Breaking out of Plastic Prison
Hope for the Financially Challenged - Part 2
I want you to fill in the blank for me: There are some things money can’t buy, for everything else there’s MasterCard. The ads have worked well on you, haven’t they?
MasterCard’s so called ‘priceless’ ads have been some of the most successful ads in advertising history. The format is very simple—there are various things listed with their monetary cost, but the last is something so intangible that you can never put a price tag on it. The value of this item is summarized in this word—priceless.
It’s a pretty slick campaign, and it has made millions for the advertising company that came up with it, and even more for the credit card company. One of the ad executives that is in charge of the ‘Priceless’ campaign had this to say:
What really hit a home run with consumers is that a company that is fundamentally all about money and paying for things would actually declare that there are things that really count that can’t be bought with
money.
There is a kind of reverse-deception going on in the priceless campaign. And the ad people are so certain that the deception works that they don’t even have to be subtle about it.
Jim Ferrell is a syndicated columnists and a professor at St. Olaf College in Minnesota. He wrote this:
The priceless ads are obviously designed to respond to the American public’s worry that everything is being commoditized and that we’re becoming too materialistic. So the ads emphasize things money can’t buy—the intangibles that make the good life really good. Now advertisers have done this for years. They take our most precious and dearly held values and sell them back to us. They show us by association that their products value these things that we value. In most of these ads, the ‘priceless moment’ is a direct result of a series of spending decisions. For example, you can’t experience the priceless value of your first dog without buying it first. You can’t show your daughter the joys of Disney World without buying the air fare, hotel, and park tickets. Often, it seems the priceless moment has a considerable price.
The real message of these ads, despite what the word says, is that “There are some things money can’t buy, but it sure takes you money to get there.” Now, do you think that you’re too smart to buy into that? Think you are too financially astute? Think that you’re too educated to go for those kind of things?
I came across this past week a study out of Harvard University. Harvard’s School of Economics noted that education has an inverse affect on shopping savvy. What they were saying was that “the higher your education, the less caution you will exercise in regards to discretionary income.” In other words, if you tend to be an intelligent person, you are more susceptible to buying things with status symbols attached to them, or brand names that you will pay more money for, or things that you think will enhance your prestige. This is what Harvard has found.
This is why today that there are many people making 6 figure incomes who are deeply, totally, in over their heads in debt. It is happening all around the country.
I want you to know—the things we are talking about today are not a referendum on how smart you are, or how educated you are, or how discerning you are about seeing through these things. Many of the things that drive our financial behavior have nothing to do with how smart we are. Really it is about other things. When you look at financial problems, just from the perspective of dollars and cents, of budgeting and accounting, then many people will go un-helped because these issues go far beyond how much you make.
Our financial behavior is really a symptom of other issues.
1. Not Just A Financial Problem
• It may be an esteem problem
Sometimes our debt issues and our financial problems come from esteem problem. Professor Tihira K. Hira at Iowa State University argued that the traditional ways of helping people with spiraling debt (like negotiating with creditors, working on debt repayment schedule) often do not help many people with real debt problems.
Hira said this:
We need to sit down and understand why these people have consistent financial problems. If we focus
exclusively on the financial end of it, the same person will be in trouble in 5-6 years.
Hira’s job is to train financial planners. She said for years she worked on the traditional method of teaching people to budget and to deal with debt in a timely fashion. But she has changed her approach after spending years of studying the personal lives of people in financial crisis. What she has discovered is that clearly 25% of the people who are serious financial debt also have serious self-esteem issues. One in four people who have debt issues have something else contributing to those issues—the way they feel about themselves.
It is like we talked about last week—remember Henri Nouwen? Nouwen said…
Consumeristic economies stay afloat my manipulating the low self esteem of the masses.
That’s how advertising works—it plays off of your sense of not feeling good about yourself, and offering you a way of feeling better about yourself. So we have to ask—“What drives our financial behavior?”
In Particular, What does your spending choices say about you and how you feel about yourself? Do you tend to go shopping when you’re feeling down and depressed? Does buying something new tend to give you a momentary lift? Is this the way you deal with negative feelings? Have you ever gone and done something
impulsive?
• It may be an addiction problem
John Commuta with Financial Independent Networks says this…
We’re a nation of credit-holics. We are seduced into using credit by the illusion of prosperity and short-
term pleasure. We don’t think about the long-term pain.
