Don't Be A Toadie

It amazes me sometimes just how deep, and how often, people get into debt. I'm not pointing fingers. I'm guilty of this. Just ask my wife. People like me who enjoy spending money are always in danger of spending too much. The discipline of reeling ourselves in takes time and practice.

I'm sick of being in debt. It's one of the main reasons I've decided to strive for debt-free living with "gazelle intensity," as Dave Ramsey says.

But there's another reason I want to be out of debt: I don't want to be a toadie.

Humans are like toads sometimes. You put them in a frying pan and turn up the heat, and the little toadie will cook to death because he doesn't sense the gradually rising heat (or so I've heard. I don't think MythBusters has done an episode on this yet. PETA probably won't let them). Just like that poor little toadie, those of us who attract debt just sit there as the mounting threat of debt builds around us. We start to sweat under the pressure as the heat rises. It takes a lot sometimes to realize that that sizzling sound isn't a barbecue. It's our butts!

You can always tell who the toadies are too. They're the ones living in a run down trailer with a six different satellites attached and a brand new 4X4 parked out front. They're the ones with high blood pressure. They're the ones who can barely afford to pay the rent, but go to the movies every week, buy gourmet coffee every morning, and eat at restaurants like they're going out of style.

UrbanDictionary.com defines "toadie" as someone who is a side-kick, a tag-along, someone who does the dirty work. Like people with too much debt—they're not walking around with a credit card in their pocket; it's the credit card that's walking around with a toadie attached, tagging along, spending and spending and spending. The dirty work.

I don't want to be a toadie. I don't even want to look like a toadie. When people look at my house I want them to see evidence of a good steward. I don't want to be embarrassed by my purchase history. I'm done living in the frying pan of debt collectors.

Keep pinchin' :-)

Swiper, no swiping!

Saturday morning at 8:26a.m. my cell rings. I don't answer it because I'm still in bed half asleep. It's Saturday. Come on! I don't even check to see who is calling me. I start to think it's probably a politician and figure that when I'm awake enough I will add them to my blocked list, or go online and figure out how to stop their calls.

Anyway, back to sleep.

At 8:45 I finally decide to listen to the voicemail. It's someone from the fraud center at my bank wanting me to contact them to confirm some strange transactions that had been made on my debit card, which they believe maybe stolen. Until I call them my card is being shut off to protect me.

At 8:52 I dial the number... and get it wrong. Frustrated, I try again... and get it wrong again. Sigh. Finally I get it right. If ever you have to call customer service do it at 8:52a.m. on a Saturday. I only had to wait a few minutes to get through to someone.

They stated I needed to confirm or deny several purchases that had been made with my card that morning.

"Did you place a purchase with an escort service?"

"Um.. NO!"

"Did you place a purchase for glassware in Massachusetts?"

"No."

"Did you place a purchase for $720 on Walmart.com?"

"No!"

The lady on the other line said my card was going to be shut off. She would contact my bank to issue me a new card and then send me paperwork so I wouldn't be liable for the above mentioned purchases. Thankfully I have identity theft protection through my bank, so this should all be cleared up at no cost to me.

However the timing couldn't be more strange. I have barely used my debit card recently, using mainly cash and a new American Express credit card that we got for the reward points. We also seem to be in the middle of a series of unfortunate events when it comes to our finances, which you will have to wait until tomorrow to hear all about.

I can't help but think this all stems back to my post on Trusting Him Without Borders because at least six financial surprises have happened since then, as though God is trying to test my trust in Him by getting me to put my money where my mouth is—no pun intended. Although money woes are not fun, I'm trying to choose to trust the Lord in the midst of it.

Have you or someone you know ever been the victim of credit or debit card fraud? How was your experience and what did you learn from it? Share your thoughts below!

Keep pinchin' :-)

Seven Things I Really Don't Need: Part 1

Dani and I have approached the halfway mark in our facilitating of Financial Peace University at our local church. The Bible-based money management program has attracted about 60 participants, some of whom are beginning to experience some success in their battle against debt.

This week's lesson was about the marketing gimmicks that companies and advertising gurus use to lure us into buying tons of junk we don't need. Think you're immune to their schemes? Think again. A lot of their tactics are subliminal and extremely, extremely clever.

Back in 2006 USA Today reported that some stores have experienced an increase in sales by manipulating people's sense of smell. The Sony Style store, for example, pumps the subtle fragrances of vanilla and mandarin oranges into the store to make you feel so relaxed that you let your guard down. Bloomingdale's uses the faint whiff of baby powder in the baby section and suntan lotion in the summer aisles to help entice people into buying related products.

