Video Transcript: Personal Finances Part 1

Hi, my name is Steve Elzinga, and I'm your professor for this enterprise class.  And maybe you're taking this class because, well, you might be interested in  ministry. You're already in enterprise. You already have your own company, let's  say, and you're interested in ministry and doing more ministry, and so you're  wondering about the whole balance of these two, or maybe you're really  interested in ministry, but you're starting to take your classes, and right now,  there's no one that's hiring you. It's not always easy to find a ministry job that will pay. And in later videos, we'll be talking about how you might, how you might try  to get a part time job in ministry, or you might even do there might be the  possibility of full time job, or maybe you have to start volunteering anyway. A  later video, we'll be talking about how you can get a job in ministry. But to begin  with, it's not easy, and you may have to volunteer, and yet you still have to take  care of your family and to pay your bills. And so we want to talk about enterprise and how you might do better at the job that you have, or you might even start  your own business. But in order to master any kind of enterprise at all, you first  have to master your own personal finances. In some ways, all of us own our  own business, and the business that you own is your personal finances. There's  money coming in, there's money going out, there's budget, there's getting  ahead, there's getting behind, there's banks, there's passwords, all these  everything that a business might do you have to do with your own personal  finances. So what I want to talk about first is 12 the biggest mistakes that people make with money. And maybe you're reasonably good with money, but I've  made these mistakes. Maybe you do too. So the number one mistake that  people make with money is spending more than you make. Philippians 3:18-20.  For as I have often told you before and now tell you again, even with tears,  many live as enemies of the cross of Christ. How do they do that? Their destiny  is destruction. Their god is their stomach, and their glory is in their shame. Their  mindset is on earthly things, but our citizenship is in heaven, and we eagerly  await a Savior from there, the Lord Jesus Christ. Their god is their stomach. You know, sometimes I don't have breakfast, and then I get busy and I skip lunch,  and I'm somewhere at work, or I'm at the church, or I'm here at Christian leaders Institute, and then I'm driving home, and I go past all the fast food places. And  you know, I'm trying to lose weight, I'm trying to eat right? This is the only body  that I'll ever have. God gave it to me as a gift. I'm a steward of it. And yet, as I'm  driving past those places, my steering wheel just goes right off the off ramp and  finds itself right in the parking lot of one of these fast food places, and before I  know it, I've ordered a chocolate shake that I don't need and all these things.  Why? Because my need is so great, and I've let the need get so great, and the  need overpowers what my mind wants to do, and that's what people do with  their finances. They they see the things that they want. And we live in a world, a  very consumer world, every everything is available to you, and today, things are  often made cheaply, and so you can buy this or you can buy that. This past 

weekend was a big sale, the biggest sale day in the United States in the year.  It's Black Friday, and then Cyber Monday, and people shop everywhere. I  resisted. I didn't go. I didn't I didn't go to any store. But then last night, I went to  the store, and I just felt the need to buy something. Everyone's buying stuff,  every everyone's getting a good deal. And so I went in and and I bought these  little things that I don't need. I bring them home, and it's like I got a package of  socks, and I already have a drawer full of socks, but these were really cool  socks. I bought these socks I didn't need it. Well, people do way more than  socks. People, People buy cars, they can't afford. People buy homes. They can't afford. People buy clothes. They can't afford. People spend more money  sometimes than they make. Well, how do they do that? Well, they go into debt.  Number two, monthly payments. We live in a world of monthly payments.  Sometimes I ask someone, well, how much did you pay for your car? Well, I  paid 140 a month. Well, how many months? Well, I don't know. Well, how much  is the total of the car? I don't know. It's 140 a month. You realize that when you  buy a car at $140 a month and the payments last seven years, you're paying like whatever the cost of the car, if the car was $10,000 you're paying $15,000 in the end. But this is how salesmen work. If you're going to buy an iPhone, it's $700  $700 I'm not paying $700 just for a phone. Oh, but it's $28 a month. Oh, $28  let's see, I can afford $28 that's that's how salesmen get you to think it's just a  monthly payment. And fine, you can pay $28 for your cell phone, but now you're  paying $28 for your cell phone every month. You're paying $150 for your car. In  the United States, we have all these TV options. You're paying $50 for your  cable. Then you have your internet at $40 and then on and then you have your  house payment at $800 and you start adding it all up. You're paying a lot every  single month, and then your car breaks down, and you need a new car, and  you're still paying payments on the old car, and you're paying payments now on  the new car, monthly payments, things like cable. I don't even bother. I hate  monthly payments. I don't I don't want what I what I'm buying to be broken down into monthly payments. If I'm going to buy that iPhone, I'm going to pay cash, I'm going to pay 100% of it down, and if I can't afford to pay the whole thing, that's  what keeps me from buying number three, paying interest for things that don't  appreciate now, what is appreciation? Appreciation is when something goes up.  So the first house I bought in Canada was $114,000 8 years later, I sold it for  $240,000 so it appreciated it. It more than doubled. Now, when I buy a car for  $10,000 5 years later, I sell it for 3000 it doesn't go up in value. It goes down in  value. Spend your money on things that appreciate, things that go up. Well,  what things go up? Well, in our world today, houses go up. So you buy a house,  and then even though it's older, it often goes up in value. Sometimes a business, when you invest in something like a business, it goes up you invest in, in the in  the stock market or the markets in one way or another. Even if you put money in the bank, you get the money the interest that the bank gives you, those are 

