Tag Archive | Bible

Inflate Your Usefulness, Not Your Lifestyle

Lifestyle inflation is a popular personal finance metaphor for the phenomenon of expenses endlessly rising to match (or surpass) income. It captures the predicament of the 37% of Americans living in one of the world’s richest countries who claim to be too broke to save. And it describes what those pretending to poor want to avoid. Bloated spending not only causes financial problems, it also makes people less useful. It ties up time and money so that it all has to be spent on lifestyle maintenance, leaving less room for meaningful pursuits like family, friends, and volunteering. Plus, when life is centered on convenience and acquisition, people miss out on the satisfaction of becoming handy, resourceful, and helpful.

But those of us who don’t inflate our lifestyle also face potential danger. Have you ever thought about what you are inflating instead? We need to invest in something we can put stock in, and I don’t mean the stock market. If all you inflate is your bank or retirement account, you’re missing out. Saving and investing are worthy, responsible steps that we preach. But we all know there’s more to life than money. Most people think this “more” is freedom: from the 9 to 5, having to worry about money, or keeping up with the Joneses. Freedom is depicted as early retirement, working for yourself, traveling-hacking, or otherwise finding happiness outside materialism.

These are all appealing replacements to lifestyle inflation. But will they pay the dividends of a joyful and productive life? It’s easy to place false hope in the financial freedom or frugal ecstasy so often promised. A growing body of research documents the correlation between increased wealth and decreased interpersonal skills, emotional health, and happiness:

  • Lonely At The Top, by Thomas Joiner, documents the tragic pattern of men achieving success and wealth, only to find themselves without companionship.
  • In the Boston Globe article “Why It Matters That Our Politicians Are Rich” Britt Peterson reports, “Rich people have a harder time connecting with others, showing less empathy to the extent of dehumanizing those who are different from them. They are less charitable and generous. They are less likely to help someone in trouble.”
  • Richard Ryan’s report in The Annual Review of Psychology (2001) found that a focus on financial and material goals correlated to a lower sense of well-being and found money is not a reliable predictor of happiness.
  • Madeline Levine’s The Price of Privilege states the “newly identified at-risk group is preteens and teens from affluent, well-educated families.” These privileged kids are more likely to suffer from depression and other emotional ill health.

Yikes! There is a real gravity toward these scary outcomes for the wealthy. Pursuing wealth for different reasons doesn’t make us immune. Let’s heed these warnings and not let the journey to so-called freedom make us slaves to side hustles and financial goals. We want to remain flexible while increasing our financial flexibility, and the key lies in what we’re inflating along the way.

To us pretending to be poor is about inflating our usefulness at the same time we invest for future needs. Our financial journey isn’t just about us, or even our family.  If we get to “retire” early, that’s just icing on the cake, because we’re using our time and money to build a good life NOW. And the good life is not just about geeking out over spreadsheets, net worth, and shopping at ALDI. It’s not just about finding happiness in frugal hacks and free pleasures. The good life is about helping others.

The outcome of inflating your usefulness isn’t to leave yourself destitute, but to do good, to be rich in good works, to be generous and ready to share,  storing up for themselves the treasure of a good foundation for the future, so that they may take hold of that which is life indeed” (1 Timothy 6:18, 19). So how can deflating your lifestyle inflate your usefulness?