Companies do extensive studies to figure out how best to hit you. A study of credit card use at McDonald's found that people spent 47% more when using credit instead of cash. It's easier to spend more with a credit card. Plain and simple. And companies are doing surveys and focus groups and other studies every day to learn how to target us—you!—and make you buy stuff.

Repetition. Product placement. Logos. Radio. TV. We all like to think that those advertising schemes are tricking other people, but just because you may be aware of their methods doesn't mean you shouldn't be on your guard.

Dave Ramsey—the guy behind Financial Peace University—lists seven things that people are continually tricked into purchasing that we really don't need. I'll list his seven things, and then I'll list mine (things that are pitfalls for me that I know I don't need, but I sometimes end up buying anyway).

1. Luxury cable TV packages.
2. Private schools.
3. Elaborate vacations.
4. Eating out.
5. Expensive gadgets.
6. Name brand clothing.
7. Expensive hobbies.

Dave doesn't deny that the above things are fun from time to time—a vacation on the beaches of Florida sounds nice, doesn't it? So does a round of golf with the guys!—but when you're struggling to get out of debt there are sacrifices you have to make. Those seven unnecessary things listed above are great places to start. You don't have to sacrifice them forever, but if you don't start taking the right steps toward financial freedom then you'll simply never get free.

Now, for me, I don't watch a lot of TV, and neither does Dani, so we don't have any kind of cable or satellite TV package. There's a few shows that we like to watch, but we can usually find them online. Neither of us are really into expensive gadgets or brand name clothing, and we don't have any expensive hobbies. But we're not without our pitfalls. Trust me! Want to know what mine are?

Tune in tomorrow!

(You're hooked now aren't you?)

What to Do When Collectors Go Too Far, by Dave Ramsey

Dave Ramsey posted a fantastic blog this week about how to handle debt collectors when they go too far. The first thing to know is that these people DO NOT have the right to abuse and harass you, so here's some tips on how to deal with them before you get too emotional and do or say something you'll regret. If you'd like to read the blog on Dave's page, click here and give it a "like."

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Everyone who has ever dealt with a bully knows that there is a point where they push you too far.
When that happens, it’s time to push back.

If a bill collector is harassing or intimidating you, here are some ways to fight back:

Hang up
If a collector is yelling, cursing or even threatening you, you don’t have to stay on the phone. In fact, it’s best if you don’t. If you keep listening when they berate you, you might get too emotional and do something unwise like give them free access to your checking account. You won’t get in further trouble by disconnecting the call.

Record the call
Collectors break the rules set by the Federal Fair Debt Collection Practices Act of 1977 all the time. If you are able to record the call (and tell them you are doing so), one of two things will happen. Either they will continue the abuse and you’ll have it on record, or they’ll hang up and you don’t have to listen to them.

Know their tricks
Collectors try to pick the busiest (meal time), the most inconvenient (heading out the door to work), and the most embarrassing times (holiday or family gatherings) to bother you—it increases the odds of them making you overly emotional. If you know the tricks of their trade, you won’t be caught off guard if they try to pull one over on you.

Know your rights
You as a consumer are protected from bullying tactics under the Fair Debt Collection Practices Act. That includes a collector not being allowed to call you at work and only being allowed to phone you during certain hours at home. If a rude collector is waking you up at five in the morning, he or she is violating federal law and you can use that to defend yourself. Collectors prey on you not knowing your rights in order to manipulate your emotions.

The best part about fighting back is the sense of empowerment that it gives you, both over the situation and your money. It breeds confidence and makes you feel like you can win financially.

If you are being bullied by a collector, you don’t have to take it lying down. Visit Collection Bully now.

Diligence: Excellence Over Time

If I could pick two words to describe the American culture of 60 years ago it would be "hard-working" and "diligence"—two things I think we need a lot more of in today's world. Because if I could pick two words to describe the American culture of today it would be "laziness" and "convenience."

Our culture today has become one of immediacy, self-gratification, and ease. Our advertising campaigns are rife with slogans that make us think we need it bigger, better, faster, sooner, with more convenience, more easiness, more simplicity...

• Have it your way —Burger King
• Because I'm worth it —L'Oreal
• That was easy —Staples

GEICO's slogan from a few years ago, "It's so easy a caveman can do it," implies that if you don't get this insurance than you're dumb, you're behind the times, you're obsolete, you need to get with the modern program. And there are countless other slogans that suggest the same attitude.

