Before my wife and I married, I read a book by the late Larry Burkett called “The Complete Financial Guide for Young Couples” . Burkett, who was a popular Evangelical financial adviser, recommends a very old-fashioned financial plan for couples just starting off in life: spend less than you make. We followed the advice of the book (we even did the “envelope system” in which you have different envelopes of cash for each category of spending) and it was one of the best decisions we ever made. Even the wise sages at Saturday Night Live realize the wisdom of this advice:
I thought of Burkett’s book while reading this article in the Atlantic about Dave Ramsey, who appears to be an up-to-date version of Burkett. Ramsey travels around the country preaching the “no-debt” gospel, and his work has moved beyond Evangelical circles, as can be seen in this profile in the Atlantic:
There was, of course, a great deal of talk about money, and what to do with it. But the format was more tent revival than accounting seminar, with the first 90 minutes or so mostly devoted to Ramsey’s personal story of ruin and redemption. We heard how, during the second half of the 1980s, a young Ramsey built up a multimillion-dollar real-estate empire—then lost it all as the bank got nervous and called his loans, ultimately forcing him and his wife into bankruptcy. How, searching for help in his hour of need, he turned to the Bible and discovered Proverbs 22:7: “The rich rule over the poor, and the borrower is slave of the lender.” At that moment, he told an audience so hushed that we could hear the ice squeak, Ramsey decided to never borrow another dollar again…
Ramsey offers some investment advice (much of which would have struck horror in my business-school professors), but for most of his followers, the main attraction is a simple program: give 10 percent of your income to charity, save 15 percent for retirement, build up a sizable emergency stash and a college fund for your kids, and above all, stop borrowing money. Ramsey devotees pay cash for everything they can. They are allowed only one exception to the no-more-debt rule: a 15-year fixed-rate mortgage. He is so serious about shunning debt that his Web site takes only debit cards; try to pay with a Capital One Visa, and the system rejects the card, then tut-tuts at you. These simple, austere, unbreakable rules are, as Ramsey likes to say, “the advice that God and Grandma gave you.”…
When you pay for something with a credit card, or even a debit card, you can easily spend a few extra dollars here and there. But as Ramsey explained—while waving a handful of hundred-dollar bills to illustrate the point—if you have to actually hand over some of your dwindling cash supply, you tend to ponder every purchase. That impulsive latte buy becomes a little less enjoyable when every time you haul out your wallet, a quavering voice inside your head asks, “You want to send Uncle Abe away?” And sure enough, though we thought we’d budgeted conservatively for just the necessities, we nonetheless finished the month with extra money in every envelope.
It’s also hard to spend cash, because so many people look at you funny when you try. The very first day, I spent almost 20 minutes trying to check out in the “better dresses” section of a department store. The saleslady stared at the hundred-dollar bill in her palm as if I’d just handed her an eel. After a series of plaintive looks at my obviously card-free wallet, she started stabbing at the cash-register keyboard with a sort of bleak despair. To my immense surprise and relief—and clearly, also to hers—the cash drawer eventually opened.
And then the “money line”:
Ramsey calls this “being weird.” The phrase came up over and over again in his five-hour spiel, always punctuated with the same rejoinder: “Normal is broke.”
Be sure to read the entire article. I have often been scandalized by the fact that Christians seem to live no differently than the rest of society when it comes to money (as well as just about everything else). We have a responsibility to be, well, responsible with our money. Can you imagine the parable of the talents told today? “I know you gave me 10 talents, Lord, but I leveraged that into 100 talents so I could buy a nice house and a vacation to Disneyworld for the kids. But then the bank called my loan and so now I’m in the hole. Could I borrow another 100 talents?”
By living within our means we are also evangelizing: we are showing people by our actions that accumulating “stuff” isn’t the most important thing in life, that there is something out there that fulfills us unlike the temporary fulfillment we get when we buy something. Hopefully Mr. Ramsey’s work will increase our awareness of this fact.