Calling All REAL Drivers
by Sean Adams
Photo by Samuele Errico Piccarini on Unsplash
I have an idle game on my phone (I try not to let it be an idol game, LOL). That means it works on stuff growing and improving while I'm away. In this idle game, I'M RICH BABY!!! But my net worth IRL (in real life) is a bit short of the multiple-Zillions of dollars made from lemonade stands on Mars. But the truth is just like in the game on the phone, many of us are playing with money. But it's a far more dangerous game IRL (in real life).
We're in a new message series this month: Broke is Normal. Don't be Normal. Be Weird. As you can infer from the title, it touches on the topic of finance and, in a genuine, compassionate, and in your face way, provides a wake-up call to all of us that's been asleep at the wheel when it comes to money.
The numbers don't lie:
37% of households carry credit card debt 1
43% of people have car loans. 2
63% of people with a home have a mortgage 3
1/6 people have student loan debt 4
1/5 people are paying 50–100% of their pay in debt repayment. 5
40 percent of adults can't cover a $400 emergency expense 6
And this is normal. There has been consistent growth in four primary areas of debt — home, auto, student loans, and credit cards. Not only that, the worst part is if debt continues to rise above spending like it is now, it will be unsustainable–possibly creating a debt crisis the likes of which we've never seen. "...debt held by the public will rise from 78 percent of GDP this year to 144 percent by 2049 – more than a third higher than the historic record of 106 percent set just after World War II" 7
I've heard credit called a "license to pretend."
I used to let my kids “pretend drive,” when they were younger. Here’s how: you take the kids to an empty parking lot. You push the seat back and you control the gas and brake, they steer the wheel.
How many of us are pretenders? We pretend like we own a car...we don't own that car. We pretend like we own our paycheck–do you, though? Doesn't Fedloan servicing, Navient, Sallie Mae own your paycheck? Home Loan America or CapitalOne owns a majority of our paychecks. Not only that, we're feeling the crushing anxiety of poor decisions and a lack of patience compounded by our inability to delay our gratification.
Between Social Media and the get it now culture, everything screams at us every waking moment to consume, buy, get it now, before it's too late, and our lack of discipline pushes us to swipe and insert our credit cards or click now. Click now and Pretend you had the money all along, and you're getting a 28% interest loan from CapitalOne to buy that beautiful outfit you saw that one time on Instagram. It's going to come in the wrong size anyway.
We're driving in Fantasy Land, going 180 mph and headed for destruction–for slavery. Slavery? Yes, slavery: The Bible says, "The rich rule over the poor, and the borrower is a slave to the lender." 8 Oh, we don't feel like slaves, but we are. "Tell me, is it slavery if you get what you want?" YES! It's still slavery! Many of us are riding around in the master's car with a Master's Card in our wallet and going to sleep in Master's Home. You say it's not theirs. It's mine. I'm no slave! My name is on that credit card...yes, as an authorized user to write loans against the credit limit with an agreement to pay every dime back with interest. That's not all the card itself is not our property. Read the cardholder agreement of any credit card: "You must return the Card to us or destroy it if we ask you to."
“Your Credit Card Is A License to Pretend”
So your credit card is a license to pretend, how can this short blog post help you to stop pretending and live in reality, within your means, and free yourself from the master's grasp?
I'll give you two keys to freedom from the shackles of debt.
Key #1 Count the cost
What does it cost you? Take a typical credit card with a $5k balance. We'll say this person has a very high credit score and got this card with a 14% APR and no annual fee. To pay off this card, making only minimum payments would take 22 years, and eventually, this cardholder pays $5,887 in addition to the original 5k. A total cost of $10,887.00 and possibly years of stress, and missed opportunities. Understanding the real cost of any course of action is critically important to success. The Bible tells the story of a man who started to build a tower, but he didn't correctly calculate the cost of the tower, and everyone made fun of him because he couldn't finish what he set out to do (Luke 14:28).
Key #2 Being Content
When I buy something from Amazon, I check three things. 1. Price 2. Whether it's Prime Eligible 3. Reviews. If you're anything like me, you want to know that whatever you're buying has some social proof. Social Proof is excellent, and it's a good thing. Social Pressure is not so great. Just because something is five stars and everyone on Instagram or Facebook has it doesn't mean I need it. Need it so much I have to take out a loan to get it. That's something we all should realize. The use of a credit card is convenient, too convenient. Imagine every transaction to be like going to a bank and asking for money for whatever you're last purchase on Amazon was. My last Amazon purchase was a pack of mini-light bulbs for my refrigerator water dispenser–they didn't work. I'm not joking. It didn't work.
Pretending Doesn’t Work
Just like this normalized view of debt doesn't work out of all the elements that affect this debt problem. The lack of contentment could be number 1! Many of us see a perceived need or problem; we run to a store or Amazon and click or swipe to solve what we thought was certainly a huge need. Once that's over, we feel great, then we after some time we do it again. This routine is called the Habit Loop. It's the explanation behind habits like smoking, drugs, and other forms of addiction, sound familiar?
You + God Can Do This
Being content isn't easy, but with God, you can pull it off. You can have freedom from one of the most oppressive chains of all: Envy. 9 In 2020, make it a goal to put contentment ahead of envy and take time to calculate the actual cost of those quick swipes and clicks. Let's put down our credit cards altogether and ask ourselves what kind of impact could I make on the world if my money were all mine? No more pretending we really have it all under control, when someone else is can hit the brakes. Let's all turn these cars around toward real ownership, real debt freedom, really living within our means. How much could I increase giving to those in need? How much could I invest in the Kingdom of God? How liberating would it be to know that some bank doesn't own everything you have, run by someone you don't know and have never met, whom at any point can call in that loan, destroy that card, and potentially wreck your financial life? I call that freedom, freedom to REAL Driving.
References
https://www.creditcards.com/credit-card-news/credit-card-debt-statistics-1276.php
https://www.fool.com/retirement/2017/05/28/guess-how-many-americans-now-have-auto-loans.aspx
https://www.magnifymoney.com/blog/mortgage/u-s-mortgage-market-statistics-2018/
https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/
https://www.cnbc.com/2018/08/20/how-much-debt-americans-have-at-every-age.html
https://www.cnbc.com/2018/05/22/fed-survey-40-percent-of-adults-cant-cover-400-emergency-expense.html
https://www.crfb.org/papers/cbos-2019-long-term-budget-outlook?gclid=EAIaIQobChMItOTr_bPv5gIVRdbACh14ng5oEAAYASAAEgKCcvD_BwE
Proverbs 22:7. https://www.biblegateway.com/passage/?search=Proverbs+22%3A7&version=NIV
Ecclesiastes 4:4 and 1 Timothy 6:6 https://www.biblegateway.com/passage/?search=Ecclesiastes+4%3A4%3B+1+Timothy+6%3A6&version=NIV