Thought for the Day:
“Every time you borrow money, you’re robbing your future self.”
Question for the Day:
Are you in the habit of borrowing money?
Welcome back to Part Two of the Coin Collection everybody! Today’s post is for all of the people who, like me, might have developed the unfortunate habit of borrowing money at some point in their lives. They say that the devil is the Father of Lies, and if that’s true, then credit cards and predatory lenders must be amongst his most beloved creations. The entire credit system is one huge fallacy that many of us destroy ourselves trying to legitimize. Creditors lie to borrowers about their intentions, and hide their efforts to make a profit behind the false pretense of offering help to those need. However, charging a person in financial straits a 391% interest rate on a payday loan is the equivalent of giving a person dying of thirst an ice cold glass of bleach! It might feel cool and refreshing initially, but it’ll kill you a lot faster than dehydration.
Borrowers also lie to creditors and to ourselves about our ability to pay back. When we’re filling out those credit applications, we know full well that if we could come up with thousands of dollars to repay a loan, we wouldn’t be attempting to put our 1991 class ring and collection of broken flat screen TVs up as collateral. Matter of fact, if we have anything of real value at all, it’s probably already taken a few vacations to the pawn shop. So, the idea that we can back up a loan with valuable personal property is as bogus as the interest rate on those payday loans.
Denial is a powerful defense mechanism and it serves the financially undisciplined person quite well. When we borrow, we somehow convince ourselves that we’ll have money later that we don’t have now. We make a lot of grand promises about what we’ll be able to do by our next payday, the 1st, the 15th, or when we get our income tax refund. Yet, if we’re already in debt, make the same money, have the same financial obligations, and practice the same poor spending habits, what exactly do we expect to be different? If I don’t have $400 today, why would I have $470 when I get paid? I don’t know if it’s ego, overconfidence, or just plain ignorance, but gassing ourselves up to believe that we can pull money out of thin air on payday is a magic trick that not even David Copperfield could master.
Now for the record, I’ve always been a hard worker. As soon as I was able, I got a job when I was a teenager. I slang chicken at KFC, worked as a hostess in a restaurant, and swept up popcorn as an usher at the movie theater prior to college. Because of my work ethic, I was able to purchase my first car and pay for the insurance at age 16. I was also able to pay for my own hair styling, and support my cassette tape and fast food habits without my parents help. I used to think that I had “plenty of money” and could take care of my own needs. However, all of that changed when I moved out of my parents house and found myself on a college campus nearly 3000 miles away from home. I got a job as soon as I got to college as well and worked the entire time I was in school. However, I realized pretty quickly that an “away from home” paycheck hits WAY different when there’s no one there to cover overhead costs like toilet paper, deodorant, snacks, dinners out, socks, underwear, toothpaste, dry cleaning, and other incidentals. Despite working as a waitress, file clerk, and a shoe saleswoman at Lady Foot Locker, I was consistently broke while a co-ed at Howard University.
Now, if you know anything about Howard, you can imagine that it wasn’t easy being economically challenged on a campus that boasts alumni such as Taraji P. Henson, Chadwick Boseman, Puff Daddy, and our Vice President, Kamala Harris. The yard at Howard might as well be a runway in New York during fashion week, and since I only had about five solid outfits to work with, my fashion game was NOT the business. So, when I came across a table in the Blackburn Center that was encouraging students to apply for the Discover card, I jumped at the opportunity. I wasn’t sure what to expect, but a few weeks later, I opened my dorm mailbox to find a brand spankin’ new Discover card with a $1000 limit! (insert harps and angels singing the “Hallelujah” chorus) That day, I thought I might have died and gone to heaven because it seemed as if all my prayers for an image boost had been answered. I felt relieved and thankful as I eagerly boarded the first metro train smokin’ toward the Wheaton Mall. ‘I can finally afford the clothes that would secure my position amongst Howard’s finest,’ is what I thought before proceeding to burn a hole straight through that Discover card on day one. Though I ended up with more clothes and shoes, and a temporary bump in self-esteem, a new wardrobe was, unfortunately, not all that I “discovered.”
