by Brad Hoffer
Soon after we moved into our house, a new couple, who I will call Jack and Diane, moved in across the street. We actually knew Jack from high school. Jack and his wife were very nice. I knew he was a banker, but didn't know too much more than that. We would talk from time to time, but most of the time we just waved "hello".
What I did notice, was how Jack lived. Since our neighborhood was new construction, most of us had half-green yards, but not Jack, he rolled out plush green grass. "Wow, look at Jack's yard", I would say to my wife as we drove up to our house. It was professionally landscaped and just looked perfect. From time to time Jack would park his Escalade and boat along the street. It was big and it was nice. Soon Jack got a stainless steel pool and built a patio with a ceiling fan. His backyard was mainly a hill, that is until he basically turned it into a pyramid with all of the stone pavers, steps and fire pit at the top. I usually try not to compare to others, but I found myself saying to my wife, "I don't know how much money bankers make, but there is no way it is that much! He must have some kind of inheritance or maybe he is the president of the bank!" Now at this time, he would have been in his twenties, so I was pretty sure he was not the bank president. The other thought I had was that maybe Jack had 200,000 in credit card debt!
Our house was built without too many upgrades, hoping someday we could add a deck, an island to the kitchen etc. But we knew we wouldn't be able to afford those things for many years. So at times, it was difficult to watch Jack just buy everything, all at once. I'll be honest, it really didn't bother me too much that I didn't have the things he had, however, it did make me frustrated with our own financial position. We felt like we didn't overspend and yet we had credit card debt, we had a large mortgage, school loans and there just never seemed to be enough money to be able to accumulate any real savings.
One day, I was outside and another neighbor asked if I heard what had happened to Jack? "No, what happened?". My neighbor explained…he was driving his car on a high bridge, pulled to the side of the road, got out of his car, ran and jumped off the bridge. The water is shallow, and typically, this would mean certain death. But somehow, miraculously, Jack must have landed in just the right spot in the river. A man was out fishing and pulled him out of the water, unharmed! Completely shocked by this news, he continued to explain, that apparently, Jack had been using his position at the bank to take out fake loans under his Grandpa's name. He had taken over $300,000 in loans, and spent it. He felt like there was no way out of the mess he had made and so he was hoping the life insurance money could be used to make things right.
Throughout the many months following this, the bank did an investigation, and decided not to press charges, they only wanted him to pay back the money. The court decided in addition to paying back the money, he would have to do many hours of community service. It is unbelievable, and controversial, that he didn't get any jail time. The house was foreclosed on by the bank, and all of Jack's things were sold off to repay the bank. His wife stuck with him throughout the whole ordeal and they got an apartment together and started a new life, with very few things. He worked at the meat counter of the local grocery store and eventually got involved in ministry at his church.
We have a neighborhood men's Bible study that meets every other week. Jack came to one of our meetings and shared some of his story. He was truly a changed man, and talked about how his view of money had changed, but that his new life wasn't an easy one, since he would be repaying his debts until his death.
I reflect on his story often…what if we had started to spend to keep up with 'the Jones's'? What if, by comparing to others, we let jealousy and bitterness ruin our lives when the reality was we were comparing ourselves to something that wasn't real? It reinforces to me, that we each have our own life to live. It is a life that God gave you, the job that He gave you at this point in your life, friends and family that He wants you to love. You can spend your whole life wanting something more, wanting what someone else has, but at the end of the day, finding contentment, is one of the greatest riches known to man.
by Brad Hoffer
Succeeding in budgeting, spending less than you are making, carrying no credit card debt, all of these things are a mind-set. A mind-set that says, this is what we 'will do' and this is what we 'won't do'. For years, I fell into the trap of believing that I was somehow beating the system with 0% credit card offers and then juggling the debt from card to card in order to quote / un-quote, "accomplish our goals".
The problem with credit card debt, even at zero percent, is it sucks the fun out of whatever it is you bought. Every time you use your new TV, new computer, put on your new clothes, you have the stress of knowing you still owe hundreds of dollars on your credit card bill. Hundreds, that you don't have. You do the math to see if you can pay it off before the high interest rate 'kicks-in'. Each month you make a payment and each month, those things that you bought are no longer new, in fact, they are getting old. What's worse, if an unexpected expense hits (i.e. stove breaks) you suddenly are in over your head. You cannot afford to buy the stove and you must use a credit card. Now you have just made your situation much worse. You start looking at what the interest rate will become, start looking for other areas of income and where you can cut-back. This is what I call, "the Credit Card Prison", because there is no easy way out, it just takes time, painstakingly slow, time.
This is no way to live. What did you gain? If you save up your money, then make the same purchases, you might have to wait longer, even a year, but in the end, your life is so much fuller. And if what you want is technology, you will always be better off waiting. It will be cheaper and/or there will probably be something better.
So why do we fall for this lie. I remember getting 0% offers and believing it was free money. The truth is, it is not money, it is debt, it is bad-debt. There are situations where it is unavoidable, but as far as you have the ability to avoid credit card debt, you need to avoid it. Your stress, your peace, your happiness will all be improved if you can live without it.
Today, my wife and I do use a credit card, but we pay it off in full every month. We have the mantra, 'never again'. What we mean is, we will use all our power to ensure we will never carry credit card debt again. This is what I call a mind-set. We have set our minds, we have agreed upon a common goal and it influences our conversations and our decisions. This is a powerful way to truly gain control, to guard yourself against the debt trap.
Now when I see a 0% offer, I smile, shred the junk mail and move on with my day in freedom.
I have been an Auditor, Analyst, Accounting Manager, Business Systems Manager, Controller and Director of Finance over the past 15 years of work experience. In my free time I developed the XLYourFinances spreadsheet and website. I serve my community as the Vice President of the school board and enjoy golf and spending time with my family. We attend church at LCBC.