Wednesday, March 26, 2008

An Economy Built on Sand

I have always been fond of Jesus' story of the wise and foolish builders. Perhaps you remember it. A foolish man built his house on a foundation of sand. The wise one built his house on a foundation of rock. When the storms came, the house built on sand collapsed while the house built on rock stood firm.

The story was about building our lives on solid spiritual foundations, but it is also a fair analogy to use about economies as well.

The American economy, at least for the last 30 or 40 years has been built on debt. By extension, so have the economies of most households. It's borrow, borrow, borrow. Think about it, our credit reports are among our most valuable assets. We are often even offered or denied jobs based on our credit scores. How mixed up is that?

Currently, our economy is in a pickle. Mortgage and credit card delinquencies are at all time highs. So what does the government do? They pass out a little cash so we will spend more, and they lower interest rates so we can borrow more. That is twisted.

The result of all the interest rate cuts is to lower the price of the dollar(which can't take being lowered much more), thus raising the price of oil and other commodities, fueling inflation. That results in families having to pay more for gasoline, groceries and such, leaving them unable to pay their mortgages. Pretty soon, even things like groceries are going on the credit cards and before you know it, you have a genuine crisis on your hands. Now multiply that by millions.

We don't need to borrow more. We need to borrow less. You can't borrow your way out of debt any more than you can dig your way out of a hole.

Imagine another scenario. What would happen if we all started spending less than we earn. What if we stopped using credit cards? What would your life be like if you had no car payments and no credit card payments? What would you have then? Money! That's what. Now, carry it another step. What if you used some of that extra money to pay down your mortgage and pay it off early. What would happen then? You could become wealthy very quickly.

Look at another scenario. If you had no debt, would it worry you if gas went up in price? Not as much. You'd hate those low low interest rates, too, because your money grows faster with higher interest rates.

If Americans would commit to becoming debt free, the future would be so bright we'd have to fear going blind. We would have money to spend, to save and to give away. Charities would be better supported. Churches would be more adequately funded. We'd have more relaxing vacations. In short, we would flourish.

I'm determined to make it happen in my life. I want to spread the word. I'm still trying to start the new revolution.

Wednesday, March 19, 2008

When it Rains.........

Several times recently, I've discussed the importance of an emergency fund. Today, we learned it's importance in a very big way.

Our mailbox contained a disturbing notice today from the IRS. According to the letter, our 2006 tax return had a serious error in it. Simply put, a calculation carried over incorrectly and gave us a wrong total. We now owe Uncle Sam a considerable sum of money.

We're not happy about it. I grabbed the return and went over it with a fine tooth come, convinced the IRS was wrong. Unfortunately they are correct.

Because we have an emergency fund, we will be able to write the check. We won't be happy about it, but we can do it.

It will take a while to replenish the fund, but so be it.

Monday, March 10, 2008

It's So Sad

It seems like every day I'm reading a new article about mortgage crises and other credit issues. America really does appear to be at a crossroads. And it breaks my heart. No one starts out with plans to create a debt burden. It creeps up on us, and often by the time we realize what we've done, the monster is out of control. I have genuine sympathy for the millions who are feeling the pressure right now. It's so sad.

But how do we get the word out? Brittan and I are still trying to figure out how to market our message. Oh, there are others like Dave Ramsey who are doing a great job. Other great proclaimers are the likes of Crown Ministries, Mary Hunt, Ron Blue. But B and I feel compelled to share our story and assist others in becoming and living debt free. Please pray that God opens doors for us.

We get plenty of hits on the website. We get emails almost every day from men and women who need and want help. I believe the revolution is coming.