I want to offer an analogy. Credit cards are like drugs; because they offer short-term pleasure and long-term pain just like drugs do. They give the illusion of having more money than what you have. They let you then live on less, because each month a portion of your income is siphoned off to pay for past spending habits.
Now think about this--Creditors don’t make any money on you until you go into debt. So don’t kid yourself that Visa, MasterCard, or Discover that raises your credit limit is a friend to you. Or that they are trying to pay you a wonderful compliment. They want you to be horribly irresponsible, and charge yourself in over your head. The deeper in debt, the better. And every day , banks are thinking of ways to get more of your money and get you more comfortable with debt.
One chief executive of a bank said this: “We will break down the barriers of debt.”
Back in the 1930’s there was a real banking scandal across America. Time coined a term for bank executives—they called them “Banksters”. Maybe we need to resurrect that term, because that is exactly what’s happening with these credit card companies today.
Do you know what kind of spender you are?
? Cautious spenders
Hopefully many of you in here are this type. You carefully think through the things you are going to buy, you don’t buy on impulse, you buy those things that are really a good value only when you have the resources to do it.
? Impulsive spender
A person who cannot resist the call of the mall. Or the call to Best Buy. Things you have seen on an infomercial and can’t believe you have lived this long without it. You whip out your card and you buy it on the spot.
You walk through a shop and you see a deal—you see a $60 dress and it is on sale for $30—it’s half off—“What a deal, I am saving 30 bucks!” Did you really save $30? Or did you spend $30? If you want to save $30, don’t buy the dress. Now, I know I have gone from preaching into meddling, and nobody likes that, so I will lay off those kind of illustrations.
There are some people who have an incredible urge and cannot resist a sale.
? Niche spenders
A niche spender is a person who maybe could walk through the average mall and resist all the sales, but don’t put them in a tool department, or don’t put them in a shoe department, because in those areas they are particularly vulnerable.
The spenders I am most concerned about is the…
? Compulsive Spenders
An impulsive spender is tempted by the things that surround them; A Compulsive spender is driven by a need inside them.
Here is the thing I want to ask you… “Do you find yourself not able to stop buying to continue your spending habit, even when you know it is hurting you, and it is hurting people you care about?” That is a sure indicator of an compulsive spender. Somebody who cannot stop. Find out what is the root cause of that spending addiction. There is a great program out there and it is absolutely free, it is called Debtors anonymous. It is for people who want to walk through healing through the 12-step process. This can help you get to the root issues of compulsive spending.
It may not be a financial problem, but it may be a…
• It may be a spiritual problem
What is the first commandment and the last commandment in the 10 commandments? The first commandment is “You shall have no other gods before Me.” The last commandment is “You shall not covet.” These are the flip sides of the same coin—it is the same commandment, because both commandments are concerned about finding replacements for God. That’s what they are about.
Have you ever wondered what it would be like if you were God? How would you feel if you were God? You would probably feel powerful. I would imaging you would feel secure. All of us would probably feel independent, influential, and in control. And who wouldn’t like to feel that way?
If you were the winner last night of the lottery—did anyone win?—no one in this room, right?—If you won, how would you feel? Do you think you would feel more independent? Influential? In control? Would it free you up from the ability to rely on other people? Would you feel more secure about your future—less prone to worry? Of course we would—at least for a while we would.
Part of the crazy allure of money is that it promises it will do something for us if we could only get more of it. It promises to take away a chronic feeling of sadness and vulnerability that we have as we depend on other people. It promises us that we will be I control. It says, “We won’t need anything; we won’t need anybody, and we will never have to worry about the future ever again.” And if we’re honest, those desires reside in all of our hearts. If you we’re to admit that this longing for freedom and power and control and security is really one of the deadliest diseases known to man. It is a thinly veiled disguise for us to “Be our own god.” We want to be God rather than humbly submit to God. We want the power, security, the independence and control that He has,
but we want to wield that power ourselves. It may be a spiritual problem, which lead us to the prison of debt.
2. The Prison of Debt
Many of us are in a prison of our own making, and that prison is made of plastic. The use and abuse of Visa, MasterCard, Discover, and Amex.
Susie Ormond who wrote the phenomenally selling book 9 Steps of Financial Freedom talks about debt.