things that go up. Try to maximize putting your money into things that go up  rather than things that go down. So rent, you pay rent for a house, it just goes  out the door. It doesn't go up in value. Maybe the house goes up in value, but it  doesn't come back to you. So try to buy your own house, at least here in the  United States, buying a house is a good investment, but you have to have the  down payment. So you have to save enough money to get the down payment to get to the house, but try to invest in things that go up. Number four, credit card  traps. Credit card is very convenient. I remember the days before the credit  card. You were somewhere. I remember trying to rent a car, and they wanted  $500 down to rent the car. I didn't have a credit card. Didn't know what one was, so it's very convenient. If you have a credit card you can rent things, you can  buy things online. I have a credit card where I get miles for for using my credit  card. But there's a few downsides to the credit card. The number one downside  to the credit card is that you can buy whatever you want. You're at the store and  you have $20 in your wallet, but you have a credit card that can be anything.  You have a $5,000 limit. You see something, and all of a sudden you want that  thing, and it looks like it might be a good deal. and if you don't buy it now, maybe it'll be gone. There's that widescreen TV that you want, and it's $100 less than it  was before you can make a decision right now to buy it because of that credit  card. And so people make more emotional purchases because of the credit  card. If you had to pay cash, you probably wouldn't buy it. And that's one of the  techniques to saving money, is to is to pay cash. You buy a $700 widescreen TV, and if you had to go to the store with $20 bills, you'd have a lot of bills this high  to hand to the person. Well, when you hand over that much money to someone.  You go hold it. Is this worth what I'm buying? But the credit card is so small, you  know, $700 or $5 it doesn't make any difference. It's the same credit card, not  only that, but often, when you when you spend with a credit card, you end up  spending more money than you have, and then they start charging you interest.  They don't they want you to spend more money than you have. Now, you have  to pay interest, and interest rates are very high. At the bank. You make 1% the  credit card makes 10% off of you, and then if you miss a payment, it goes up to  20% or 30% so the thing that you bought originally for $100 ends up costing you 300 in the end. Number five, car payments. People buy cars on car payments. I  when I was 16, I started saving for my first car. I was driving my parents car. At  16, I started saving for my first car. My goal was to buy a car and to pay for it  with cash. So I saved for two years. After two years, I bought a Volkswagen bug  and I paid cash, and immediately, when I bought that Volkswagen Bug, I started  making payments to myself for my next car that I bought seven years later. So  what do most people do? Most people what they do is they see the car, they  want the car. They don't have enough money to buy the car. So they buy the car, and then they make payments. And as they're making payments, they're paying  interest to the bank or to wherever they bought the car. So what am I doing? I 

