Current Affairs

Life After Debt

Americans borrowed less for an 11th consecutive month in December, paying off credit cards while increasing borrowing for cars and other products. link

This is great news. For 11 months in 2009 the American people not only covered their bills, but they paid down debt. The irony of that is clear. 2009 was a horrible year financially for a lot of people.

This next line in the USA Today article clears up why the stock market tumbled on this news.

The mixed picture raises hopes that Americans may soon return to spending, a necessary condition for economic recovery. link

Our national economy, jobs in America, and some would tell you the future our our nation itself… depends on you and I going deeper and deeper into debt to buy stuff we don’t need with money we don’t have. Cute, eh?

Maybe we should all collectively just hold on to our money for another 11 months and enjoy this recession a little more so we can all get out of debt?

Think about it like this. In the worst economic year in decades and we collectively covered our monthly bills and paid down our debts for 11 straight months. This is great news! And it also reveals that debt is a head issue and not always a money issue.

I know for our family 2009 was a hard year. We had to wrestle through stuff we didn’t like to wrestle through. But the flip side is that we are way better off financially for it. Less debt, more savings, and an attitude of frugality we hope lasts a lifetime.

Church Leadership

3 Positive Effects of Recession on the Church


Nearly every day I encounter someone who tells me their churches budget was cut, people at their church are about to lose their jobs, or otherwise their church is encountering hard financial times.

That’s not purely a bad thing. Here are three positive things that a lack of money bring to a church.

1. A gut check for the staff. If you’ve worked in a church you know that there are people who are on staff because they are absolutely convinced God wants them there and there are people who are there because its a job. When budgets get slashed, programs get cut, and necessary and unnecessary stuff gets trimmed to cut costs… each staff member has to examine herself and ask, “Why am I here? Do I really want to be here?” Some will double down their efforts and some will check out. Both are positive for the church going forward.

2. A gut church for the parishoners. Along the same lines the people who attend the church have to face the same choice. When their beloved program is dismantled because of a lack of funding they have to ask themselves, “Am I here for that program, or am I here because this is where God wants me?” When they see a staff member lose benefits or their job or even their house, they re-examine their financial priorites automatically. “Am I being faithful to God with my money? Am I being a good steward of what I earn?” This is a positive outcome!

3. A gut check for the dreamers. I can’t help but think of the mid-2000’s boom in church growth. With the last coughs of the Field of Dreams model [If you build it, they will come… and give!] of church growth, congregations built massive additions, added satellite campuses, and even reached out to buy up struggling churches. For the most part this was done during good times and using credit. Now those churches see double digit decreases in giving and are stuck in a catch-22 scenario. Admit they were wrong to buy on credit and sell property or trim programs and staff to try to ride out the dip. This is a positive outcome for the church, even if it means they go bankrupt. The healthy and faithful congregations will make it. The ones who depended on their own talents will fail.

A bonus positive: A side effect of the extended recession is that I am seeing a massive wave of volunteerism in the church. As churches trim their budgets and people in the pews realize that they need to step up, the church as a whole is seeing an increase in volunteers in key church leadership positions.

hmm... thoughts

What’s Good About the Recession?

Our culture is inundated with the negative news of the recession. News outlets struggle to find fresh ways to accurately describe the words “the economy sucks” each hour of the day.

The church has followed right along with the negative news. A lot of blogs have cited a report that church participation is on a steep decline. Of course, people won’t admit that there is a tie between the recession and people leaving the church. Perhaps churches should have responded to help sooner? That’s another rant for another day.

Here are three good things the recession has done for my family:

A huge emphasis to live in the black. As I’ve documented before, we are working hard to get out of debt and build a little savings.

– A huge emphasis on what is important. Tough times lead people back to their roots and we are no different. A major focus for us has been on “cheap family fun.” We’ve kept the value of family time but re-tooled it to focus on the time and not the activity. There are lots of other areas where we are making values-based decisions as opposed to having little rhyme or reason as to why we do things.