Credit card companies suck is into believing that without a credit card we can't do anything...

• There are some things money can't buy —MasterCard
• It's all about you —All Hilal Bank
• Do more —American Express
• Take the waiting out of wanting —Access
• What matters most —Chase
  (What's really interesting about this one is if you read it this way: Chase: what matters most.)

Many people who don't have a lot of money are tricked into believing that if they can't walk into Walmart and buy a $1,500 flatscreen TV then they are not as cool as their friends. So they get a Visa card because, according to the commercial, "Life takes Visa."

As with almost anything in this world, this belief that we need to borrow money to live is contrary to Scripture. The Bible is clear that those who are faithful with their money will abound with blessings, but those who hasten to be rich will fall (Proverbs 28:20).

Millionaire Donald Trump once said, "Most people who try to get rich quick end up going broke instead." Granted, this is the same man who once also said, "It really doesn't matter what they say about you as long as you've got a young and beautiful piece of a**," but, regardless, he's absolutely right about the first quote.

"No discipline seems pleasant at the time, but painful. Later on, however, it produces a harvest of righteousness and peace for those who have been trained by it." —Hebrews 12:11

Thomas Jefferson, one of our most quotable presidents, once said, "If you want something you've never had, you must be willing to do something you've never done."

And that's the way it is with good money management—you've got to be willing to go against the grain of what's popular, step out on a limb, trust in God, and do something you maybe have never done before. And, guess what, it means you're not going to get everything you want right now, today, and with no effort, but that's ok because the best things in life are worth the diligence they require.

Keep pinchin' :-)

Are Credit Cards REALLY That Bad?

I'm just going to go ahead and let the cat out of the bag: Dani and I have a credit card.

"But Jake, doesn't that violate Dave Ramsey's Commandments about financial freedom?!"

Probably, but, then again—and here's the second cat out of the bag—I don't necessarily agree with absolutely everything Dave Ramsey says.

"Heresy!"

Ok, ok. Just put the torch and pitchfork down for a minute while I explain.

Dave Ramsey is absolutely right when he rants about how easily credit card usage can land people in debt. Let's say you take a vacation and you decide it's easier just to put everything on the credit card. You've got money to cover the expenses in your bank account, so it's no problem to pay everything off as soon as you get home, but what if tragedy strikes? What if you need a new car or have a medical emergency and suddenly you can't afford to meet the monthly credit card payments? One missed payment and you're in the hole 30% or more! Besides, if you've got the money in your bank account to pay for everything, why the heck are you using a credit card in the first place?!

The practice of using credit cards is just plain dangerous, and that danger is multiplied exponentially if you don't have money in your bank account to cover the expenses, which is just plain stupid, as Dave would say.

"Responsible use of a credit card does not exist," Dave says in this article The Truth About Credit Card Debt. "There is no positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system!"

Though I wholeheartedly agree with his sentiment, I think Dave can be a little too apocalyptic when talking about credit card usage.

Last Christmas, our Discover card ran a three month cash-back program where any time we used the credit card for gas or online shopping we got some cash back. In three months we earned $80 in cash back bonuses. We always paid the credit card off within a couple days of making a purchase, we never spent a cent on interest, and that $80 went a long way to helping with our Christmas shopping that year. So is there really no responsible way to use a credit card? I think maybe there is, but it takes a great deal of discipline to do so.

According to the American Bankers' Association, the average family today carries $8,000 in credit card debt. That is just shocking, and it is not where God wants us to be financially. A study of credit card use at McDonald's found that people spent 47% more when using credit cards instead of cash—forty-seven percent more! Why? Because the great majority of people don't comprehend that when they flip a tiny little plastic card onto the check-out counter they are, ultimately, spending their own hard-earned money, and probably more of it. It just doesn't compute with them. This is why Dave advocates for the "cash only system." Because when you're spending your cash, out of your wallet, it's easier for your brain to comprehend that "Hey, this is my money, and it's leaving me. Oh my!"

Dani and I have used our Discover card maybe three times in the last twelve months, but each time it is to take advantage of a special offer. It's never in huge amounts, and we always pay it off within a couple days.

Personal finance is 80% behavior. If you find that your credit card is getting you in trouble, get rid of it! Use common sense. Don't spend money you don't have.

Keep pinchin' :-)