Outrunning the Debt Monster
About the Guest
Are your spending habits becoming a debt habit? Christian financial expert Ron Blue shares four biblical principles for building a healthy financial foundation for your family.
Ron BlueRon Blue is the founder of Ronald Blue & Co., LLC. He is considered a successful entrepreneur in the financial services industry and an admired leader and speaker on the topic of biblical financial management. Ron retired from the financial planning firm in 2003 in order to lead an international effort to equip and motivate Christian financial professionals to serve the body of Christ by implementing biblical wisdom in their lives and practices, resulting in financial freedom and increase...more
Are your spending habits becoming a debt habit?
Outrunning the Debt Monster
Bob: We were out to eat the other night, and I left a generous tip for our waiter. In fact, it was an extremely generous tip. In this particular situation, I tipped 40 percent.
Dennis: Oh my goodness!
Bob: Yes, I did.
Bob: My wife looked at me and she said, “Forty percent?!” I said, “Well Honey, the waiter was our son!” [Laughter]
Dennis: I was waiting for the rest of the story on that.
Bob: She’s going, “I know, but it is still 40 percent! Make him earn it.”
Dennis: Yes. In fact, I remember a story—our guest on today’s program—Ron Blue. Ron joins us on FamilyLife Today. Ron, didn’t you give a guy or a young lady a tip at Chick-Fil-A® onetime?
Bob: Oh, I remember this story. It’s a great one.
Ron: Yes. It was one of those—I used to have breakfast at Chick-Fil- A with my son and would always order the same thing. This Hispanic lady always waited on us. When we would walk in, she would serve us with a smile. She’d have our breakfast ready. I was walking out of the restaurant one day and I said, “You know, you tip people in restaurants. Why don’t we tip fast-food people?” I couldn’t think of a good reason. So, I reached in my billfold and pulled out a 20. The Lord said, “You cheapskate!” because I had a lot of 20’s in my billfold. [Laughter] So, I folded up five 20’s; and went back in and said, “Can you accept tips?” She said, “Sure!” So, I gave her a hundred dollars.
A week or so later, I was back in. She thanked me for the gift and she said, “You know, when you gave that to me, I needed a new set of tires. So, I was feeling very blessed that you did that.” But she said, “When my daughter got home from high school, I found out there had been an apartment fire and somebody had lost everything in their apartment.” She said, “I thought they needed the $100 worse than I did.”
Ron: So she said, “We gave it to them.” I learned a lot of lessons in that. I thought, “You know, I gave out of my abundance—”
Ron: “She gave out of her poverty.”
Dennis: I think that’s a message for today, frankly—
Ron: Oh, my goodness.
Dennis: —for our generation. I wonder how much truly sacrificial giving occurs, even within the community of faith, which ought to demonstrate sacrificial giving, if anybody should.
Ron Blue, for those who do not know, is the Founder and President of Kingdom Advisors, which is really a ministry of financial planners that are better-equipped to—shall I say—divert God’s money to Kingdom work instead of other endeavors. That’s kind of my definition of what you do. You like it?
Ron: It’s my definition, too! It’s symptomatic of the real thing.
Dennis: He’s all about giving.
Bob: Your staff is working with folks, who have their assets—they are trying to figure out, “What do we do with our money?” You’re trying to help them think through, not just where’s the smartest place to get the best return on investment; but, “What are the value decisions that guide those choices?” —right?
Ron: Yes, I think what I have found is that the key to financial freedom is not an amount of money—ever—it’s a heart attitude and belief. God’s Word speaks to this. The only way, really, to achieve financial freedom is to give. We force our hands open; and then, God has an opportunity to use that money—just like that lady I gave $100 to. I have been ministered to more, by that gift, than I can imagine. I’ve shared that story with a lot of people. Nobody, that I know, that has accumulated wealth, can experience financial freedom, apart from giving.
Dennis: And yet, for a young couple, starting out their marriage, who may have started their family in the midst of a lot of debt—
Dennis: —and not having the advantage of the perspective you are talking about— where they’ve talked about an overall game plan for their money—how they are going to approach debt? How they’re going to approach savings? You really talk about this in your book, Surviving Financial Meltdown. This is really where couples are today, though. Where should they start? What’s the beginning point?
Ron: Well, I know that you know my message is that there are four biblical principles: spend less than you earn, avoid the use of debt, save for the long-term and the unexpected, and set long-term goals.
That was testimony that I gave to a congressional sub-committee, back in the early 90’s. Senator Dodd was the one that asked me the question. I gave him that answer; and he said to me, “It seems like that would work in any income level.” I said, “You’re right, Senator, including the United States Government.”
Ron: Because this is what typically happens: The interviewer will say, “How would you avoid this?” I’d say, “Well, spend less than you earn, avoid the use of debt—and so forth.” He’d say, “Yes, yes; but I didn’t do that. Now what do I do?”
