My office is full of great people; each of my coworkers is talented, driven, and fun to work alongside. We get a sizable amount of work done around here, but not without a good office prank and a viewing of the latest YouTube video referenced in conversation, often at the suggestion of Justin Wade. With his quick wit, encouraging spirit, and general well-read wisdom on life, Justin is someone you want in your network.
We sat down and talked about how to combat discouragement in managing finances and what stewarding money wisely looks like at various stages of life.
Deanna: How do you find HOPE in finances? That seems to be the place people find immense trouble in their personal lives, marriages, and general happiness in life.
Justin: Hopelessness with money is the general state of America. It’s very simply stated: people spend more than they make. For people that don’t spend more than they make, they spend right down to the limit. They don’t have any margin and that creates a lot of stress.
Imagine reading a sheet of paper that had no margin on it with words crammed all the way to the outside. It would be overwhelming. That’s how people tend to do finances. If you do that for one month, okay. You do that another month, months turn into years, years into several years, then the next thing you know, you are in a real bind. That gives the illusion that you can’t dig out of that hole.
The hope is that you actually can spend less than you make. You can figure out a way to spend less to create margin; margin, in turn, creates some level of peace.
You can figure out a way to spend less to create margin;Justin Wade
margin, in turn, creates peace.
We are told that the solution to our problems is buying more stuff. The most marketed item in America is debt: “sign up for the credit card. Get the airline miles. Put your furniture and your car on a finance program.” It’s about spending more money than you can afford to spend. The hope is that you can start digging out of it, but it starts with spending less than you make.
Deanna: What’s your advice for people starting out in the workforce? A lot of people have student loans as soon as they start living life after college.
Justin: I would say that debt by and large should be attacked fast, rather than paying minimum payments for a really long time. If you can get really focused for 2 or 3 years, you can get away from some of the debt. Most people are not up for that because they want the 10-day vacation to the beach, and sometimes that vacation can add up to the total amount paid all year toward debts.
If you are in debt, the first thing to do is to stop getting further into debt. A lot of people say, “well, I already have student loan debt and I can’t change that, but I’d like to buy a new car.” I would suggest that they take the money they want to spend on a new car and put it toward student loans and try to get that knocked out.
The second thing I suggest is putting 15% of income towards long-term savings. It’s like Bulls Gas Law: “gas expands to fill the void.” Everything else tends to do the same, including money; if you get paid a thousand bucks, most people are going to spend a thousand bucks. If you can get a paycheck for $900 instead of $1000 because $100 already got invested somewhere, you will figure out how to live on $900.
Another option is saving or investing your pay raise. Instead of spending $5000 a year more, put that toward your debt or your investment, and you don’t have to change your lifestyle at all. If you can start at age 20 or 25 or 30 to put back $200 or $300 per month by the time you retire, you are literally talking about a couple of million bucks saved up.
D: So there is definitely hope for people who have gone to college and have debt. You can start now.
J: Absolutely. Start small. Get on a written budget.
D: That’s been life-changing for my husband and I in just month one. It’s been so good to get a hold of.
J: A written budget is oftentimes freeing! You actually can go out to eat, but you probably can’t go out five nights a week.
D: Right. Why would you need to, anyway?
J: Yeah, you don’t need to. That’s my big thing. Get on a written budget and then say, “all I can do right now is fifty bucks a month toward long-term savings.” Great! Do that! Then you can work like crazy to get to save $100, $150, $200. You will get there, but start somewhere.
D: So what do you say to the person that is age forty-five or fifty-five, asking, “Is there any hope for my financial situation now?” They bought the new car and bigger house and they have whatever payments they have. Maybe their kids are going to college and they are looking at their finances and going, “this is still really stressful at my age. Is there hope for me to be at peace with money?”
J: I think there is always peace to be found. Money was actually talked about more in Jesus’ parables than anything else. I find that interesting because I believe he was talking about things that people were concerned about back then. It is refreshing to realize we are not the first ones with this problem. People have been struggling with things of this nature for a long, long time.
Money was actually talked about more in Jesus’ parables than anything else. I find that interesting because I believe He was talking about things that people were concerned about back then.Justin Wade
There’s always a chance to turn around and do things differently. Oftentimes, older people’s income levels allow them to stash away more money faster. Prioritize things and start asking, “what is important? Are there some of these debts that I need to pay off really quick?”