– A huge emphasis on sustainability. Scaling things back and focusing just a tad more on thrift allows us to live within a sustainable budget. While we can’t predict the future (no one can) we can manage our house in a way that would allow us to sustain in thin times and thrive in good times.

I think these three things… live in the black, focus on your values, and practice sustainability are three things that every family, church, business, and institution should be learning during this recession. Without a doubt, these are tough times. But there is great good to come from it if we’ll learn hard lessons and apply them in the future!

Those who are hit hardest by this economy should resolve a “never again” attitude. We all made fun of our grandparents for saving everything and compulsive frugality. Who is laughing now?


Buyers market vs. Sellers market

Yesterday was a bit of a shock to the system. It’s not until you leave the Detroit area that you see just how different it is from SoCal. In many ways, the area seems oblivious to the deep recession (I’d call it borderline depression. If not economically, definitely on the psyche of the area.) 

Walking through store is funny. While I’m certain that there are many people on the bottom of the socio-economic ladder, the stores don’t seem to notice. Next time you’re in Target on 26 Mile notice the posture of shoppers. It’ll indicate the confidence level in spending money.

Clearly the housing market is polar opposite. You wouldn’t believe the sales pitch this lady tried to give us on an apartment last night. Not only was the apartment sub-par (worn out, horrible location for a family) when we were done she just said, “We’ll wave the application fee if you give me $100 to hold the place. But we can’t get you in until August 25th.” That’s the hook for spending $2000/month in San Diego? We weren’t impressed.

The general pitch I’ve gotten from renting a house (as opposed to renting an apartment in a complex) is “this house would sell for $500,000 so we don’t think what we’re charing for rent is a lot. Never mind the fact that the person has owned the property for years and probably bought it for under $200,000. For us… this is like Michigan pre-bubble when there is a massive difference between what a place is worth and what the market will sustain. 

We know this is how it is here. We’re not in denial. And I’ll even admit that it’s a little refreshing. It’s fun to not hear every newscast or front page story be about the economy or gas prices. In some respects I understand the “Nation of Whiners” comment. I think most of what we’re feeling is that millions of people have to bite the bullet and start paying down their personal debts. Having less personal debt automatically makes you a more aggressive shopper. 

More housing stuff later today. We’re pretty excited about the next one we’re looking at. 

Romeo News

How are you doing?

The most basic of questions now has a new meaning. At least where I live. You ask a shop keeper it and he asks you. Same with neighbors, teachers, folks at church, bank tellers, waitresses, and pretty much everyone I come into contact around town.

How are you doing?” It’s a basic, friendly question with a new double meaning. Meat and potatoes midwest meets Wall Street. 

People are really asking if you are making it. “How are you doing?” means, is your business doing OK? Is your restaurant or corner store going to survive the economic down turn? Will you keep your house? Will your kids get to go to college? Will you get laid off? Have you found work? Will your marriage survive? Do you have anything to do with the auto industry?

Some people call this a recession. I think that’s a polite thing to say as a depressed Michigan looks for a new industry. The future is bright for our state as soon as we forget about the past and look toward the future. I truly believe that out of this terrible time will come the next great innovation the planet needs. Michigan will not be known as an automotive state in 50 years… and that new fame is being decided upon right now! These are excitingly scary times. The smart will thrive while those holding to the past will go bankrupt. 

The most basic of questions is an upper midwestern nice way of asking, “Are you going to make it?” I’ve heard people answer that question with, “Oh no… we’re fine. Things at work are going really well, a little slow but really well.” Recently I overheard a small business owner get asked, “How are you doing?” He told the customer… we’re down about $40,000 on sales this year. I wondered, was that what the question the customer really was asking? 

Friends and neighbors and shop keepers and waitresses and everyone else, how are you doing? To quote our old pastor, Ray Pritchard. “We don’t know about tomorrow but we know who holds tomorrow. That makes today a good day to run to the cross.” In Christ, everything is going to be OK. How are you doing?