Debt feels like the heaviest burden of life. It weighs down you spirit; it keeps you occupied. It makes
you feel bound, because you are bound.
Today, our motto is…
• “If the shoe fits, charge it.” This is the way we live.
Let me give you the current statistics of credit card usage in America. USA Today reported recently that credit card debt is up 160% from what it was ten years ago. The average US home today owes $8,300 on 14 credit cards.
Many people in America fall prey to the Minimum payment syndrome.
In other words, when we look at what we owe, we don’t look at the total of what we owe, we look at the minimum monthly payment and say, “I can afford $20 more a month in my budget.” As a result, what ends up happening is that we keep charging. And eventually we get stuck on the paycheck to paycheck treadmill—always paying, but never getting out from under your debt.
When you reach that point, you are no longer in charge of your finances, your finances are in charge of you. Even if you avoid late fees, if you have what the average American consumer has on their credit card--$8,300 on their credit card—and you make the minimum monthly payment—which on the average credit card is 2% of the total balance—Do you know how long it will take you to pay off that debt? 25 years and 7 months. In that time, you will have paid $15,000 in interest alone on that debt. To bring the total on your $8,300 balance to $23,000. This is really the Buy now, pay forever plan.
If you have credit cards, and even if you stop charging on them, if you’re only making the minimum monthly payment, then you will be in debt for the next quarter of a century.
According to Cardweb.com, which tracks the leading lending industries in America,
• 20% of our credit cards are maxed out right now
• Only 40% of Americans pay off their debt
• The majority of us (6 out of 10) are carrying a balance on their credit card.
A long time in our country, you would call us Cash rich, house poor. This was our parents generation and those before them. In our generation, we have moved from being, House rich to Cash poor. But today, the best way to describe us and how we’re living is Credit dependent, and cash broke.
We are broke. Literally, broke. Because something happened for the first time last year, that’s never happened in the history of our country. You know what it is? For the first time in our country, according to Business week Magazine, the total household debt that we hold (car loans, mortgage, and student loans) topped 100% of our disposable income for the first time ever. Consider America 20 years ago that our debt stood at 2/3rd’s of their disposable income.
Today, we are paying $1 our of every $3 for consumer credit. 40% of Americans admit that they’re in over their heads because of how they misunderstand and misuse credit.
I know that I threw a lot of statistics at you all at one time, but if I were to summarize it, it would be this: Consumer debt consumes. It consumes you’re income, It consumes you’re cash flow, It consumes you’re flexibility, and It consumes you’re future.
And that lead’s to…
• Debtor’s Prison - Coming full circle
Does history repeat itself? You bet! Do you know why? Because we fail to learn from history.
Credit began about 3,000 years ago back in Assyria, Babylon, Athens, and Egypt. In these ancient cultures, they had very high interest rates, but they also had very harsh penalties for people that wouldn’t pay their debt.
For example, in Athens, they began to imprison people who wouldn’t make their debt payments in a timely fashion. They were thrown in jail. But they imprisoned so many people, that they ended up imprisoning a whole class of people—the farmers. Do you know what happened? The markets where you got your food dried up. People began to starve. They took the laborers—the average Joe—and they put them all in prison. There was no one to work the fields, to plow, to harvest, and to bring the crops to market. People began to starve.
We don’t have things like debtors prison today. But what the Bible says is still true:
“The poor are always ruled over by the rich, so don’t borrow and put yourself under their power.”
Proverbs 22.7 (The Message)
When you owe money, the lender calls the shots. They tell you when the payments are due, they tell you what the interest rate will be, and they tell you what minimum payment you are required to make. They make the profit, you take the loss.
The harsh truth is this—consumer debt does not get you ahead; it holds you back.
What drives our American economy? It is credit. That’s what drives our economy. And what problem is rising in epidemic proportions as a result of credit? Bankruptcy. Do you realize that last year, 8x’s as many Americans filed for bankruptcy as did during the height of the Great Depression. 1.3 million families last year had to declare bankruptcy.
Here’s my question: Is there evidence that your debt, or your spending habits, have become an issue? I have a test, a series of questions I want to read through. Answer them honestly and silently to yourselves. If only one or two of these things are true, then you might be concerned; talk it over with your spouse. If three to five of these things are true about your life, then it should move from the backburner of your life to the front burner—it is serious enough that you need to pay attention. If more than five of these things are true about your
life, then this is a serious problem and it has to be fixed.
