Tuesday, January 26, 2010

My Thoughts On Money: Margin

What is margin?

As I type this post I'm listening to the third part of a Lifechurch.tv series called Margin. Here's how they define margin:

The amount available beyond what is necessary.

So, margin is created by having more than you need. I know a lot of people who have much more than they need, but I also know plenty of people who believe they don't have more than they need. In fact, they would say they don't have enough.

If you read the previous post in this series, you can probably guess that I believe I have more than I need. But I didn't always feel that way.

Early in my marriage (which will be 10 years old in May) my wife and I decided to have kids. Well, God decided we needed kids. Either way, our daughter was born and we suddenly had a third mouth to feed. But, you know food wasn't the only expense that came along with our precious daughter.

At the time, we were living on less than $30,000 a year with two car payments and a mortgage. Needless to say, things were pretty tight. I don't think at that time we believed we had more than we needed. We probably would have said we didn't have enough.

The truth is we had everything we needed - food, clothing, shelter and transportation. We also had lots of other things on top of those basic necessities.

So, what changed? When did we start believing we had enough?

Well, it took a pretty humbling experience for us to understand the difference between what we thought we needed and what we really needed. Shortly after my daughter was born, we found ourselves racking up more and more credit card debt. The minimum payment was becoming overwhelming. So, we ran out of options and asked my parents to help us out.

My parents were very generous to pay off our debt, but were also very wise to require us to pay it back to them.

Since that time, we've never used or even had a credit card. My wife, Katie, and I had to admit to ourselves and to my parents that we were not responsible enough to have that much spending power at our disposal. It was a tough change of mindset, at first, but not having that "safety net" made us more responsible in the long run.

I put "safety net" in quotation marks because that's how we used to view our credit cards. It turns out, though, that the net was really a web that entangled us and threatened to devour us.

So, with no credit card to fall back on when emergencies came up, we had to categorize things into necessities and frivolities. We got good at saying, "No" to things we didn't need and couldn't afford.

Then something happened that changed everything again. We accepted a job that brought in a second income and relieved us of our mortgage. Pretty sweet deal, right? That's what we thought too. Suddenly, we had lots of margin.

The only problem was that we didn't view it as margin. We viewed it as extra. We made some good decisions - like paying off cars and my parents - but we also made some very poor decisions. We got very greedy and started buying all the things we thought we needed to be happy. Fortunately, we did it all debt-free, but it was still a bad idea.

Last year when the economy crashed and people started losing their jobs, we got hit too. We didn't lose our job, but we did lose most of our second income. We were back down to what amounted to one income and had to remember what was necessary and what wasn't.

We are still struggling to figure it out. We don't have any margin right now. We have lots of things, but we still have debt and very little financial freedom.

If we had viewed that extra income as margin instead of extra, we could have been debt free and we could have given a lot of money to the things that are important to us. We could have blessed the many ministries we love and pray for. We could have helped friends and family that went through some very tough times.

I deeply regret some of the decisions we made when we had more margin, but the great thing is that we can still have margin.


Anybody can have margin by doing one of two things: Make more money or spend less money.

In the current economy, making more money doesn't seem possible to many people, but almost everyone can cut expenses. I know for sure that my family can cut back and spend less.

If you believe that you are RICH, then you have more than you need and you can use the extra as margin. Don't view it as extra money for you to buy more stuff, but as margin to use however God asks you.

Proverbs 21:20

In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.

I want to be wise. I want to have margin. Do you?


Anonymous said...

i'm digging this blog series. thanks so much for putting it out there, for putting your thoughts out there, and for putting ur experiences out there. people don't want to talk about how they spend their money, but if we viewed it as sharing information (like this blog!), we could encourage, support and counsel each other.

Bruno and Lisa deJesus said...

Well said, Dan... This is a philosophy that Lisa and I live by.. Like you said, when the family started growing, we went through some growing "PAINS" :).. Now it's our job to be great stewards of the margin God is giving us!
Thanks for sharing your thoughts! And Yes, we are so, so RICH!! lol

Rebecca said...

Whole-heartily agree with this post. I get weird responses all the time when I mention that I shop at Aldi or when I'm out shopping with friends and come home empty handed because I didn't "need" anything. My friends know I could "afford" to spend the extra money and must think I'm just cheap. ;) That's ok with me.

It's a choice in what we view as important. I'd rather save a bit on groceries and use that money to bless others. We have been blessed ABUNDANTLY and I want to be an example of how God wants us to share HIS love and HIS blessings!
Thanks Dan!

Anonymous said...

Genial brief and this enter helped me alot in my college assignement. Thanks you on your information.

Anonymous said...

Opulently I agree but I dream the post should have more info then it has.