A large number of people start off the new year by eating black-eyed peas and cabbage on January 1st. Some of those people do so because superstition tells us it will bring us good luck (black-eyed peas) and financial prosperity (cabbage), while others do it because that’s what their mom always did.
Admittedly, I enjoy participating in and hearing the stories behind traditions and superstitions as much as the next guy, especially when food is involved. In fact, this is why I wait for Mondays when I have a red beans and rice craving. (See Monday Beans) After all, why a tradition exists is, in my estimation, just as important as how to follow it. Spending 7 years working in the fire service taught me that “that’s how we’ve always done it” is a much used, but frequently inadequate reason for continuing a practice. If you’d like to read a funny tale of why it is often a bad reason, read this quick story about Zig Ziglar‘s prized ham. Superstitious or not, I think most of us will agree that black-eyed peas and cabbage are about as effective as playing the lottery when it comes to bringing us luck and riches, so I thought I would I share some of things that I have learned about how to achieve financial freedom and how to create your own luck in 2015.
Last week, I got what may be the most feedback I have ever gotten after preaching a New Year’s resolution type message at church. It was a staggering reminder to me how many people out there are struggling financially, and not just those who don’t make enough money. There are plenty of families out there that make over $200k a year who are drowning in debt, living paycheck-to-paycheck, and not preparing for the future. This has been my motivation for this blog post.
Before I share what I think can help you handle your finances the right way, what I believe is the Biblical way, let me give you a disclaimer: most of what I am about to share with you comes from my experiencing many years of financial failure. At 27, I filed bankruptcy with $37,ooo in debt making about $31,000 year. I then proceeded to allow my family to get back into a good amount of credit card debt, acquire 2 car loans, and even buy our first home that we really weren’t ready for. As if that wasn’t enough, I also stood by and watched as we built up almost $50,000 in student loans. Here are some of the things we did as a family to save ourselves from complete financial destruction.
1. GET EDUCATED AND MOTIVATED
Our financial life took its first step in the right direction the day I picked up The Total Money Makeover by Dave Ramsey. What was most eye-opening to me was how simple it could be to handle your finances the way the Bible asks us to.
Note that I did not say easy, I said simple, meaning that even a regular non-finance major like me could easily comprehend the concepts presented. Educating myself financially did not mean learning all the ins and outs of the stock market, how to diversify a portfolio, or what average yield returns on 10 year CDs are. I learned the more about the right and wrong approach and mindset to treating money. Here is what it did for me: it radically changed my perspective on finances. Or, as Ramsey would say, it started a financial paradigm shift for us as a family. Seeing the progress we were making encouraged me to take Ramsey’s Financial Peace University class at our church, Fellowship of the Parks. Nothing is more motivating than progress!
Please believe me when I tell you that this class completely changed our lives. I estimate that we followed the program at about a 65% commitment level, and we have seen amazing results. In the next 3 years, we eliminated all consumer debt, paid off both of our cars, accumulated emergency savings that could pay 3 months of our bills, fully funded our employer matched retirement accounts, and opened IRAs for each of us. We now owe only on our house and Ann’s student loans. We have had no huge financial windfalls and nobody backed up a dump truck full of money on our lawn. We simply educated ourselves on how to manage our finances. It does hurt a bit to think where we would be right now if we had gone all in and been 100% committed.
2. TAKE A FINANCIAL HEALTH MONTH
About 4 months ago, I started the process of calling just about every company that I send a dollar to to see where I could save money. I called my cell/home phone/internet provider, my satellite service, the electric company, my mortgage holder, and even sat in front of a buddy who is my auto insurance agent and went through my policy line by line. It was very eye-opening to see just how much money I was wasting every month simply because I was too busy (or lazy) to make some phone calls. When it was all said and done, I decreased our monthly bills by almost $400 a month, got a $300 credit on my cell phone bill, got a check from my insurance company, decreased the interest rate on our mortgage by a full 1%, and cancelled my Direct TV NFL Ticket (I still am not ready to talk about that yet.) I don’t care how much money you make, it doesn’t make sense to pay more for something rather than less. And it makes even less sense to pay for something you don’t ever use. (See ya later 24 hour fitness membership!)
This process also included making an honest, accurate budget. It is very eye-opening to create an exact budget that accounts for every dollar you spend. I determined that I eat too much, could save a little more, and that it feels good to plan vacations that you know will be paid for before you leave for them. There is one little caveat that makes any budget more effective: YOU HAVE TO FOLLOW IT! I have a math/numbers brain, creating a budget can actually be fun for me. Sticking to them is a different story! My advice to you is to track your spending, decrease it where possible, create a manageable budget, then stick to it. And in your budget, make room for #3….
3. BE GENEROUS
If you make $25,000 a year or $250,000 a year, make it a priority to be generous with what you have. The single greatest financial decision we ever made as a family was to start tithing 10% of our income. From that day forward, our family’s financial situation has continued to improve. In my mind, there is NO coincidence here. I fully believe that God will bless a joyful giver (2 Corinthians 9:7). Currently, the first lines on our budget each month are dedicated to giving money away, before food, before the mortgage, and before clothing. I now have realized that I have been the beneficiary of generosity many more times than I have been the giver. I intend on changing this over time.
Yes, I am a pastor. No, I don’t say this to increase giving at my church. If you are not a Christ follower or for some reason don’t trust ‘the church’ or your church, start by giving away 10% of your income to the person/organization of your choosing. Just give God a chance to bless you through generosity by committing to doing this for 3 months. I am NOT promising you financial riches or a “return on investment”. I am simply telling you that giving builds a foundation of generosity, humility, and selflessness. Just realize that no matter how much debt you are in, how tight your budget is, or how much money goes in/out of your bank account each month, cheerful giving will soothe your soul and remind you of just how fortunate you are.
Whether you are making minimum wage or six figures, I hope that 2015 is a year that brings you financial peace. l wish you 365 days full of black-eyed peas and cabbage.
Thanks for reading and please feel free to comment and let me know what things you have done to improve your financial situation.