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Learning From Financial Missteps

MoneyWise

Christian talk radio with Rob West

August 9, 2022

Everyone makes mistakes with finances. The only difference is that some people learn from them and others don’t. We’ll talk about how you can learn from financial missteps today on MoneyWise. We all need to learn from our mistakes and use that experience to constantly improve how we manage money. Fortunately, God’s Word is full of wise advice to help us do that. MISTAKE 1: OVERSPENDING The first mistake we often make is profound. It’s spending more than we earn. This inevitably leads to debt, which is really financial bondage. We’re all familiar with Proverbs 22: 7. It reads, The rich rule over the poor, and the borrower is slave to the lender. You’ll never get control of your finances unless you learn to live below your means. Keep in mind that we’re primarily talking about consumer debt here. Other kinds of debt, such as for a business, a mortgage, or education, are in a separate class because they can actually lead to a greater financial return. Consumer debt, on the other hand, results in .netloss due to the interest you have to pay. The solution is a spending plan that enables you to live on less than you earn so that you can actually save money for the future. The free MoneyWise App can help. It has three different ways to set up your spending plan. It will also track your spending so you can stay on budget. However, the next financial mistake makes that difficult to do MISTAKE 2: INFLATED FIXED EXPENSES Try to keep your fixed expenses from getting out of control! Your regular bills always make up the biggest part of your budget, and the biggest part of your fixed expenses is usually your mortgage. You can easily become house poor by taking on too big a mortgage. That makes it difficult to meet your other obligations and to save. You also have to watch your other fixed expenses such as car loans, insurance, cable/streaming, and utilities. Proverbs 21: 20 warns, There is precious treasure and oil in the dwelling of the wise, But a foolish man swallows it up. We have to be on constant lookout for ways to keep those fixed expenses as low as possible. MISTAKE 3: IMPULSE BUYING The next financial mistake is buying something for emotional reasons, otherwise known as impulse buying. You see something and think it’ll make your life better or give you a sense of happiness, only to discover days after that you’re no better off. 1 John 2: 15 reads, For all that is in the worldthe desires of the flesh and the desires of the eyes and pride in possessionsis not from the Father but is from the world. [ESV] Now, it’s not wrong to enjoy the goodness of God’s bounty, just make sure that whatever you buy satisfies a real need or provides a lasting blessing. If you’re not sure, apply the 30-day rule. If you want something, wait a month before you purchase it. By then, you’ll probably have forgotten about it. MISTAKE 4: BUYING SOMETHING YOU CAN’T AFFORD The next financial misstep is buying something you simply can’t afford. It’s easy to know when that is, because you’ll probably have to use a credit card. So a good rule of thumb is that if you can’t pay cash, don’t buy it. Of course, the lesson here is really about being content with God’s provision. 1 Timothy 6 instructs, godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. Using an all cash or envelope system to manage your spending plan is a great way to avoid using credit or debit cards. And again, the MoneyWise app has a digital form of the cash envelope system. When the money in a particular category is gone, you have to stop spending or re-allocate money from another category. MISTAKE 5: NOT RECOGNIZING YOUR WEAKNESSES The last mistake is not recognizing your weaknesses. It’s often said that admitting you have a problem is the first step in solving it. And this really wraps up everything we’ve been talking about. If you have a weakness in one of these areas admit it and take steps to correct it. For example, do you stay up late watching infomercials or window shopping on Amazon? If so, admit to yourself that you have a problem. Then turn off the tube or close your laptop to avoid the temptation of over-spending. This takes a certain amount of humility. Our pride doesn’t want us to admit we have a problem managing money. But Proverbs 16: 18 warns, Pride goes before destruction, and a haughty spirit before a fall. If you’re a bit gloomy now thinking about the financial mistakes you’ve made take heart. Romans 8: 1 teaches, There is therefore now no condemnation for those who are in Christ Jesus. On today’s program, Rob also answers listener questions: ● What is the best way to prioritize debts to determine which to pay off first? ● What is the minimum amount for an i-bond purchase? ● How can you minimize your capital gain tax liability on a property sale? ● Will your credit score drop after paying off debts? ● When going through a divorce, should you focus on building your emergency fund or paying off debt? RESOURCES MENTIONED: ● Christian Credit Counselors

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