Well, spend less than you earn. You’ve got to get on a budget. You’ve got to get out of debt. You’ve got to set some savings aside, and you’ve got to set some long-term goals; and I would say, “Increase your giving.” The principles don’t change. So, just because I’m in financial difficulty, doesn’t mean that there are different principles. They’re the same principles to avoid the problems, to get out of the problems, and when I have a surplus, or when I have a deficit—those are the four biblical principles.
Dennis: When do you tell a couple to cut up their credit cards? If they are in debt, starting out their family, at what point should they pull out a pair of shears or scissors and cut them and whack them in half?
Ron: Right now! I mean, if they are in debt trouble. Incidentally, though, credit cards never got anybody into problems. It’s the person holding the credit card that got into problems.
Ron: I look at credit card debt as symptomatic. It’s symptomatic of a violation of a biblical principle someplace. For example, it may be greed, “I want something that I really can’t afford.” It may be poor communication between a husband and a wife, “I’ll show him!” or, “I’ll show her!” It may be fear—fear of the economy or whatever—and, “I feel better when I spend.” Debt is just symptomatic of something else that is going on, which is why FamilyLife ministry is such a critical ministry because you are dealing with husband and wife communication, at its very core. I found that, generally, that’s why people are in trouble.
Dennis: Generally, we are trying to practice what we are preaching to the couples. FamilyLife doesn’t have any debt.
Dennis: We pay our bills off as they become due.
Bob: And if we don’t have the money, we don’t go out and spend it.
Dennis: Yes. So—a young couple like we are talking about here—where would you encourage them to look at cutting expenses? It seems like this whole culture is an entitlement generation—where we feel like we deserve all the electronic media, we deserve all the access to all the fun and games. It’s difficult to know where to start to cut.
Ron: Well, you know Judy and I took a look at our budget. We said, “Is there any place we can cut? Do we need all this telephone service?” We looked at our cell phones. We looked at cable TV: “Do we really need what we are buying on cable TV?” We cut that. We cut our clothes budget; we cut our eating-out budget. We cut our vacation and entertainment budget.
These were all nice things; but they were really discretionary, when you got down to it. We cut our budget 25 percent, which means that we were overspending probably 25 percent, at least, before we started cutting.
Bob: That’s a good exercise for a couple to do.
Bob: Once a year, just stop and ask the question, “Are we using this? Do we need this?” It’s easy for that stuff to just kind of creep in and become a part of your monthly expenses, without any scrutiny going on.
Ron: You get sloppy on it. With credit cards, it’s so easy to buy things. Earlier on, in my career professionally, I counseled people to pay cash because it makes a lot of difference. When you put out $30 or $40 for gasoline, for example, you think a little differently when you turn on the air-conditioning, when you drive, and so forth—
Bob: Rather than just swiping the card.
Ron: —just rather than swiping the card. And pay cash when you eat out. Pay cash at the grocery store. Now, that sounds impractical in today’s credit card society; and I think you need to do that until you establish some boundaries.
Ron: That’s a good thing to practice.
Dennis: I think of the book of Ecclesiastes—here was Solomon who said he liked a vineyard. So, he went and bought it. He liked a palace, so he got a palace. He liked horses, so he got a whole stable-full. He accumulated more wealth than any person who’d ever lived before him.
I think this culture—that is full of advertisements—always trying to convince us that what we have is not enough, and that we need these services, this entertainment, or this possession—I can be gullible. It’s amazing how, in my mind, I can be walking down an aisle and say, “You know, I’d like to have that!” [Laughter] You know, “I can justify that.”
Ron: That’s right.
Dennis: Then, you can always find someone to compare yourself to who has it.
[Laughter] I’m just amazed at my rational thinking on this thing; and before long, if I’m impulsive and not disciplined, I’ll go get it. Then, I’ll regret it.
Dennis: Especially, if it’s paid for with a credit card—which I pay off, of course—but, nonetheless, the impulsive purchase can easily be made, at that point.
Bob: Let me ask you, though. There are some folks, Ron, who would look at what you are recommending and say, “If Americans did what Ron Blue wants us to do, you want to talk about an economic meltdown? Our whole economic system is built on Dennis getting out the credit card, buying what he wants.”
Bob: “This is how we have what we have in this country. If we go to the four biblical principles Ron Blue is suggesting, we’re going to be in a world of hurt.”
Ron: Absolutely—that is true. If we went to a saving- and investing-economy, eventually, we’d be better off; but it would take a long time to get there. There would be a lot of pain in getting there.
I tell people this: “I know that most of the people that hear me or read my books are not going to practice those four principles; but enough are, that they are then prepared for any type of meltdown or any type of adversity.” You don’t know when you are going to lose your job. If you have three- to six-months in your savings, and you have no debt, other than maybe a mortgage, you are as prepared as you can possibly be. That is a good position to be in.
