Wednesday, January 13, 2010

Recession Ponderings #2 reposted - Getting our finances in order


First posted March, 2008...

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.

Picture: Housewife taking canned goods; allposters.com

8 comments:

Kathi Bailey said...

Thank you for the advice. We are 30somethings (in the military) trying to make sense of all this "recession" stuff. Your posts have been helpful.
- Kathi

Lisa Z said...

Very good reflections, thank you. We are actually doing BETTER than ever in this recession for a few reasons. My husband's "regular job"--teaching elementary music--is certainly not getting better as there is no pay raise in sight and our health ins. premiums went up $90 a month this fall which is ouch (esp. after they went up about the same amt. last year)! But, teaching is a stable job for the most part and for that we are grateful.

We are also very grateful that he and I both were able to get EXTRA work this year. He was "given"--somewhat out of the blue but we believe it's God-directed of course--a job teaching at a nearby private college one night a week and this has added a nice bit of income to our lives.

And then through CraigsList I found a baby I could care for nearly full time (while still homeschooling my 12 yo son), so I am earning an income again where I had not been able to for a couple of years due to homeschooling. Providing infant care is not an easy job by any means, and I went through a seriously hard adjustment when he first started coming, but a few months into it we are settled and I am enjoying the little guy each day. And my DS12, who has Aspergers, is also now adjusted and kinda likes the baby being around too (I suspect).

So, instead of taking this extra money and blowing it, we have certainly been scared enough by this recession (a good thing, in many ways) to use it toward the "debt snowball" that Dave Ramsey talks about. We hope to be debt-free except for the mortgage, AND take a nice family vacation to England, within two years. We have also started that Emergency Fund, finally!

Yes, having extra money right now is making all that possible and we are so grateful. But it's also a new mindset that has taken hold and largely b/c of the Great Recession. I hope many will learn these lessons and live them.

Beth said...

This has come in a perfect time for me...I'm remarried but my childrn's husband called last night to tell me that he will be losing his job in a year. He is much older than I am and it is very unlikely that he will find another job...he will be a few months from retirement so he will most likely take early retirement. (With a significant change in child support and probably no insurance for the children.) However, that leaves me with three children that we have together at home to take care of. It is time to start tightening the belt and possibly getting our house ready to sell and move into something much more affordable. Scary times but thank you for the reminder that God is in control and that He LOVES us!

Charlene said...

What a wonderful, encouraging post. We, too, learned our lessons the hard way through years of using credit cards and spending every penney (and then some!) that we made. We are much more careful now and are paying off those lingering debts little by little. We are working to be debt free or close to it, including paid off mortgage and no more vehicle notes, within 2-3 years. Our son is in his last year of college, and once that expense is finished, we plan to really accelerate our saving and debt pay-off.

Anonymous said...

Thanks for another helpful post!!
I think most of us are struggling to some point today. Or at least needing to change how we do things!! We are spoiled Americans.
Blessings,
Elizabeth

Mel said...

What a wonderful post, may I suggest, 2 of our all time favorites as far as helping with Debt?

One is Dave Ramsey, he can be found at www.daveramsey.com and the other is Clark Howard he is at www.clarkhoward.com both of which have a radio program also.

We love these guys and all that they do to help others.

Hubby & I would like to get out of debt completely and will soon be paying off our car loans, then working on our mortages.

Blessings, Mel

hmsclmom said...

What a great time to repost this Brenda. My dear husband and I just met with Consumer Credit Counseling Services on Monday due to our credit card rates being hyperinflated and us not being able to make headway on paying them off at this rate. What a relief it has been to know that with their help we can pay what we actually owe at lower rates. Through their plan, if we stick with it, we can have our credit cards paid off in 4 years. At that time our truck will also be paid off and our home will be paid off in 6 years. There is a light at the end of the tunnel! Things will be tight for us financially due to me getting less hours as a substitute teacher since the school districts are also having to tighten their belts but God is in control and we will overcome!

Blessings,
Debbie

Tracey McBride ~ Frugal Luxuries™ said...

Thank you for the wonderful article Brenda. It's very, very helpful, as are the comments. I'm enjoying this series (missed it the first time around). I look forward to the next one. In the meantime, I am skipping over to your food pantry blog and hope to thoroughly explore it, as I've been meaning to do for ages and ages.
Warmly,
Tracey
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