catholicsphere

Regular visitors and readers of this blog may recall the entry that talks about changes that I’ve been making in my life as well as the recommendations for finding time for faith.

I’ve since finished Dave Ramsey’s “Total Money Makeover” and am now reading “Financial Peace Revisited” and thumbing through his Q&A book “The Money Answer Book“. In fact, I became so excited about the prospect of being debt free that I’ve mapped out the “on paper, on purpose” budget spending in monthly spreadsheets for the next year — which is a few months beyond how long it will take us to be debt-free except for the house. It was eye-opening to see how much we (or more correctly … I ) were just spending without thinking about it.

But, while I did want to express the excitement at the thought that we’d be debt-free and then be working on becoming financially free, that’s not exactly the point of what I wanted to say in this post.

I was reading this article from The Wall Street Journal online (via Yahoo! Finance) that gave advice about managing debt. I don’t necessarily agree with most of what the article recommends … such as buying on margin, or managing your debt by “periodically tallying the balances of all your consumer debt”. I am convinced that one needs to stop “managing debt” and instead leave it all behind.

June Walbert, a financial planner with San Antonio-based USAA, a financial-services company that largely focuses on military families, counsels clients to limit total debt payments to 20% of pretax income, so they have a buffer for surprise expenses.

While that might be a good rule for folks who are determined to take on debt, those “surprises” (and some things that are considered surprises that really aren’t) will inevitably come up. What is going to happen to even those if the cost of living suddenly spikes, as was mentioned in an article I linked to yesterday about the rising cost of groceries? How much effect have rising gas prices had on your ability to pay bills and debt or save and invest for retirement (or generating income now)?

When the cost of living goes up unexpectedly (although, a rise in the cost of living should be expected always), people who are already on the edge, living paycheck to paycheck, will end up falling further behind and accumulating more debt. In turn this creates stress, anger and strains on families and relationships.

That is against what we as Christians believe and profess, and what we’re working toward in our families. Continuing on down that path would be just plain dumb.

[tags]finance, debt, budget, cost of living, economy, catholicsphere, stress, dave ramsey, family[/tags]