  1. Work to live, don’t live to work. A good work ethic is important, but working constantly while ignoring family, friends, faith, and those in need is not a balanced or healthy life. If you’re hustling for the proverbial dangled carrot, maybe it’s time to free yourself from the rat race, not necessarily by retiring early, but by deflating your usefulness so you don’t need that carrot.
  2. Get useful by DIYing. Some people feel excited when they find the next new product that will make their life easier. Don’t get me wrong, I love my microwave and dishwasher. But others seek accomplishment in spending less, and this often results in becoming more useful. For example, I love Indian food, but I don’t love spending money at restaurants. So I’m learning to make Indian food. Neil enjoys riding his bike because it’s free exercise and saves on transportation costs. For both of us these money-saving measures are enjoyable in part because we feel accomplished after a challenge.
  3. Share the usefulness. Now that you have amassed helpful DIY skills, you can help other people. When someone need helps with a broken car or house, you can help. When someone loves Indian food, you can cook. You are saving other people money, perhaps teaching them useful skills, and feeling satisfied by widening your sphere of usefulness. Even if you don’t have amazing skills, simply by making time to help others you will find a world of needs to meet. Volunteering for an after school program, the high school group at church, to help a friend move, or to babysit are all ways we’ve found to be useful. Other ideas include volunteering at a nursing home or hospice center, Habitat for HumanityBig Brothers Big Sisters, English tutoring for refugees, mentoring teens in prison, or taking a short-term missions trip. (I’m going to India this summer!)
  4. It is better to give than to receive. Freeing up money to give to charitable or faith-based causes is hugely rewarding, and, need I mention, helpful! For example, donating to disaster relief in Nepal would expand your usefulness to a global scale. Yes, you have to do a little research to make sure an organization is trustworthy. But there are lots of reputable places and you can check them out on charitywatch.org or ministrywatch.org. Or visit a local food bank, after school program, or homeless shelter and check it out yourself.
  5. Be a good friend. The research on sad, rich Americans should be sobering. Thankfully the antidote is simple and free: have friends. Caring about other people and sharing life together can keep you grounded and balanced throughout your financial journey. You’ll avoid ending up lonely at the top, and you’re bound to be useful if you’re a good friend.

Titus 3:14 describes usefulness well: “Our people must learn to do good by meeting the urgent needs of others; then they will not be unproductive.”

What DIY success are you most proud of? What have you learned from sharing your time or money with others? 

Are Short-term Missions Trips a Scam?

Neil meeting our sponsored child.

Neil meeting our sponsored child 2 years ago.

I’ve already alluded to my upcoming  short-term missions trip to India this summer. While staying in India is relatively inexpensive, flying an open jaw there in late August is not, and we’ll also do a fair amount of flying in-country, which also hikes the price. Friends and family have generously donated toward my trip, and I cannot express my gratitude enough. In addition to taking the edge off the $3500 price-tag, knowing that a host of comrades are behind me offers inexpressible moral support.

Neil also “raised” a portion of the cost by flipping a car. With fairly minimal effort, he turned an $1800 profit on a car a co-worker sold him at a killer friend price. More on this soon.

But short-term missions trips invariably raise questions about the best use of funds, and as this is a fair objection I’ve wrestled with myself, I hope this post will provide some answers. The trip may also raise an eyebrow from a personal finance perspective and here I’ll address why it’s worth the money to us.

Couldn’t that money be better used over there?

Could the $3500 cost of the trip feed a lot of hungry kids, dig some clean-water wells, or fund many micro-loans? Absolutely. I care about those causes, and we donate monthly toward poverty relief and church-planting in India & Ethiopia. In fact, generosity is one of our goals for pretending to be poor. You can read about why to give away money in these posts:

I also believe this trip will change my sense of agency and urgency regarding these causes. Neil’s (somewhat less expensive) trip to India two years ago spurred him to help raise the awareness and funding to sponsor an entire rural village, bringing in food, clean water, hygiene education, agricultural development, education for children, skills training for adults, and spiritual leadership for those interested. The Adopt-a-Village program is a $75,000 total commitment over five years. This far exceeds what it cost Neil to witness the stark needs in a rural village first-hand, though it was certainly not a poverty tourism trip.

Who is this guy?

Who is this guy?

I’m hoping the trip will change not only my commitment as a donor and an advocate for people in need, but also bring some perspective to my admittedly cushy life. I know I shouldn’t complain when the store is out of the exact type of milk I want; I know I shouldn’t bemoan the “heat” when my thermostat reads 82 degrees and I “have to” decide whether to turn on the air conditioning. Friends who have visited  testify that nothing puts our first-world problems into their proper place like visiting a developing area.

