Trying to follow

I’m going to keep this short and practical. I realize budgets will vary from city to city and based on circumstances, but I think we can have a fairly frank talk about the amount of money we are spending. I’m not saying we’ll settle on a ‘Jesus says you should live by this budget’, but we will hopefully have a honest discussion about things. I’ll just throw this out off the top of my head to get the discussion going:

Monthly Budget 

• Rent/Utilities/etc- $500
• Food- $100 (per person)
• Car (insurance/gas)- $100
• Miscellaneous- $100
• Emergency- $100
• Fun Money- $100

That’s a $1000 budget per month. Now let me try and explain each category in my own opinions.

• Rent/Utilities/etc- Some might say this can’t be done, but I strongly believe that if your renting you can find a place (you might need to share it!) that will cost you no more then $500 a month, including the utilities. Sharing is usually the way to go, studios are an option, and being a little flexible with the neighborhood might be a good thing. (Mortgages fit in differently in my opinion, more on that another time).
• Food- I think you can probably do it for less then this (especially if you know how to score free food), but $100 per person ($200 for a couple, I guess) is more then reasonable. Of course, if your eating fair trade, CSA, organic, etc. It might creep above this number, but not much.
• Car- Obviously there might be a circumstance where you travel for work and must drive your car, on your own, all over the place, and rack up many miles. I understand that, but most of us, if we put in some effort, could reduce our trips, car pool, and find other ways to keep well within this budget.
• Miscellaneous- This category covers the occasional expenses that come up unexpectedly. If you need more hand soap or detergent, maybe a new pair of slacks for work, or other similar things.
•  Emergency- This is money I would save up, putting $100 a month in an account somewhere, not exhausting it each month. Then, when you have a medical bill, appointment, car maintenance, etc. This money is there to cover it. That’s $1200 a year for emergency medical and car, is that enough?
• Fun Money- This is my favorite category for married couples. My wife and I don’t agree on everything we should spend out money on. So, each month we get an ‘allowance’ of fun money that we can each individual spend however we want. We usually get cash, so it doesn’t show up on our bank statement, for the other to scrutinize and agonize over.

And that’s basically our budget. Now there are a few discrepancies I should point out. School tuition was not on there, nor was school loan repayment, it doesn’t account mortgages, nor large medical expenses or vehicle purchases. I think these fit into a different category other than the regular monthly budget, and rather then complicate things we’ll discuss those in another post.

The brief discussion last week about paying off a home mortgage quickly, has me realizing we need to talk a little bit about finances here. I’ve talked finances many times before and I think now would be a good time to start the discussion up again, both to articulate my views and to encourage discussion about them.

From what I can tell the readers of this blog come from a lot of backgrounds, stages of life, income levels, etc. So, there isn’t a great way to address all of our situations at once. That being the case, I’m just going to go ahead and use some numbers I found on wikipedia for average household incomes. We’ll use $46,326 as the average annual household income. I know many make less then this, and a few make more then this, but we’ll stick with it for the time being, because I think most reading this blog will be making at least that much as a household in the near future if they are not currently already.

I’m not sure how much of my own financial situation I’ll disclose on this blog yet, a discussion and decision still to be made, but I will tell you some of my thoughts on spending, resources, budgets, etc. And the first thing I want to address is this: Most of Us (’us’ being those who have the technology access to be reading this blog) have money.

You might not have a lot of money coming in (income), or you might have a lot of it already tied up in debts, but you have money. According to Barna [via Boyd], Christians spend 97% of their income on themselves. And that’s not based on how much one makes. We tend to spend what we make, in other words, our cost of living usually matches our income (this is a problem). As a individual follower of Christ, or as a group, or as Christians in general, our ethic on finances and budget should not be to simply be smart spenders of our money, but to use our resources for good in the world. An ‘average’ church of say 10 family units (households from the previous statistic) has roughly $463,260 of income flowing through it. There are necessities, like feeding, clothing and sheltering those in the church, as well as some necessary expenses to remain employed at the jobs that create those incomes, but all in all, there could be a heck of a lot of money being used for good in the world.

The big question is: how much do we ‘need’ to live on. With all the potential for good with our resources, what do we ‘need’?

We plan on paying off our mortgage in no more then five years (possibly a little more if you include school loans). This is not something that is encouraged or supported in our debt-driven culture. Even with hundred’s of debt relief books and websites out there, I’ve rarely, if ever, heard encouragement to pay off your mortgage as quickly as possible. People always seem to speak of a house as an ‘investment’ and ‘equity,’ rather then acknowledging that it is also debt.

We’ve decided to purchase a home and we’ve decided to be diligent in paying off our mortgage for that home as quickly as possible. Here are some of the reasons.

• We don’t want to have any debt. For many, taking a loan is a necessary evil to purchase a home (and go to college), but that doesn’t mean we should accept it as good. We plan on paying off our home quickly, because until we do we will be paying interest to the bank and we will have tied much of our income into our loan.
•  We want to serve as an example of fiscal responsibility. With so few examples and encouragement to pay off your mortgage, I think few people think it’s important or even worthwhile.  I think incredible good could be done with the financial resources we would have available if we did not need to constantly use our income to pay the interest on a house payment.
• On the practical side of things, purchasing a home now will help us invest our ’shelter’ money into paying off a mortgage, rather than paying for rent somewhere. We considered saving up the money for a home first, but realized that it might be wiser at this stage to take a loan and pay it off quickly than saving up to pay cash.