1. You find yourself paying on high interest credit cards and never getting ahead.
2. You have creditors calling or writing about past due bills.
3. You’re only able to make the minimum payments.
4. You borrow from one credit card to make a payment on another.
5. You are 30 days or more behind on your payments
6. You put off paying a bill until next month.
7. You are unaware of how much money you actually owe.
8. You draw from savings to pay a current bill.
9. You find yourself constantly being charged late fees and fees for returned checks.
10. You charge daily expenditures because of a lack of funds, like groceries and gas.
11. An emergency bill, like a car repair bill, could put
you under. 12. You find yourself worrying a lot about money.
13. To pay bills, you shuffle money around that was originally meant for investing or giving.
14. You rely on extra work to pay your regular bills.
15. You cannot seem to grow your savings account.
16. You and your spouse argue over finances.
17. You have a burning desire to accumulate more money just for the sake of accumulating more money.
18. You purchase items on impulse, not because of planning.
19. You often buy things to make you feel better.
20. You think about or begin being dishonest about money.
21. You find yourself attracted to “Get rich quick” schemes.
You find it difficult to give to God or even consider it.
Friends, those are danger signals. Something is amiss in this area. If that is the case, let me give you 5 steps to
breaking chains and breaking free.
3. Breaking Chains and Breaking Free
• Stop the bleeding.
When I was in Boy Scouts growing up in Tennessee, one of the things I learned working for my First Aid Merit badge was this: “If you came upon a person involved in the scene of an accident, and they are bleeding profusely, and they are not breathing, which need to you tend to first?” You stop the bleeding. If someone is bleeding profusely, you stop the bleeding first, because the person can bleed to death in a minute, but they can live without oxygen for 4 minutes.
If you are bleeding financially, the first priority is you have to stop the bleeding first. All new indebtedness has to end. If it means getting out the scissors and cutting up your cards, you do it. Yes, I am talking Visa-ectomy.
Freeze your cards in a block of ice and keep it in the freezer. That way, if you want to use them, you have to let them set out and melt (and by that time, you will usually change your mind about using them).
Will Rogers was known for his nuggets of truth. He said this: “If you find yourself in a hole, the first thing you have to do is stop digging.”
If you are in a financial hole, stop digging. Stop any new charges. Make a decision to be done with debt. You declare war on credit. Decide to stop robbing from your future to pay for your past. From now on, you operate on a “Pay as you go” basis. If you don’t have the cash in your pocket or the cash in your checking account, you go without. You say to yourself, “If I can’t afford to pay cash today, then I can’t afford to pay
compound interest tomorrow.”
• Allow God to change your heart.
Dallas Willard, the author of Spiritual Disciplines, defines spiritual disciplines in this way:
A discipline is any activity which in our power, something we can do, in which we engage in order to do
what we cannot now do by direct effort.
Something I can do now, so I do that so later I can do something I can’t do now. For example, I can’t run a marathon at the present time, even if someone was chasing me from a knife. But it is possible though, by practicing certain disciplines over a period of time (given 10-20 years), I could possibly run a marathon, however unlikely that may be.
Discipline often looks like practice. If you want to get better in your golf game, you go out to the golf range and hit a lot of balls. If you want to get better at playing the piano, you practice.
Stewardship is about learning to manage the 100% of what God has given us in a manner that pleases
Him. The reason we engage in stewardship is so that God can change your heart. That’s why Jesus says
For your heart will always be where your riches are.
Matthew 6:21
Jesus knows that there is a direct correlation to your money and stuff and your heart. If you are white-knuckling your finances, then your heart is hardened towards God. Your hearts are full of greed, self-centeredness, and sin.
Let God change your heart. You are powerless to change it on your own.
• Practice openness and accountability.
This is the one thing we desperately need the most, and the one thing we most resist. We need support. Some things in life are just too hard to do on your own. We need people to come along side of us and encourage us. Whether you are dieting, or exercising, or trying to change a bad habit in your life—we all need people in our lives to support us, encourage us, and to ask us some hard questions about whether we are really following
through on our commitment to change. This is going to be hard when it comes to our finances.
• 82% of us have never discussed our income with another soul.
• 89% of us have never discussed our family budget with another person.
• 92% have never discussed what we have given to the church.