Another reason I consider it worthwhile to go is that the organization, India Gospel League, invites people to “come and see.” They operate on a streamlined budget, with relatively little spent on overhead, administration, staff, etc. They know the needs firsthand and what our trip costs could accomplish if spent elsewhere. Yet they invite us because:

  1. They invite sponsors to see where their money goes each month. Visiting overseas is by no means requisite to entrusting an organization with money. However, IGL’s value of eyewitness trips indicates a level of transparency.
  2. They invite sponsors to meet their sponsored children and/or villages. Neil’s trip highlight was meeting our sponsored child. I’m hoping to meet him as well, and imagine this will impart a new passion for praying for him and writing him. We’ve certainly sent him a lot more gifts and letters since Neil met him.
  3. They invite foreigners to teach the Bible, for a couple reasons:
    1. People like to hear those from other countries speak. We’re the same way, right? Maybe they achieve better conference attendance by bringing in cross-cultural speakers.
    2. As an American, I’ve had more ready access to Bible teaching than the average village woman in India. This doesn’t make me more qualified; I’ve simply been blessed with advantages like literacy, Bible classes, and other resources.
  4. They understand these trips strengthen partnership and interdependence, which is IGL’s vision for their relationship with foreign churches. They are very emphatic about outside financial support being temporary, and using funds effectively. For example, “barefoot pastors” receive outside support for two years, at which time their church takes over financial support. Programs like vocational training, elementary through post-secondary education, and micro-loans all “teach people to fish” rather than simply giving hand-outs.

There are many other things we could do with the money I’ll spend on the trip. However, it is for opportunities like these that we want to be financially flexible.

Can I really do anything useful in two weeks?

Along with my team, I’ll teach two women’s conferences of 50-100 women who pass the knowledge and convictions to the women in their villages. So while teaching a couple times through a translator seems like a pittance compared with the world’s needs, there is potential for a ripple effect. Again, I don’t feel qualified as a great speaker, but I trust that IGL understands how to leverage our efforts, and God certainly does.

We’ll also visit two house churches and do a song and dance (literally) for the children’s home at the mission base. We’ll play with kids, meet our sponsored children, tour IGL’s facilities, and interact with adults. Neil served lepers lunch while there; others prayed with cancer patients. The main reason I don’t think this trip is a scam or waste of time is that the Indian leaders have ongoing, established work there through local churches. We are just partnering by bringing our resource of Bible teaching at their request.

If you’re interested in sponsoring a child, pastor, micro-loan, or otherwise donating to India Gospel League, check out their web site to learn more. It’s a great way to inflate your usefulness instead of your lifestyle by improving someone else’s life significantly.

What do you think of short-term missions trips? Or spending on travel in general?

Everything You Ever Wanted To Know About Money

money question

In an effort to think through my philosophy and theology of money, I recently read Money, Possessions, and Eternity by Randy Alcorn. It’s about what [the author thinks] the Bible says about every possible financial topic you could imagine and then some. This book is so incredibly thorough that it should be called Everything You Ever Wanted to Know (and some things you didn’t) about Money, Possessions, and Eternity.

To save you 400 pages of reading, here’s my review. Despite being comprehensive, it’s not about a 7-step financial plan or any other specific guidelines except tithing. I should warn you, this book could really shake up your financial plans. It led to me think through our goals in a different light and makes me want to be more generous. I recommended the book to a friend and it motivated her to broach a very difficult financial topic with her family and make some major (and good) changes. This is a powerful book; handle with caution!

“Materialism is Stupid”

Critiquing our consumer culture, Alcorn keeps it real: “We must understand that materialism is not simply wrong. It is stupid” because “you’ll never see a hearse pulling a U-haul.” Jesus made the same point a little more eloquently: “What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul?” (Matthew 16:26).

The second part is probably the most unique compared to other books about money. Alcorn makes an interesting case for viewing money and possessions in light of eternity (hence the title). Basically, if you believe in the afterlife then why not invest your money in whatever you can take with you? Mainly this means helping people by caring for others’ spiritual and material needs. He also describes a pilgrim’s mentality because it navigates the “in but not of the world” balance well: “Material things are valuable to pilgrims, but only as they facilitate their mission….We must cultivate the pilgrim mentality of detachment, the traveler’s utilitarian philosophy concerning things.” If you’ve ever felt bogged down by the clutter in your home, I think you understand his meaning. Stuff can be a burden. Contentment is key.

The Hot Tithe Debate

The third section is about generosity. He calls tithing the “training wheels of giving” and makes a strong appeal for why believers should give 10% at the very minimum. I come from the rare church that doesn’t teach the tithe; he goes on at length about why you can’t write off the tithe by calling it legalistic or Old Testament. He makes some good points and, rules aside, I agree it would be good to give at least 10% of your income and that grace should lead to greater generosity than the law. But the figure is from the Old Testament; New Testament believers gave more than this in some examples but we don’t read about any requirements.

