Welcome back to the End Average Fundamentals series! If you are new to this, please begin reading the series from the beginning by clicking HERE. Although the messages work on their own, there will be more context for you if you follow them in sequence. Make sure you’re signed up for the newsletter and I’ll send these directly to you so that you never miss a new post. You can sign up right on the EndAverage.com homepage. Now let’s get right to it.
We’ve got a big problem…
Today we’re going to cover one of my favorite topics: financial freedom. Financial freedom is also one of the most difficult things to discuss with people because of how subjective and personal it is. In our culture we have a rough time discussing our personal money matters with each other because everyone feels like they understand it. Unfortunately, feelings and emotions are the biggest pitfalls there are when it comes to finances. The math either works, or it doesn’t. It’s that simple. Financial literacy is at an all-time low both in personal finances and in political circles. This downward spiral caused by the blind leading the blind has gotten a lot of people into a pretty desperate predicament. Entitlement, instant gratification, frivolous credit abuse, and an almost non-existent sense of urgency when planning for the future are all plagues that us millennials have caught and spread.
Woah, ok – take a deep breath because it’s not all doom and gloom! This post is about the real changes that we should pursue in our own lives to end average finances. You know the best part? None of this information is new or complicated! The principals we’re going to talk about are all straight out of the Bible, this is ancient wisdom that used to be handed down from generation to generation. That game of telephone has caused misinformation and corruption to become the norm. Let’s dust these concepts off and see how we can apply them in our own lives.
On your marks
Get out of debt forever!
Well, in the last post we discussed getting out of debt being the absolute first step. Do it. Do it because if you’re living paycheck to paycheck or going deeper into debt it doesn’t matter how much head knowledge you have, you’ll always be under someone else’s thumb. Being in debt puts you into a submissive relationship with others, this takes away a piece of your freedom. Proverbs 22:7 tells us that we become slaves to the lender. Financial freedom and slavery don’t mix. I’ll stop beating this horse, but if you’re struggling with debt I advise you to seek help and accountability from someone you trust (not your broke uncle). Find Dave Ramsey‘s Financial Peace University course at a local church, or look into Crown Financial Ministries. Both are stellar resources that will give you the practical tools you need to take ownership of your finances. Don’t wait to do this.
Want to know my story with debt? I can tell you with absolute conviction that getting out of debt is a game changer. When I changed careers after the Army, my wife and I looked around and saw what other people making “big boy money” were living like and we decided to catch up to the “Joneses” by using debt. I spent five years digging our finances out of a $37,000 hole we’d dug ourselves into with car loans and credit cards. Debt immediately suffocated us. It caused fights and barriers between my wife and I. It made tithing painful. Debt had us by the throat, and once we finally got fed up, we agreed to charge the financial freedom hill full-force. Deciding to do this gave us a new goal, something we could pursue together. While getting out of debt we had two more kids, I was in a full-time master’s degree program on top of full-time work, and we still kept healthy food on the table. It took sacrifice and grit. I don’t want to hear your excuses, I’ve used them all and they don’t work.
Create financial margin
Margin is crucial – if you don’t have money left over after your expenses are paid then you can’t shift from paycheck-to-paycheck into growth. Getting out of debt makes it so that you can find that margin again. Your options to create margin are simple: you either decrease your expenses, or you increase your income. Both take effort and if you can do both then you’re really cooking with gas! It used to be that every time I got a raise I would increase my quality of life. You know, get the bigger car because I can afford the payment now, upgrade to the higher cable package, budget less and eat out more… you know exactly what I’m talking about. By upgrading my life every time I had a little extra money I was keeping us tied to the starting line of the financial freedom race. I never felt satisfied with the things we already had. We were never without, but I still sought stuff to upgrade our quality of life. I had no contentment or gratitude. I broke the rules by coveting what others had, and it bit me in the end.
The key to achieving change in my own life was to work on my contentment. Being satisfied with what we are currently blessed with allowed me to turn the raises into more fuel for giving and saving.
The practical way I work on my shortage of contentment is to begin my day with thoughtful gratitude. I journal three things I’m grateful for and I begin my day by thanking God in prayer. Acknowledging the blessing we’ve been given really helps set the tone for the rest of the day. It puts things into perspective. All of the sudden it becomes a lot easier to say “you know, we do have an awesome x, y, and z. Let’s make due with what we’ve got”. Contentment, ladies and gentlemen, is the birth place of margin. This is the fuel for long term success in finances.
Make a plan
Remember how the majority of people aren’t financially literate? Statistically speaking that means that YOU probably fall into that category. Sorry for the gut-check, but it must be said. To add insult to injury I’ll mention that pride and shame are probably keeping you from seeking the financial advice you need in order to start making a plan that will allow you to retire with dignity, be able to fund your kids’ college and weddings, and achieve any other financial goals you have. Blindly putting away money into your work 401k is an ok place to start, but learning how to reach your potential and really lean into compound interest is going to take some learning. You’d be amazed how powerful just a few tweaks to your 401k can be when you look at long-term performance.