Get this: The people who are least likely in this country to talk about their personal financial matters are Christians.
People who rarely go to church—1 out of 4 of them admit that they have talked to their friends about how much money they make. Do you know how many Christians have done that? 1 out of every 8.
Christians don’t talk about this. In fact, we don’t talk about a lot of stuff that really matters in our day to day lives: Sex, money, parenting, jobs. Let’s pop the top off our dirty little secrets and start holding each other accountable. Let’s start encouraging and edifying one another; life and money troubles are just to hard to go at it
alone.
• Break the debt cycle.
One of our biggest sins in this area is presumption. Presuming that the future will remain constant: we will always have our health, we will always have our job, and that we will always make the money we’re making or even more.
What would happen if you lost your job? How would you pay your debts. What if you were forced to take a cut in pay like many people have. When faced with the option of taking a cut in pay or getting laid off, you take a cut in pay. I had to do that at my last church. What do you do?
Let me make a distinction between secured debt and consumer debt. Secured debt in a house payment. It is debt that is held against a real asset that could be sold and completely satisfy the debt.
A car, if you buy wisely, like not going out and buying something new and it depreciates immediately when you drive it off, a car can be a secured debt.
Most of us don’t have issues with those kind of debts as we do with consumer debt. Because it doesn’t matter what you put on that card—you won’t get your money back because the depreciation is so rapid.
I have to tell you, 5 years ago when we were living in Dallas, I developed some unhealthy spending habits. There were tons of stuff to blow money on, and I did it—on books and music. When Kim and I fought, which happened at regular intervals, it was always about finances. I had to learn what was the reason I was spending money. I had to learn my spending habits. I must tell you, if Kim and I fight anymore, it’s almost NEVER about money—God has changed my heart and my pocketbook. If He can change me, He can change you.
“The wise man saves for the future, but the foolish man spends whatever he gets.”
Proverbs 21.20 (Living Bible)
This verse says that we need to anticipate hard times, we never know what the future holds. Many of us that have gotten ourselves into trouble have made presumptions about the future, and it has backfired on us.
The final thing I would like to tell you is to…
• Keep at it.
You have to keep on taking one step at a time. Don’t get in a hurry. Don’t try to fix it all at once. You didn’t get into debt overnight, and you’re not going to get out of debt overnight. The temptation to fix something in a hurry is what causes us to dig our hole deeper. Because then we try foolish things with our money that backfire and only cost us more.
To deal with debt, you have to work hard, keep a steady income, and you make progress a little at a
time. The Bible tells us how to be rich. It says…
“He who gathers money little by little makes it grow,”
Proverbs 13:11
Getting out of debt is not easy. It is one of the hardest decisions that you will ever make. But the Bible says,
“Don’t give up.”
“Let us not get tired of doing what is right, for after a while we will reap a harvest of blessing if we don’t
give up.”
Galatians 6:9
Ron Blue, the Christian financial writer says,
Getting into debt is as easy as getting down an ice-covered mountain. Getting out of debt is as hard as
climbing that ice-covered mountain.
Another Christian writer writes
Getting into debt is like riding a bicycle downhill: it is exhilarating at first. Life in the charge lane is a lot
of fun. But you always have to go back home uphill.
You have to make some tough choices and stick to it. You may have to make some decision about the way you
live. You can be free. I want you to be free.
“...no discipline is pleasant at the time, but painful; later, however, it produces a harvest of righteousness and peace for those who were trained by it.”
Hebrews 12:2
Know this—God is on your side. You are always more valuable than what you own or what you owe. God treasures you—you are that important to Him.
Also, know this—that before any one of us can come and know God, we all have a debt problem that is bigger than the worst financial foul-up you can ever make; it is called a sin debt. It is the result of having lived our lives our own way. Doing things without God, doing things that please us; sinning—falling short.
That sin debt was so great, that the only way out of it is to come before God and to declare your moral bankruptcy. To ask Him to do in you that which you cannot do in yourself.
God knew that we were spiritually in debt—way beyond our ability to pay. The good news of the Gospel is that He sent His Son Jesus Christ to pay the penalty, free and clear, so that all you have to do is to ask Him to put that on your account, and He will do it.
He would love to set you free. The biggest burden that any one of us carry in life—to know that our sins are forgiven, to know that our past is erased, and to know that our future is secure.
