Wednesday, September 05, 2007

Who does "doing good" benefit?


Ever look around and wonder how the people around you have so much and wonder why you have so little?

People always seem to have enough money to eat out, buy name brand clothing, have a cell phone, go to the movies, give their kids everything they ever wanted, and give their friends nice gifts. I can't figure it out. I'm a single person with no children. My frivilous expenses consist of the minimal cable package, Starbucks once or twice a month, and a few books from 1/2 price books. Yet, those "frivilous" expenses and my basic bills pretty much consume my entire paycheck.

So, how do other people do it?

From what I have finally figured out about some of my friends, there's a simple answer...credit and bad debts. Or in the "best" situation, they make credit cards payments each month (to the tune of 19% interest or more) or they have payday loans or buy at places like Rent-a-Center (to the tune of 40-500% interest...don't believe me?? I didn't either until I checked it out myself.)

I admit, sometimes I envy people who go out to eat every night and don't have to cook. I envy people who have someone come clean their house and take care of their yard. I have twinges of jealousy when people get bi-weekly pedicure massages.

The bottom line, though, is that many people are caught up in our culture of keeping up with the Jones's. Unfortunately, as we're trying to keep up with the Jones's, what we don't realize is that the Jones's are buying everything on credit and digging themselves deeper every day by paying sky high interest rates...all the while, their monthly income stays the same.

Our desire to have what everyone else has...to live the life everyone else does...keeps many people from ever getting ahead...and these days I'm feeling like I contributed to it.

Over the years I have a long list of bad loans I've made that were never repaid. In my mind, I was doing the "Christian thing" by lending people money. As I have begun to understand more about sub-prime mortgages, predatory lenders, payday loans, and credit, I'm beginning to think that my "good heart" and "good intentions" actually hurt the people I intended to help. Hmmm...I wonder if "good intentions" are actually un-Christian because they benefit me rather than the recipient??

Perhaps if I would've said "no" to some people over the years the person would've had to think about figuring how to stay within the limits of what they already had. Yes, it's true that many people have jobs that don't pay them a livable wage. Then again, some people don't have jobs (and aren't trying). By lending them money that they don't have, doesn't that create a "rob Peter to pay Paul" situation for them *if* they choose to pay me back?

I am amazed at how some people juggle their bills on the limited money they make. However, I also recognize that within whatever salary we make, we all have "extras" that we could do without--caller ID, cable, Starbucks, iPods, etc.

Finances are tricky. Everyone wants to keep theirs secret. My personal opinion is that we need to get financial literacy and general business classes into the high schools. But, until that happens, maybe the best strategy (rather than loaning people money they can't return) is to work with banks and non-profits to ensure that there are plenty of opportunities available for all kinds of financial literacy classes. Maybe these could be a start:

  • Balancing a checkbook and creating a budget

  • Saving up instead of paying out (to rent-a-center and payday loans and such)

  • Planning for retirement

  • Considering purchasing a car or a home?...don’t forget about the extra expenses that go along with it

  • Planning for my child’s college education…the best way to save and receive financial aid

  • Understanding the college loan process

  • Beginning the process of cleaning up my credit
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