Finances
I get questions about personal finance quite a bit since most people know that I used to be an accountant. (Apparently many people think that a masters degree in accounting makes people immune to poor financial decisions…how I wish they were right.) The truth is that when you go through accounting programs they teach you how to account for the money that has already been spent, earned, saved, or destroyed. They don’t really teach you very much about how to handle someone’s personal finances.
So, over the next couple of days we will explore how you can dig your family out of a financial hole or, for those not in a hole, how to avoid getting yourself into a hole.
Most Important Personal Financial Agreement EVER!
I will lose a good number of you right here…so I am not saving the most radical stuff for later…I am giving it to you up front. Before you can truly get a grasp on your family’s personal financial situation you must agree to believe this for the rest of your life: DEBT IS NOT A TOOL YOU CAN USE TO BUILD WEALTH. Let me repeat that: DEBT IS NOT A TOOL YOU CAN USE TO BUILD WEALTH.
If you have agreed with that statement, then you can continue reading…if not then feel free to debate me. I have never in my life heard someone say, “Austin, the best thing that happened to my family’s finances was maxing out all of our credit cards,” or “We were heading in the wrong direction financially, but as soon as we decided to get a payday loan everything was all better.”
The truth is that some people take on large amounts of personal debt and end up making a killing, but I would argue that those people are more lucky than smart. The vast majority of us would not be so lucky.
I already have debt, what do I do?
Tomorrow we will take a look at how to go about digging out. We will look at some Bible verses that speak directly to personal finance and accountability as well as talk about how you can start down the road to financial stability and freedom.
I don’t have any debt…is this for me?
Yes! We are going to talk about some traps that are pretty easy to fall into even if you don’t have any debt and how to order your debt-free life to maximize your giving, saving, and living.
No debate here. Great start and I look forward to the series. I don;t think this can be discussed too much.
KO
Thanks! Glad you are tuned in!
I like discussions on debt since it is such a tough subject. Overall, I feel debt is not wise for almost all people, but situations to consider are buying a home (since the debt is really equity if the home value doesn’t plummet) and investing. Almost all companies use debt because they can get a better return on the money than the interest they pay. I don’t think this applies to people as well since our goal isn’t to create profit like a company. A gray area though is with churches. I know of a lot of churches who use debt to provide better environments than they could without the debt. I don’t particularly agree with the strategy, but I don’t think it’s completely wrong. Let me know your thoughts.
I am not a fan of a bunch of Church debt, however, churches are like businesses in that they have a much easier time handling debt. (Maybe its because the debt is plain to see by everyone.)
So, in some instances I think church debt is okay. I know the church I attend is taking out a large loan for a new building project, but as in times past they will do a large campaign and pay the building off many years sooner than the note requires.
I will be talking specifically about individual home debt later this week…stay tuned.