Again, this is just a few of the reasons. The goal was to address the financial and ‘mortgage’ side of things and try and explain how what we are choosing does not necessarily fit the ‘traditional’ way of home ownership.

This is also the stage where I would really really appreciate some feedback. Those who own homes might have insight’s I haven’t considered. Those who don’t are in a good place to challenge me on some of what I’ve shared. I think a deeper dialog on this topic would be really valuable. What are your thoughts?

Sometime in the next couple months my wife and I will likely purchase our first home. As a friend of a friend said concerning that and my values which I clearly convey on here about money and community, she said:

“Isn’t that Hypocritical?”

The honest truth is, it might be. For the next few days though, I want to try and articulate some of what has gone into the decision and where we hope to go in the future. In hopes that even friends of friends will continue to hold me to the values I acknowledge and convictions I have.

In our current culture, I think it’s probably important to start with why I have not bought a house before I even begin to discuss our decision to buy. I’m not sure how many reasons I’ll list so I’ll just use some bullet points.

• Debt is a Bad Thing. In our consumer driven, credit-card swiping society, I think this statement is becoming more and more uncommon. As the value of your almighty ‘credit score’ increases people are becoming more and more convinced that debt is good (not ridiculous debt of course, but where do you draw the line?). In my journey of questioning our culture and continually checking my faith to Scripture rather then society I feel the statement above is quite obvious.
  [sidenote: Did you know the quote, "The borrower is slave to the lender" is actually by Benjamin Franklin? (update: actually proverbs 22:7 is pretty close)]
• Renting Makes Sense. People tend to talk about buying a house like it’s a no-brainer and that renting is ‘throwing away your money.’ First of all, buying a house causes you to ‘throw away’ money on closing cost, interest, mortgage insurance, taxes, and more. In the same way that insurance can sometimes make sense because it transfers the risk to the insurance company for a small fee, renting put’s the risk of house problems and cost into the hands of your landlord (Which has been a might good idea in my opinion).
  
• A House is a part of the ‘American Dream.’ And, as you know, I’m quite skeptical of the U.S.A. Dream. I do know too many young people who have stepped into home ownership, with the support of friends and family and church members, and gotten in way over their heads. That dream forced them into jobs and hours they didn’t want, projects and expenses they hadn’t planned on, and ultimately consumed much of their lives.
  
• Home Ownership is available to the privileged. Many in the world do not have the resources to own a home, why should I? Why participate in a profit driven, redlining discrimination, capitalist market, that only some can afford to be a part of?

I think there are more reasons but we’ll leave it at that. Here’s the honest, but possibly hypocritical part of this. I think at this stage buying a home is the wisest decision for my family and for building community, but I recognize that it’s entirely possible I’m twisting my values to justify my selfish behavior (I don’t think I am, but I recognize I’m not a purely righteous person). Therefore, I leave it up to you, friends and readers, to challenge me, converse with me, and help me think through this decision while keeping with my values and trying to follow.

Experiments in living that step us out of our normal life experience can be invaluable tools. I think they are the sorts of things that begin to help us question our current lifestyle. One Josh writes:

It’s a shame that as a culture we are so used to excess that we don’t even recognize it anymore.

And it’s a shame that I’ll probably wrestle with this decision for another month. The entire time talking about ethics and Jesus and taking the moral high road. Feel good about myself. And then break down and buy it.

I’m a hypocrite.

It’s an honest struggle and these words connect with a lot of us, as they are things we rarely even dare to think out loud or acknowledge. For Josh, it’s this sort of pondering that led him to give up this. I am so happy to see Josh make a decision like this because I really believe it will free him up to focus on and be willing to challenge other areas of his life and choices. I am excited about were this new freedom and balance will take him.

Another Josh, contemplated this:

I remember reading somewhere a few years ago about someone who tried to eat off of a dollar a day in order to gain some type of understanding of what (I’ll say a majority again) of the world’s population goes through in regards to that key element of survival, eating. I don’t remember much about the article, but I began wondering if I could do that. Wondering led to doing some calculating and strategic thinking, which led to this post. Day 1 of $1 a day. I have four weeks of training left. My goal right now, is to make it through the next four weeks on $1 a day for food, (Monday through Friday, I go home on the weekends, and will try to keep it up, but won’t make my wife and kids go through it too). That doesn’t mean I won’t eat food that has been provided for me without cost to myself, (for example, we have a snack table everyday at our training session that is free, but more on that in another post), and I still have a few leftover groceries from last week that will help me for a few days.

In his first entry a few days later he chronicles what he’s been eating thus far, including a excessive snack table at his training, and concludes:

I make light of this, mostly because of the ridiculousness of excess. I am grateful for my friends and their willingness to share. (I’d like to add here that I have not yet solicited any food.) I have been truly blown away at how much more we eat than we really need to. I also realize that hanging out with others who are not trying to live off of $1 a day, has benefited me. I am well aware that living amongst others in a similar predicament would have different results. I have other observations and other thoughts that I will continue to process and post later.

I really appreciate both of these guys and the way they are willing to challenge their current lifestyles. I don’t have any notion that by eating on $1 a day Josh knows the experience of those in the rest of the world, but one can appreciate his attempt to try and connect on some level, most of us rarely even go there. As always, I assure you Josh will have some valuable insights from his experience and I do believe his eating habits and lifestyle choices will be better for it.