Debate aside, this book made me want to be more generous. But I have to point out that he wants it both ways when it comes to Old Testament financial advice. He preaches the tithe but dismisses the Proverbs statement about leaving your children’s children an inheritance, saying it no longer applies in part because we don’t follow all the OT laws about leaving a double portion to the firstborn male and yada yada yada.

His Take on Typical Money Topics

The final section deals with common financial topics like his thoughts on debt, saving, retiring, insuring, investing, and leaving an inheritance. See Ramsey vs. Alcorn Throw Down for a summary. About investing vs. giving he asks, “Are we truly obeying the command to love our neighbor as ourselves if we’re storing up money for potential future needs when our neighbor is laboring today under actual present needs?” This is a real tension, but he tends to overlook Bible passages about being a shrewd money manager. Plus a big advantage to pretending to be poor is that you don’t need nearly as much to retire because you maintain a low-cost lifestyle regardless of income.

Practical Take-away

He critiques financial dependence on grounds similar to ours, but he is also a pastor who loves his work and has no desire to retire early.

He’s got good stuff on choosing a lifestyle below your means, giving generously, and practical ideas for battling materialism and teaching children about handling wealth well. He suggests determining “to live on a certain amount of money each year, an amount that allows some room for discretionary or recreational spending. All income beyond that I will give to God’s kingdom purposes.” This sounds great but again, where do saving for retirement or college funds fit in? He paid off his mortgage early, has a retirement account, and helped his daughters with college costs, so he clearly doesn’t give away literally every dollar that he doesn’t spend on his immediate needs.

The Appendix “Practical guidelines to control spending” had some really good tips. My favorite was to “pray before you spend.” If you want to buy something, especially if it’s outside of your routine expenses, why not pray about it? Maybe God will answer by providing the item for free and at a lower cost from an unlikely source. Maybe He will show you that you don’t really need or want it, especially since praying will delay impulse buying. Maybe nothing will happen and you can proceed with whatever you see fit. But why not ask? This approach could get weirdly super-spiritual, but that isn’t his meaning. I’ve seen certain provisions come in just as I wanted or needed them.

Overall, I’d recommend this book to anyone who believes in heaven and wants to think more deeply about why to resist materialism, pursue financial goals, and be generous.

What do you think about giving away money? What’s the best financial book you’ve read?

Ramsey vs. Alcorn Throw Down

ramsey

Ramsey  vs.  Alcorn

Randy_Alcorn_2011

It’s about to get real.

Should I leave an inheritance or give away most of my money during my lifetime?

Should I pay off the mortgage early or invest that money in retirement accounts and college funds?

How much life insurance is enough?

How much retirement savings is enough?

How much money should I give away?

These are hot topics for those who are living below their means and have income to work with. We’re such money nerds we’ve even been known to discuss these topics during our monthly date nights. Once you get your spending under control, have a yearly budget, and have implemented some practical thrifty ideas, it’s time to start thinking about building and sharing wealth. As I mentioned in Resolve Your Reasons This Year, I recently read Money, Possessions, and Eternity by Randy Alcorn (2004) and chased it with Dave Ramsey’s latest, The Legacy Journey (2014). Both authors are Christians and wrote these books at least in part to share what they believe the Bible says about money. Their messages are strikingly similar in some areas while very different in others. Reading them back-to-back was challenging and thought-provoking, which is why I’m comparing and contrasting their views for you.

Before getting into the details, I want to fairly convey the purpose of each book. Alcorn’s book is not a how-to book. He is a full-time pastor with some thoughts on practical financial principles, but the book is mainly a treatment of the Scriptures on money-related topics. The subtitle of Ramsey’s book is “a radical view of Biblical wealth and generosity.” This is the famous financial adviser’s first book to delve into the Scripture’s teaching on money, but he only deals with a few passages he believes are often misunderstood. The main topics of his book are leaving an inheritance and giving generously. His book is A LOT shorter!

