Wednesday, March 19, 2008

Recession ponderings #2-- getting our finances in order

I suppose I should have written the most obvious fact in Recession ponderings #1 but I'll send out this little reminder now... GOD IS IN CONTROL! As we are being reminded this weekend, Jesus not only died as the Lamb but He rose from the grave and is coming back as the Lion of Judah! Even the Presbyterians will shout about that (hehehe, having been one myself).

What we obtain by being careful about taking on debt or spending too much is less suffering as we go through a financial trial. How many times when we had no money at all I wished we hadn't kept going out to eat, buying things we didn't absolutely need right then, etc. As I stated before, we just didn't think things would get that bad.

At the same time my friends, if you are in a bad situation... it is not the unforgiveable sin and you can ask for God's direction. He cares about everything in your life... including the balance of your bank account.

If you need assistance now, there are places like Consumer Credit Counseling which will work with your creditors. They are especially good for families with credit card debt as they can often negotiate a lower interest rate (sometimes freezing your account and not letting interest grow anymore). At least that is what happened with us during one of our "years with no income".

A national ministry is well known for good advice. It is Crown Financial Ministries (formerly Larry Burkett's ministry before he passed away). If you click on their name, it will take you to their website. They offer numerous articles that are free as well as financial helps which are available for reasonable prices.

Another thing my husband did which helped us was to call creditors and keep them up to date on his job searches, etc. He wrote a letter to the places where banks check credit ratings, describing our situation. They all knew we were not making full payments because he was either on unemployment or we had no income at all. That worked to our benefit when we purchased the home we live in now. He did always try to pay something each month, even if it was only $10.00.

The best thing you can do right now is take an honest look at your finances. Unless you are single, it will be a good idea to get other people involved (especially your mate and children if they are old enough). If you do this before there is a real problem, it is much less painful. If you are single, I'd suggest a great (and honest) friend.

Here is a very simple way to take your financial picture. Take out a piece of paper and write down all your assets. On another paper, write monthly bills from rent/mortgage down to the smallest debt you may think unimportant (like the $10.00 a year we spend to stay a part of the Friends of the Library). Then... take a deep breath... add up your total assets and total debt. After you pick yourself up off of the floor, find a way to celebrate because most people never take the time to do this. :)

I'm not a financial counselor so I suggest if you are deeply in debt, seeking expert advice. However, if it isn't all that bad then it is rather simple. This is what we were told. Pay off the smallest debts first and try your darndest not to go into debt any further until it is all paid off (realizing most people hold a mortgage or have to pay rent and some people have car payments).

For Christian families, this is an exceptional way to involve kids in trusting God for all things. Even now, Christopher is well aware just how little income we have to live on since his dad went on Social Security Disability. He understands that he has to work part time for his clothing needs (he's become an expert bargain shopper), his "fun money", and his part of the car insurance. It has been good for him on those days he didn't really want to go to work (and his friends could spend their summer doing fun stuff) to know real men have to work when they do not feel like it. Next best thing to raising him on a farm!

Christopher was THREE YEARS OLD the first time he "prayed in" groceries for the family. We were all amazed that this little guy prayed for food and very shortly a family we hardly knew brought us groceries. We have since seen many, many miracles of God's provision. A few weeks ago, he shared with the Sunday School class he helps teach some of the miracles of provision we experienced when we had no income. That was a very good lesson.

Learning to trust God as a family can be a lot of fun. Learning to live on a budget, making food from scratch, being careful how much we spend, learning to curb our "gottahaveits", etc. is excellent training for our kids. We're much more careful that Christopher learn this than we did with Stephanie. Those twelve years difference in their ages are also the difference in our own ability to live on less. As I've written before, our generation was trained to be good consumers... we had to learn a different way of thinking (and spending).

Please, no more hiding bills or not picking up phone calls. Face your finances head on and get God involved in the process. He's not going to tell you that you got yourself in financial hot water. He may let you simmer and get uncomfortable for awhile so you think twice before doing it again! He's still in the redeeming business... even if it is redeeming your financial life.

If your finances are on solid ground now, do not be tempted into unnecessary large purchases or going into debt unless you are absolutely certain this is God's leading. My friends, the storm clouds are on the horizon and (regardless of what some economists are saying)... it doesn't look good. I'm seeing the 1970s all over again except a much stranger situation. When people like Donald Trump are using the "D" word (or as he called it, "something worse than a recession") that gets my attention.

On the bright side, I've found every challenge to also contain an opportunity. This is also the time to think of ways the family can bring in more money as well as pay off debt. Hard times either bring families together or tear them apart. If you've read much about families in the Depression, most were brought closer together and they were surprised to find their memories of mostly good times rather than having little money. That generation is leaving us quickly. Too bad... we need their advice today. (Hmmm... can we say Google search?)

Next time I'll write more about thinking through priorities, preparing for a recession, deepening the pantry, etc. As the angels say... fear not.


Anonymous said...

Thank you again for your series. I'll be back as the encouragement is so helpful.

I know we are not alone in facing financial challenges & know that sadly many more may be in the near future as well.

Mishel said...

Excellent posts (part 1 & 2). I'm very much looking forward to the next in your series.

Susan said...

Very good advice concerning finanaces and debt. And yes, God is in control whether we acknowlege HIM or not, but when we see God in our circumstances we see the good in it and that's why we can say we are blest. I remember back in the 1980's when things were tight, my family still had a good meal everyday and a warm place to lay their heads to sleep at night and for that we were truly thankful.
I enjoy reading your words of wisdom.

Vee ~ A Haven for Vee said...

One must be very careful before using a credit card consolidation program of any kind. It can be used as a last resort, but only then. It actually flags all credit cards and can create further problems for credit ratings.

And, one must also be careful of placing too much of a burden on children. I think that I was guilty of that one once upon a time. I know I was. I heard about it!

Thanks for your good advice. "Denial" is the number one problem for us all.

the feathered nest said...

Thanks for the advice! It's always good to hear it from someone that has experienced something first hand. Looking forward to the rest of your posts!


Janice said...

Thank you for this wonderful post. I am looking forward to your future ones. I enjoy everything you post all the time.