saved, bought my first car with cash, and then immediately, for the next seven  years, I'm making payments for my next car, not to the bank, but to myself. So  instead of paying the interest, I'm making the interest. And because I got started  that way with my first car, I did this, I've been doing this the rest of my life, the  only difference between myself and someone else who's buying a car is we're  both making the same payments. I'm just making the payments ahead of time,  and he's making the payments after the fact. We're making the same payments.  He's paying interest to the bank. I'm making interest from the bank, but we're  making the exact same payments, and the only difference between us is I got  started with the first one, right? I saved until I had enough money to get that first  one, and then the rest, I'm making the interest. The rest of my life. I've done  them. I'm 61 now, and I've done that ever since I make my payments for my next car next before I buy it. Number six, most common mistakes, co dependent  relationships built on money. Luke 15, Jesus tells the story of a son who runs,  runs off with his dad's money, and he blows it, he squanders it, and he's  spending his on wild living. And he has all these friends having a great time, and then he runs out of money, and all of a sudden he finds himself all alone, feeding the pigs. What happened? Well, he ran out of money. There are people in your  life that are connected to you by money. They could be your own kids. The  connection is money, and what you give them or don't give them, it could be  your parents. It could be your spouse. The connection is money. My father was  in some ways, that way, he would buy things for us. He would buy toys and  things that we could play with. But he sort of held it over our heads that now we  owe him, or he was trying to, in some ways, earn our love through all this giving. And that's a trap that we can fall into. And all of a sudden, our money and the  money that we make gets tied up with our connections to people. I don't want  people to love me because of money, and I don't want to love people because of money. They need to separate relationship from money. Number seven, hooked  on shopping Proverbs 30:15, the leech has two daughters. Give, give. They cry,  and that's what shopping is. There are people that that spend their whole lives  trying to figure out how they can sell something to you. How can we sell to you?  How can we get you to buy all the advertising, all the marketing, all of it is  centered on trying to grab hold of you. And it's like a game. It's a game that you  get caught into I like sports, and once I'm in a sport, you know, if you're playing  soccer, or what many in the world call football, you kick the ball, and the ball  goes that way. I chase it. I'm going to chase the ball. I can be dead tired, but you kick the ball towards me. I'm going to do I'm going to get them all my energy to  go. And that's what shopping is shopping somehow meets this sort of seeking  and finding need that most human beings have. Men like to go out hunting or  fishing, and it's this thing of looking for something, striving for something, and  then maybe getting it. And sometimes it's hard, and the harder it is, the more of  a challenge it is, the better. And that's what shopping is like. Shopping is this, 

you know, you're up, you're on a hunt, you're on a treasure hunt, you're trying to  find something, and people get hooked up into this game, and it's very  compelling, and you end up spending again more than you have. You end up  buying things because it's a good deal. People will say, after they bought  something, I saved $100 on this. Yeah, the thing cost $600 normally it was  seven. I got it for 600 I saved 100 No, you spent 600 if you didn't buy it at all,  you could have saved 600 not 100 hooked on shopping. Number seven, reward  spending. What is reward spending? Reward spending is is it's like when you're  dieting, you're on a diet. You forego things, you eat very small portions, no  chocolate shakes, no dessert. You put all those things away, and you've been  doing it for a week. So after a week, you finally decide to reward yourself. I'm  going to splurge and I'm going to have the triple chocolate sundae with the nuts  and the whipped cream and the cherry on top. I'm going to reward myself for the good behavior of sticking with something. And people will do that with money  vacations. They go on a vacation. Usually they save money like crazy, but hey,  we're on vacation, so let's just splurge. Let's just spend and so all of a sudden  they're spending money like they never do, and they end up blowing all kinds of  money for a moment. Well, one example that I have, you know? And when you  go to a restaurant, when I go to a restaurant, I never order the drinks. Lot of  times, the drinks are just as expensive as a meal. You know, one Coke is $3 and my meal is $3.50 why don't I just forget the coke? Have the meal. Drink some  water. Have a coke when I get home. But I'm rewarding myself, and so I, sort of, you know, fool myself into thinking I'm not spending that much money. Number  nine, debt motivation, Romans 13:8, let no debt remain outstanding, except the  continuing debt to love one another, for whoever loves others has fulfilled the  law, debt motivation. I'm not a very good chess player. I don't know what the  moves are. I don't know what the offense is, you know, I just start moving the  pieces in the beginning, and what I do is I just wait until I get into trouble. I wait  until the person traps me into something, and now I have to get out of trouble,  and now, all of a sudden, I know what to do. I have a game plan. Because I'm in  trouble, I'm defensive, and I think that's what a lot of people do with their money. They don't have an offensive game, they don't have a plan. They don't have a  strategy. They don't have a budget, so what they do is they just spend money.  Oh, I got money, I guess I'll spend it. Then all of a sudden, the red flag starts  shining, and the bank says, Hey, you owe money. And the credit card comes.  And now all of a sudden, now I've got to pay attention. People get motivated by  their debt, those monthly bills. I have to pay for my car, I have to pay for this,  and I have to pay my cable, and I just bought a new phone, and so all of a  sudden the bank is managing my money for me. I don't have to even think about it. I'm going to let my debts manage my money. But see then you can never go  forward. You're stuck having your debts manage you, and your debts are why  you're going to work. Hey, I got to work this weekend because I have these 

