Tuesday, March 17, 2009

FREEDOM and Financial Peace Testamonial Part 1: The Beginning

Over the next several weeks, I will share my testamonial on how I came into debt and how I got out of debt.

Part 1: The Beginning

As with all long journey’s, it began simple enough. I was living by myself in a one bedroom apartment making about 30k a year. To date, I had no “perceived” debt. Perceived from the standpoint that while I did have a ‘normal’ car payment, I did not have a credit card. The idea of a credit card seemed bad to me, and then the envelope came, “0%.” The idea started to bubble in my brain. ‘Everyone’ said you should have a card to build credit and for an emergency. If it just stayed in my wallet, it wouldn’t do any harm.
When you account for my bills and car payment, I really didn’t have that much discretionary income, maybe 300 per month, but that seemed to get me by. At 24 years of age, you don’t really plan for a disaster, so I had no emergency fund. What I didn’t think through was the disaster compounding interest on a credit card can be. So I sent off for the credit card and was confirmed with a 5K credit limit at 0% interest for the first 12 months.
Psychologically, having access to 5k in funds when you only have $300 per month in discretionary income is dangerous. It makes you lustful for things. I was able to resist the temptation as I am a great window shopper. I like to look and daydream about having things, but getting me to buy them is like kicking a goose out of your pond in the winter. Unfortunately, if you find just the right trigger, even the goose moves out of its comfort zone.
Now let’s introduce the trigger. My wife (not the trigger) had been my girlfriend for a year at that time. We were pretty sure where our relationship was going. By the way, up to this point and the year to follow, I had no relationship with Christ. I was in the world and of it, making decisions on my own. When you are in that place, you can rationalize every decision you make. Back to the trigger. My future wife was in need of a new car, more so out of convenience than necessity. Her Cavalier wasn’t in perfect condition, but it likely would have lasted a few more years. We rationalized she needed a minivan that would be more spacious to carry ‘things’, and wouldn’t we want to take a vacation some day? Passenger wise, it was carrying my future wife and her daughter, and sometimes me. But we remembered how there was very little room in the Cavalier when we did go some place or did grocery shopping, and we recalled how frustrating and uncomfortable this was to both of us. Frustration and foolishness without Christ-centered decision-making leads to folly.
We decided that a used minivan was the solution to our problems. We started shopping around and found the perfect automobile, a 2000 ford Windstar LX. This was October of 2001, so the van was only a little over a year old. It was a nice car. We did our research and landed on a selling price of about 14k. We patted ourselves on the back for such a good purchase. While in the finance manager’s office, I came up with a brilliant idea. Since I have a credit card just collecting dust in my wallet, how about I put a $1,000 down payment on the van. After all, financing 1k at 0% interest is better than having it financed at 6%.

To add insult to injury in this bad decision-making, I told my future wife that I would make the down payment on the credit card on the stipulation that we would move in together, in sin, a concept that was still foreign to me. After all, if we could eliminate the living expenses of one of us, then we could pay the $1,000 off and make extra payments on the van, so I pushed the idea. With neither of us having any formal financial training, it was the blind leading the blind. She grudgingly agreed, and we set in motion a debt train that took us seven years to derail.
As a result of this one transaction we ended up with a 14k car loan, 1k in new credit card debt, and a choice to live in a way that would bring us no blessings. All of these factors have caused unbelievable hardships in both our lives and finances. My future wife came to her senses later and decided that we would not be moving in together, just a week before my lease expired. This in turn made me furious. I didn’t understand her reasons at the time and we broke up, albeit for a month. Later, I learned greatly to respect the hard line she took. As I became a Christian, I was thankful that we never moved in together. Regardless, we still had the debt.


Kansas Bob said...

I am loving this Scott! Looking forward to the rest of the story!

Anonymous said...

Though I enjoy your posts and consider them very insightful in a spiritual and "financial" way.. I must say that "money" is the Devil. I can't imagine Jesus giving a parable explaining the just cause to enslave oneself to a piece of paper, unless that cause was to show others how to become free. That paper (dollar) is a contract that you were born into. You are in debt as an American. You know this. It is unconstitutional and inhumane. It is BS.

Money is debt owed to a person, these days. It says so on our dollars. Dollars that have no value beyond the fact that we all agree we OWE a faceless person a debt, and we may as well make a fire with those bills for warmth.

A dollar has no spiritual value. It is a worthless material object. Materialistic gains in Heaven placing one over another is worthless as well. An expression of this is "My heavenly palace is bigger than yours!" or "I have more riches in heaven than you!" This trend begets Greed and Vanity. Hardly worthy of Heaven? Why do you worship your God? I am not saying you are wrong, as a Christian, but I wonder if you actually understood Jesus as a philosopher.

jrchaard said...

J-man, Money does lack spiritual value, it is how you use or borrow it that has the spiritual value, and that is what I am getting to. Let's remember that when Christ came, he came to capture hearts and step away from law and procedure. And to understand my point, you must also realize that Christ is not a respected philosopher to me. He is my Redeemer, My Lord and Savior. So you cannot divorce the heart aspect of money, which is what you are attempting to do, but the bible is clear cannot be done. "Where your treasure is, there your heart is also". God knows that you are in the world. Where you choose to put your money is a reflection of where your heart is. If I choose to take on debt, I have chosen to take on another master. You cannot server two masters, you either love the one or hate the other. God is clear in that He should have supremacy in our lives.

Kansas Bob said...

I think that how we use money is one of the most spiritual things we do.. we can either become it's slave or we can exercise mastery over it. I wrote more about this here if anyone is interested.

jrchaard said...

It is a very good post bob. I do love the Father and out of love for the father, I should not take on debt. Maybe I felt the spiritual oppression so much that i don't understand why others feel differently. It was a giant weight that once removed, brought me freedom - from that debt, allowing me to focus on more uplifting things.