There’s this harsh reality that I have heard Dave Ramsey share – Christmas is not an emergency. College is not an emergency. Things like that are coming up, so start planning ahead. Use some of that margin, start paying things off, and get things squared away.
I also encourage that you sit down and figure out what a retirement plan looks like for you. What do you want to accomplish in retirement? Sit down with a financial planner and say, “here’s where I am. What should I expect to get from Social Security? How much more do I need?” Then you can work backwards, plan on retiring at sixty-five, and you realize you have a number of years to work on that. It’s about a lifestyle that you are hoping to have.
D: Like you said, prioritize.
J: Prioritize! I would just say that joy has a lot to do with having margin. I would say that no matter where you are, age twenty, forty, or fifty five, start right now. Start today and stop putting it off. Start doing it.
D: So, how do we shift our perspective away from the pull to amass a giant hoard of money for fun? The nice car, the cool vacation, the festival trip, you know. Why should we shift our perspective to stewardship, living under our means, and paring down?
J: Well, the cultural idea is “you can’t take it with you, so live it up and spend money.” It’s wiser to make some cuts now so you can live a phenomenal life in the future, versus living it up now and paying for it in the future. People that have been more conservative and had a little more margin in their lives up front now have extra money to play with and enjoy and do things. They are not playing the catch up game!
It’s wiser to make some cuts now so you can live a phenomenal life in the future, versus living it up now and paying for it in the future.Justin Wade
When you bring in the word “steward”, here’s what comes to my mind: you are managing something that is someone else’s. You’re managing Somebody else’s money. Christians believe that what we have is not ours; it’s God’s and He has asked us to manage it. That changes our perspective from wanting to live a self-indulgent life and spending more than we bring in, because we are not spending our money. I think that is a hard concept, but I think that’s a really important concept to understand.
D: Money is in the front of everyone’s mind. From a Christian perspective, the question is, “how can I let God be my master instead of money?” For non-Christians, I think the question is, “how can I live a full life, instead of just paying for things?” The idea of not allowing money to control you is across the board.
Money shouldn’t be something that you have to think about all of the time. If you can manage it well and you can live under your means, then you become more peaceful, more joyful, and life doesn’t become so revolved around money.
J: Oh yeah. You’re spot on there. You can get to the point where you are stretched to the absolute max. It makes people unhappy at their jobs, in parenting, in husband and wife relationships. Living like that from a financial standpoint is terrible. I have been there. I have been one flat tire away from being broke, thinking “I’m stuck. What am I going to do if there is an emergency?” That’s just a terrible place to be.
Christians believe that what we have is not ours;Justin Wade
it’s God’s and He has asked us to manage it.
That changes our perspective from wanting to live a self-indulgent life and spending more than we bring in, because we are
not spending our money.
D: Were you always good with money? When did you start feeling like you were more in control of it?
J: If in any way this makes it sound like I feel I am a money expert, that’s not the case. Several years ago I did a Crown Financial class, and as a family, we did a little better with our money, but we slipped back into not doing super well with it. A few years ago, I started reading a lot on finances and tried to get different perspectives on the topic. Then, my wife Ashley and I got on the same page with finances. That changes everything. We started choosing what lined up with our values and our convictions and going that direction.
I started studying a lot about the Biblical understanding of money and managing money. Maybe God gave us money so we can be generous. That really shifted the way we thought to “how can we be a blessing to others with finances?” Why did God give us what little we have, and how should we use it to honor God?
Andy Stanley wrote a book years ago that boils everything down to one question: what is the wise thing to do? Based on my past, based on my current situation, based on my future hopes and dreams, what is the wise thing to do? My wife leads the children’s ministry at our church, and I took notes on the lesson she shared about being wise, I realized this is the most brilliant thing I have ever heard. She defined being wise as this: knowing the right thing to do and doing it. With our money, often times we know the right thing to do. We just don’t do it. We ask, “what feels good right now?” But we should ask, “what is wisdom?” It’s knowing the right thing to do and doing it.
With our money, often times we know the right thing to do.Justin Wade
We just don’t do it. We ask, “what feels good right now?”
But we should ask, “what is wisdom?”
It’s knowing the right thing to do and doing it.