debts. I just talked to a guy in my church. He's got to go truck for the next month  because he has debts. He's got his mortgage payments coming up. He has  taxes coming up, and so all of a sudden he's got to work. His life revolves  around what he owes instead of a goal of getting ahead. Number 10, living  paycheck to paycheck. Proverbs 6:6-8. Go to the ant you slugger. Consider its  ways to be wise. It has no commander, no overseer or ruler. Yet it stores its  provisions in summer and gathers its food at harvest. Even ants, for goodness  sakes, know how to plan and think ahead. But often, as human beings, we don't. We don't plan ahead. We just let things go. The guy I was telling you about this  trucking guy. All of a sudden, his taxes are coming up, due next week, so he  came home, spent a little time with his family, but he's got to head right out. He's got to go, he's got to go out, and he won't be home for a whole month. He wants to be home with his family, but he's got to do that. Why? Because the taxes are  coming up. He's being driven by the immediate need. He doesn't have money in the bank to take care of this. He doesn't have any emergency fund. He's got to  go out and do it. He's living paycheck to paycheck, all those monthly bills, and  then an emergency happens, you know, the refrigerator goes out, something  goes into the car, dies and he doesn't have any money to take care of that. It's  all of a sudden, everyone's scrambling. And then you get you put things on your  credit card, and now you're paying 30% interest paycheck to paycheck. Number  11, negative money habits, autopilot. Lot of people do things by habit. They go  to work every day. They don't take a lunch. What do you got to do at lunchtime?  You got to go out to eat. You got to spend twice as much money. That's my  habit. That's what I do. Some people have a coffee habit. Here in the United  States, people like Starbucks. Starbucks is paying triple for the coffee that would cost, you know, a lot less, but that's my habit. I go here at 10 o'clock, I drive past this place and I get this, I get the triple mocha thing with the peppermint thing  and a little straw and a few sprinkles. That's what I do every Monday. If I miss  that, my life wouldn't be good. Doesn't matter how much it costs, we get into  these negative habits. People go to the store. Young families go to the store.  They bring their kids, they go to a general store, and the kids clamor and yell  and scream, and they have a fit until mom buys something for them. That's the  habit. Why do they cry? Because we bought something the last 10 times we're  stuck in this habit. You look at your life and see how much money just goes out  the door because of certain habits that you have autopilot. You don't even think  about it. Last one do not appreciate the real cost of everything. Luke 14:28,  suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it, the real cost of  everything. I was really blessed with a father who taught me this from a young  age, the real cost of everything. My first church was in the country, and it was a  20 mile drive to the city and 20 miles back. Sometimes we would drive to the  city, go have McDonald's and then come back. And I remember telling my father 

that he looked at me and said, Now, do you know what the real cost of that is,  20 miles there and 20 miles back, that's 40 miles at 50 cents a mile, that's $20  so you spent $20 to get there and back to have a $10 meal at McDonald's. He  said you could better off next time you're in town, buy the best steak that. You  can find and then cook it up at home, and you'll save money. The real cost, by  

the way, to drive anywhere. It does cost 50 or 60 cents a mile. I even with an old car I once I didn't believe it, so I just kept track of everything, and that's what it  costs. So when you go 40 miles to something and then 40 miles back, whatever  it is, that's $40 that's the real and not only is it $40 but if you took that same $40  and you invested that $40 that $40 becomes $1,000 30 years later. So what's  the real cost of things? It's not just the money that you put out. It's the money  that you could have made if you didn't spend the money in the first place. Okay,  we'll talk more about these things in our next video.