I would rather be on the lending-side than the borrowing-side. If I overspend a $1,000 a year, that’s $40,000, over a working life—ages 25 to 65. The lender—if he makes 12 percent on that $1,000 a year—has made a million dollars off of me. If I take a $2,000 credit card bill and pay the minimum payments—a $2,000 credit card bill is not that much—it will take me 32 years to pay it off. I will have paid $10,000 back—$8,000, in interest, in order to borrow $2,000. See, that just rationally doesn’t make any sense.
So, yes, our economy might collapse; but I’d rather be on that side—of running my life according to biblical principles—because I will have done all that I can to provide for myself and my family.
Bob: I think it is Proverbs 6 where it talks about the ant and how the ant is doing what Ron Blue says an ant ought to do. He’s making sure that there is some set aside, and he’s being prudent. He’s being thoughtful. You’re saying, “If we all became ants, we’d have some hardship for a while; and then, things would work out.” The reality is, “We aren’t all going to become ants;” are we?
Ron: No, and the reason is that we live in a world that’s fallen. There is a sin nature, out there. I’ve read the book of Revelation. It’s not a pretty sight until you get to Revelation 21 and 22. So, I know the end of the story; and I think what Jesus said to the church at Laodicea—He said, “You know, you think you are rich; and you’re not. You think you see, and you’re not.”
Then He says, “Behold I stand at the door and knock; and if any man hears my voice and opens the door, I will come in to him and dine with him.” We use it as an evangelistic verse, which is appropriate; but it’s really written to Christians. Jesus is saying, “I’m all you need. None of this other stuff is going to provide anything you are looking for—contentment, joy, peace, any security—none of that comes from your possessions.”
Dennis: So, if you were sitting down with a young couple, who were just starting out, as we talked about here, what would be your advice to them, other than very clearly, “Stay out of debt, and don’t get in over your head, and avoid consumer debt like the plague.” Where else would you suggest that they focus their efforts, as they begin their marriage and family?
Ron: I would say that they should be living off of a—we call it a budget—I’ll call it a spending plan. They should plan their expenses before they spend them. So, that if they have $1,000 for a vacation in their budget—spending plan—they are free to spend the $1,000. They don’t have to feel guilty about that, and they’ve planned for it.”
So, they should have a budget. They should be saving money—a little bit, anyway, out of money that comes in—so that they have some margin for error—the car repair, the medical expense, the accident, whatever it may be—they have some money set aside. If they have a budget, and if they are committed to paying off their credit cards, every month, on-time, and if they are saving some, they are doing all that they can do; and they are doing it well.
Dennis: I started today out by sending I Timothy, Chapter 6, verse 6 through verse 10, to a friend. It’s all about not falling in love with money, but pursuing godliness and being content. I think that’s a hard choice for all of us to make on an ongoing basis; but it really is good to revisit the Scripture, frequently, to find out, “What does the Bible have to say about money, about pursuing wealth and riches?”
There are a lot of cautions in the Bible about this, and I think we need to pay heed to that. There are also some great authors, like Ron Blue, and his book, Surviving Financial Meltdown, that can also help us in making good decisions in an economic crisis.
Bob: That may be a personal challenge—that you are facing in your family. It may be that the economy, over the last four or five years, has impacted your marriage and your family. You’ve had to make adjustments— significant adjustments—and you’ve needed some counsel. On our website, at FamilyLifeToday.com, we’ve put a number of resources there that are designed to help folks work their way through financial challenges—whether you’re starting out in your marriage, whether it’s an adjustment you have to make in the middle years, wherever you are—this kind of biblical counsel can get you pointed in the right direction.
I’d just encourage you to go to FamilyLifeToday.com and review the resources we have there, including a book that Ron has written called Surviving Financial Meltdown. There is a Homebuilders® study that he wrote for us called Mastering Money in Your Marriage and other resources that are available. Again, the website is FamilyLifeToday.com—FamilyLifeToday.com; or call 1-800-FL-TODAY if you have any questions about the resources we have, or if you need to place an order. Again, the toll-free number is 1-800-FL-TODAY.
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Or if you’d like to write a check and mail it to us: Address it to FamilyLife Today at Box 7111, Little Rock, AR. Our zip code is 72223. That’s P.O. Box 7111, Little Rock, AR, 72223. As long as it’s postmarked by midnight tonight, that donation will not only count as a tax deduction for the year 2012 for you, but it will also apply to our ability to take advantage of the matching-gift fund. Let me again say, “Thanks,” in advance, for whatever you are able to do in support of the ministry. We appreciate your partnership with us, and we look forward to a great 2013 together.
Now, tomorrow, Ron Blue is going to be back with us. We’re going to start off the new year by continuing our conversation about getting our financial houses in order. I hope you can tune in for that.
I want to thank our engineer today, Keith Lynch, and our entire broadcast production team. On behalf of our host, Dennis Rainey, I'm Bob Lepine. We will see you back next time for another edition of FamilyLife Today.
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