I like to think of financial planning like this: someone can give you a very good set of directions to go from point A to point B in a city you don’t know. But if you veer from those directions or fall off course you could end up lost somewhere very different than where you intended to go. Educating yourself and seeking professional help is just as if you spent time with a guide, learning that city inside and out, if you fall off course or hit a roadblock then you have all the knowledge you need to divert. You will most likely find an even better place to set as your final destination! While that is a simplistic view of financial savvy, the comparison should let you see that there should be no shame in taking the time and spending the energy to get to know that city a little more. Find the podcasts, read a book on investment, find a good financial planner. Your financial planner will be able to help clear up those timelines and help you make a plan that will put the margin you created to good use. They are your tour guide into the new city and as you become more familiar with that city you will get more comfortable navigating it.
Figure out what that financial number needs to be for you and make a plan right now, because every day of inactivity literally costs you money. The ticking clock is a double edged sword that can allow compound interest and diligence to pay you big time, but it can also be the devastating reality check when you look up at retirement age and realize you don’t have the financial backing to live out your dream. Unless you own your house flat out and don’t owe anyone money, there’s a fat chance that social security will be enough for you to thrive on. Saving is on you and you alone – there’s nobody out there that will do this for you.
I’m going to open the hatch and drop a truth bomb on you. Ready? Here it comes: you don’t know everything about finances, and that’s ok. Seek the knowledge and the advice that you need so that you can make a wise financial plan.
Proverbs 15:22 encourages us to seek council from a “multitude” of counselors. Luckily for us we’ve got oodles of free information available that’s just a few clicks away. Reading a variety of sources on the topics of retirement saving and investing will let you spot the good advice from the bad more easily as you learn. Seek mentorship and council from professionals who aren’t trying to just push a life insurance policy onto you. Advice needs to be explained and you should only do things that you fully understand. If you surround yourself with sound council and advisors, you will soon find that saving and investing is nowhere near as complicated as some make it out to be.
The specific tools I use to save are a Roth IRA and a Roth 401k for my retirement, my financial advisor manages my kids’ college accounts and life-launch funds, and we have regular savings accounts that hold our emergency funds. That’s it. Once these were set in place all we had to do was to figure out what we needed those accounts to be at in X amount of time so that we knew how much we need to put away each month until then. We have term-life insurance in case I die while my family still needs the income, and we’re paying off our house as fast as we can. Stir in diligence over time, a dash of compound interest, and tadaa!! You’ve got a financial plan! Remember that every situation is different so you shouldn’t try to cookie-cutter my plan without seeking advice or at least researching the different savings tools available to you.
Execute your plan – develop grit
Gratitude, generosity, wisdom, and grit all have one key thing in common: they all take practice and they all grow when you use them. That’s right, just like a muscle. It’s not easy to get started, but once you start to build momentum and you’ve consistently done the right thing over time, you will find that those traits gradually become your new normal. Doing a budget every month goes from being a tedious task into a liberating self-check because it reminds you that you’re on the right track. Developing grit takes keeping the long-term goal in mind, motivating you to do the right thing in the day-to-day decision points. If you need an accountability partner while you learn to budget, tithe, and save, then go get one.
You are used to doing things a certain way and change takes time, but if you stick to it you will get to a point where you can’t imagine NOT saving and giving. Ask me how I know. Also, feel free to ask me if my wife and I lose sleep or fight over money problems. Spoiler alert- we don’t. We have a plan and we’re on track to make that plan succeed. We are able to be generous and we get to tithe. We’ve developed savings and we have insurance in place in case we lose my income. These peace-giving nets took a lot of advice seeking and learning, and they took a long time to build. But having grit and sticking to our plan has freed us up to enjoy the present, knowing that as far as we can control it, our financial future is going to be fine. It’s liberating. As a Christian I want to glorify God by following His guidance with every blessing He’s given us, including my time, talent, and money. Taking care of my family and not worrying about money allows me the peace to use my time more wisely. What good would I be to the kingdom of God if I had to work extra hours so that I could afford a nicer car? Proverbs 13:22 reminds us that “A good man leaves an inheritance to his children’s children“. I think that means that on top of leaving a financial inheritance we should be handing down our faith, wisdom, work ethic, and character. Those are worth a whole lot more than cash.
I tell you all of this to show you that you really can go from critical amounts of debt to financial freedom. At times, especially at the beginning, this transformation felt impossible. But it is absolutely possible, and it is so worth pursuing. Wringing your hands over the cost difference of menu items at a restaurant get replaced with figuring out how much you can give away that month! Just imagine that. You can do that.
Financial freedom defined
Financial freedom means having the ability to live generously with your time and money because you’re working a wise financial plan. You’ve become comfortable being uncomfortable when you need to make short-term sacrifices so that you can be free long-term. You’re willing to learn when you don’t know something and you can make the best choices possible with the information you have. You accept that you can’t control everything, but you plan for the things that you can control. You are grateful to God for blessing you, and you seek to advance His kingdom every day by stewarding the blessings you have. You practice what you preach and you embrace the role of mentor and teacher, when appropriate, so that you can break the societal trends that entrap those around you. Financial freedom is not a financial number, it is a set of habits and mentalities that you maintain and grow over the course of your whole life.
It’s going to be hard at first, but ending average finances is absolutely worth it. It impacts every area of your spiritual and physical life in positive ways.
Let’s end average together.