Ramsey’s book aims to counter the “toxic messages” that rich people are evil, their wealth always takes away from others’ fortune, and that they should be judged for enjoying their wealth while also giving generously. He provides practical examples of what to do with “extra income” beyond a set amount one agrees to live on. He suggests setting ratios on the overflow for giving, (taxes), investing, and “lifestyle” (= fun). Basically, his book is for people with money. Normal people who are approaching steps 6 (early mortgage pay off) and 7 (build wealth and give) will benefit from his book and it may help them make decisions about investments, budgeting extra income, giving, and leaving an inheritance.

Alcorn’s book basically assumes the reader will not become wealthy since he advocates giving away most extra income immediately, after investing something for retirement, children’s college, and leaving room for modest discretionary spending. With the exception of the tithe he avoids specific, numeric advice to leave room for personal decision-making. He says he struggles all the time with the tension of how much to save for retirement vs. how much to give away now. Clearly he prefers to err on the side of generosity. He critiques “financial independence” on some of the same grounds we do, which is why we’ve coined financial flexibility. We’re managers, not owners, of the wealth God’s given us, and we always want to depend on God financially and otherwise. And we want to use money to help others as well as meeting our needs.

Here’s the throw down of their positions on different financial topics, with my two cents, too:

Ramsey Alcorn Pretend to Be Poor
Debt No consumer debt.Get rid of student debt ASAP.

15-year mortgages recommended; pay off early after steps 1-5.

“We shouldn’t normally borrow and should always pay off debt as soon as possible”

“Not all debt is the same” e.g. mortgages can be reasonable. He paid his off early.

No consumer debt, including cars.

Get rid of student debt ASAP by living like a student.

15-year mortgage; pay off early if possible.

Insurance Get term, not whole life insurance. Most Americans are over-insured.Life insurance should meet family’s needs for a period of time but not indefinitely.

Don’t replace depending on God & Christian community with insurance.

Get term, not whole life insurance.
Investing for retirement Once consumer debt is paid and 3-6 emergency savings funded, invest 15% of income in retirement accounts. People think they need enough to live a high-expense lifestyle indefinitely to retire.

Don’t replace depending on God & Christian community with retirement account.

Tension between meeting others’ present needs and our future needs; seek the Lord.

Get your employer match.

Invest 15% after consumer debt paid & emergency fund in place.

Conflicted about investing more vs. paying off house early.

Investing makes more sense mathematically but we like the flexibility of no debt.

Giving 10% minimum.

Not over 10% until out of consumer debt.

Occasional extra giving after out of consumer debt.Set an amt to live on & set a giving ratio for “overflow.”

“Go crazy” with giving once you get to step 6 or 7 (see above).

Leave a golden goose (principle) that will continue to lay eggs.

10% minimum.

Set an amt to live on that includes some recreational/discretionary spending, and investing for retirement/college funds, and give away the rest.

Your lifetime is your opportunity to give; leaving isn’t giving; aim to leave as little as possible beyond small gift amounts.

10% or more recommended.

Live on less without being miserly.

Extra giving: prayerfully respond to needs as they arise.

Time is also an important resource; therefore, we do not plan to build wealth at the expense of spending time to help others now.

Inheritance A good man leaves an inheritance to his children’s children.

Only to be given to children who are following the Lord & agree on how to use the money for God’s kingdom.

The golden goose should be kept to lay eggs to give away.

Only leave small gift amounts.

You don’t know what your children will do with wealth; it is more likely to ruin than to help.

Don’t set up a foundation; how can you tell God the principle is untouchable?

??? Not there yet in our financial journey.

As of now we’d leave money for our children’s care since they are young.

Overall, the normal income person could come away from the books with very similar applications. Give at least 10%, and more when you can (I don’t believe there’s anything magical about 10% but it’s a decent baseline). Get out of debt and stay out. Don’t over-insure. Plan for retirement and kids’ college. The big difference is their take on investments for building wealth and giving. I can see why, as a pastor, Alcorn has a different take on these issues than Ramsey, who has advised very wealthy people. I tend to agree with Alcorn’s interpretations of challenging money’s passages, but don’t like how he explains away Ramsey’s key verse about leaving an inheritance to your children’s children. I’ll post a more in-depth review of Alcorn’s book next since he deals with a lot of interesting principles that don’t fall into these categories.

Which author do you tend to agree with more? What financial questions do you wrestle with? Have you thought about leaving an inheritance?