to adjust my monthly spending regardless of what method I used if there wasn’t enough in savings or emergency fund to cover the emergency (and obviously this would be a longer-term adjustment if the emergency was loss of job or income, not just a one-time large expenditure). That’s the point I’m trying to make. We’re charitable, we save a portion of our income every month, and we are responsible with our expenses by not living beyond our means (meager salaries don’t allow us that luxury – HA!). Worst case scenario, I would pay off whatever I had already put on the credit card for a certain month, because in emergency time the last thing myself or anyone needs is revolving credit hanging around. My point is that the money is already there for it, plus a cushion to if we fall on hard times. But that all takes planning and preparation and discipline on the parts of all involved.
You are very right in saying the future is uncertain, but it does work both ways. I might have mentioned my friends who were doing the 15 year plan of renting and saving so they could pay cash outright for a house is also planning on the future. They were planning on having the same rent (which is possible if they are lucky enough to get a rent-controlled place) and the same income so they could save a certain portion every month. Truth is they could lose their jobs, have their rent raised, and a whole number of things. Now OBVIOUSLY if the worst would happen it’s better to be in a position of renting (still an obligation but one a person could get out of if they could find a different place to live) with some savings than left holding a mortgage, but it’s still betting that things stay status quo in the future.
And I know that I (and the people I know who handle their finances similarly to mine) are in the minority. Most people have a hard time managing credit and especially when it is given so freely and supposedly with no strings attached. I think you hit the difference – people who see their card as an emergency fund. I don’t see my card as an emergency fund – I see my EMERGENCY FUND as my emergency fund. 🙂
I think what you are doing is great. It’s important to educate people on the dangerous waters the misuse of credit can lead to.
Rachels last blog post..Giveaway: Who Dat Say Dey Gone Beat Dem Saints???
@Rachel: I really don’t see where we disagree that much here. The only difference is that I don’t put off paying for what I buy today, and you do and gain some benefits from doing so. I also won’t have to ask myself the question of whether a given expense is worth delaying my payment and only making a minimum payment where you will have to be more disciplined than I.
So it turns out that you’re the better man– I mean, woman. I can deal with that. For a majority of people, however, they cannot.