I was working, so even though I maxed out that $1000 card, I figured, I can handle $30 per month, no biggie. Until, I needed that $30 for books, food, and fees. Then, when my school load increased, I couldn’t work as many hours and my credit card bill was, of course, the first to slip down my priority list. So, what did I do? I applied for another card of course! This way, I could get a cash advance and catch up the Discover Card and have a little extra to get my hair done or buy a few more of the clothes that I desperately “needed.” It made perfect sense until I realized that $75 per month in credit card bills was even harder to keep up with than $30.
Getting those first few cards was a pivotal moment for me as it marked the start of my long and sordid relationship with credit. By the time I graduated from Howard, I was indebted to various companies to the tune of about $3000. The jobs I was able to get fresh out of college were decent, but not high paying enough to make any significant headway with regard to paying down my debt. So again, what did I do? I got more loans of course! I borrowed my way through getting my first new car and apartment. I borrowed the money to furnish my place, borrowed the money for the clothes I felt I needed to look professional at work, and borrowed the money to afford weekly dinners out with friends and cover charges at the club. By the time I met my husband and settled down, I probably owed about $10,000 which is a horrible starting point for any new relationship. We got pregnant with my first son right away, so there was now even less opportunity to dedicate money to paying off debt. My use of credit shifted from charging luxuries to charging necessities. When one gets to the point of needing to borrow grocery money, it becomes impossible to continue buying into the lie that you’ll have it later and change becomes mandatory.
Those who are in significant debt are essentially renting their lives and have chosen to pay somebody for the right to owe them. (Read that again) Borrowers live in constant fear that at any moment, some unknown entity could step in and reclaim aspects of their lives the minute they’re unable to pay. Images of our sharecropping ancestors, who were forced to till and pay into land that they would never own, come to mind. Even the Word of God calls borrowers “slaves” to the lenders because you give up the right to live as you please, and must now put the demands of your wealthy creditors first. Mastercard really is your master, and whatever you want to do with your paycheck becomes secondary to ensuring your creditors get their cut. Ironically, we start borrowing in an effort to get what we think we want now only to learn that it becomes the biggest obstacle to getting what we want later. Now if that’s not a Jedi mind trick level manipulation, I don’t know what is.
A desire to ‘Keep up with the Joneses,’ impatience, low self worth, wrong priorities, and a warped value system are some of the typical reasons people find themselves in financial “entanglements.” For me, borrowing money was my response to personal insecurities and feeling as if me and my five outfits weren’t good enough. I was also seeking validation and thought that if I had the right clothes and the right look, I would finally be on an even playing field with my peers. The idea that I needed something outside of myself to prove my worth was my first mistake. My second mistake was believing that I had to have the things that I wanted immediately, when in reality, I could have waited. I could have easily opted to spend $30 per month to build my wardrobe one piece at a time instead of feeding my need for instant gratification. At least then, I would have owned the clothes free and clear as opposed to paying that $30 in interest. My third mistake was in not learning from mistakes one and two, and continuing to do the same thing over and over, while expecting different results.
But ultimately, what I think makes borrowing money problematic is it’s spiritual implications. When we are not good stewards of the money we are blessed to receive, then we dishonor the blessings of God. And when we insist upon borrowing money to get what we want now, we basically get ahead of God and demonstrate a lack of faith that says we don’t trust Him to supply our needs in His time. If financial freedom is really what we want, making a conscious decision to not accept anything that we didn’t earn has to be step one. Step two is then to commit to saving and managing it so that borrowing never again becomes a necessity. Stay tuned for part three entitled “Bacon, Nest Eggs and Extra Cheddar, Please,” where we’ll explore what to do with the bacon we bring home (besides fry it up in a pan, of course). Lol! See you all next week!
“The rich rule over the poor, and the borrower is slave to the lender.”