Financial Peace University

Money. Few of us know how to handle it well, none of us use it perfectly. That's where Dave Ramsey comes in. Simple, to the point, basic. His course, Financial peace University teaches people "how to live like no one else so they can live like no one else." This class will help you get out of debt, save money and get on the road to financial peace.

FPU begins this next Monday, January 12th. We'll meet at the Greater Lawrence Technical School at 7PM in their café (park out front and come through the front doors). Contact me (Ryan Phelps) if you want more info (978-681-6483). Go to FPU's website if you'd like to learn about the class itself.

Consumerism: It's Ok

"We are a nation of consumers, and there is nothing wrong with that."

-From a Discover Card commercial

Drive Free, Retire Rich

Dave Ramsey awesomeness.

Frugality Lost

David Brooks wrote a brutal op-ed on our debt culture yesterday. It's really quite sad and deeply disheartening. But is it all that shocking that we Americans today are concerned more with getting stuff than staying out of debt? I would love to think that a shifting economy would change hearts and minds. But my guess is that it will only push us all deeper into financial crisis. Anyway, David writes:

"Over the past 30 years, much of [America's frugality] has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money."

Reporting on a new study called "For a New Thrift: Confronting the Debt Culture," David continues:

"The deterioration of financial mores has meant two things. First, it’s meant an explosion of debt that inhibits social mobility and ruins lives. Between 1989 and 2001, credit-card debt nearly tripled, soaring from $238 billion to $692 billion. By last year, it was up to $937 billion, the report said.

"Second, the transformation has led to a stark financial polarization. On the one hand, there is what the report calls the investor class. It has tax-deferred savings plans, as well as an army of financial advisers. On the other hand, there is the lottery class, people with little access to 401(k)’s or financial planning but plenty of access to payday lenders, credit cards and lottery agents.

"The loosening of financial inhibition has meant more options for the well-educated but more temptation and chaos for the most vulnerable. Social norms, the invisible threads that guide behavior, have deteriorated. Over the past years, Americans have been more socially conscious about protecting the environment and inhaling tobacco. They have become less socially conscious about money and debt."

Totally. And that's not to say I haven't contributed to this. I have. Spending is now a deeply ingrained value in so many of us. I do not have the same sense of urgency my grandfather did to scrimp and save. Yes, he did so because he had to. The only money he had access too was the money he made. Though some credit was available to him, getting a Target credit card was unheard of. But beyond that, frugality was something he believed in deeply and practiced earnestly (he still does, despite huge financial success). Brooks concludes, commenting on the need for a shift in mentality:

"There are dozens of things that could be done. But the most important is to shift values. Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future."

Ultimately, we've got to understand that frugality is not a means to an end. Yes, you will be more financially secure if you spend less and save more. But frugality is virtuous because it is biblical. Did you know that Jesus talked about money more than anything else in the Gospels? Jesus knew that money, if left unchecked, would master you (Mat. 6:24). Be mastered not by that shiny plasma TV but by God.

Check out Dave Ramsey for excellent help in this area. I hope to hold his Financial Peace University course in January 2009. Stay posted.

"How Selfish is This Guy?"

Like I said, I have been digging 60 Minutes as of late. Part of the past Sunday broadcast was a piece on Tom Perkins, the highly successful, wildly wealthy venture capitalist who, among other things, likes to spend money. Leslie Stahl interviews him on his ship, the Maltese Falcon, the biggest sailing vessel in the world. You can watch the whole video below, but here is a transcript of the most interesting (to me) section (starting at about 4:30):

Lesley Stahl: "Why won't you tell us [how much the ship cost]? You've told us everything else. You don't seem to be embarrassed by everything else."
Tom Perkins: (laughing) "I'm embarrassed about that."
Stahl: "About how much it cost?"
Perkins: "Yeah."
Stahl: "Because..."
Perkins: "There's the homeless and charity, and there's lots of things you could do with the money that would improve the world."
Stahl: "Oh, good point, that you bring up yourself! Wow."
Perkins: "So, how selfish is this guy? I guess is the criticism. So the answer is pretty selfish, but I'm just not gonna put a number on it."

Amazing.

Teach Your Child to be...a Millionaire?

I read so much Christian/biblical stuff online that I didn't realize at first that an article I clicked on was not from a Christian site, but one posted at MSN.com. It is entitled "What God says about your money." Written by Abby Ellin, she answers this question (as best she can) for each of the mainline faiths (Christianity, Judaism and Islam). Her overall hope in the series is to discover what to teach your kids about money. She writes:

"Happily, the consensus among most religious leaders seems to be that the Almighty does not want you to live off food stamps and is quite happy for you to drive a Porsche."

Hmm. That's a pretty generalized statement. Is that what the Bible teaches? Does the article come across as God-centered? What will you teach your kids about money?

How to Spend Your Economic Stimulus Payment

As I'm sure you've heard, the government is giving us some money back. In the next few months a bunch of Americans will be getting an "economic stimulus payment." The hope is that by moving a large chunk of money into the markets, the economy will turn around (at least a little). Obviously, as Christians, we must spend every cent we make wisely (we are God's money managers, as Randy Alcorn has said).

Read these pieces on the topic:

• Tim Challies interviewing David Kotter: Thinking Christianly About Economic Stimulus Payments.
• David Swanson: Money from Heaven.
• John Piper: Economic Stimulus Payment and Christ.
  

Should I Save for Retirement?

That question might be a no-brainer for you. Listen to John Piper talk about how to reconcile passages like Matthew 6:19-20 ("Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal") with how we save for the future. His answer might surprise you.



What did he say that you had not heard before? Where is he correct? Where is he misguided? Piper is, to some, extreme on this issue, and I don't post him here because I agree with everything he says. However, I do think he helps us turn our eyes away from the world a bit and back to God. How that helps you decide how much to contribute to your 401k (or just plain deal with money, for that matter) is for you to decide.

To read the transcript, go here.