Last night, CNN aired the special report, The Almighty Debt, hosted by Soledad O’Brien in Atlanta. It had me nodding my head in agreement with so many statistics and opinions mentioned by the experts, as well as the predicaments of the many ‘average Joes’ featured. It had me reflecting on the last several tumultuous financial years I have survived as a young adult.
I’ve been in over my head for as long as I can remember. I was a slave to debt.
I’ve bought three houses by myself in the span of five years (from 2000-2005–not as investments, but to live in), none of which I should have been approved for. My debt-to-income ratio was too high in all three cases, but in the early 2000’s, mortgage companies were all too eager to lend. Was I a ‘victim’ of sub-prime loans? I don’t know that I’d call myself a victim. But I used credit cards to float me, especially with only getting paid once a month.
Last winter, for the first time in my life, all of my credit cards were maxed out. It took years, but I reached my limits and had nowhere to go but down. I started working with a credit counseling service briefly, but it was too little, too late.
Last year, I wanted to relocate but I felt like I was stuck to my house. To date, my beautiful house has had no offers on it in over 6 months, despite a number of showings and price decreases. My house has been on the brink of foreclosure all year. There’s a black hole when it comes to bank paperwork (a.k.a., “the workout package”), so working with them was slow, anything but smooth, and ultimately uneventful. I decided to give up the property in bankruptcy. I’ll probably explain more about that in a future post. (I’ve submitted a detailed story about my battle with debt for a writing contest with Real Simple magazine, so I have to wait until January 2011 when the winners are announced.)
As Hosea 4:6 says, “My people are destroyed from lack of knowledge,” and one of the ways this rings true is in the American educational system. Much to my chagrin, high schools do not teach financial literacy or personal finance. If parents don’t have responsible budgeting habits and prioritize financial skills, the kids are not taught properly, and bound to learn about the rules of money the hard way (loans, debt, and the like), if they learn at all.
As far as tithing when you are in debt, I say this: Tithing is a part of your stewardship, faith, and obedience as a believer. God is your source, not your job (if you have one). I admit there was a time that I didn’t tithe because of my circumstances, but that was fear that I allowed to get in the way. But here’s the thing: In the natural it may not make sense to tithe, but faith is not based on the natural and our present seen circumstances. God knows what you have and what you need. If your heart is not right and/or you don’t want to tithe, keep your money. Again, it’s about your level of spiritual maturity (faith and obedience), not about worrying what happens to the money. Don’t you tip servers in restaurants and pay taxes out of your paycheck? Do you ask them what they do with it? OK then.
Minimizing your use of credit is the way to go. And home ownership is no longer the American Dream. For the first time in YEARS, I am now regularly contributing to my savings account. I use cash and debit for all of my expenses. As a result, I have more peace of mind with my finances than ever before. I highly recommend Dave Ramsey’s book Total Money Makeover as a plan to get started with revamping your finances, which consists of 7 ‘Baby Steps’ . His book and teachings have done more for me than the $500/yr I invested with Ameriprise financial planners (what a waste that was)!
For awhile I wasn’t going to mention anything about this, and keep up a facade. But taboo subjects and secrets do not bring healing. Exposing the truth and confronting demons does.
I was a slave to debt. I’m so glad I’m free now.
I look forward to your comments.