فصل 05

5 Two More Hurdles: Ignorance and Keeping Up with the Joneses

Now we will adress two more hurdles: Ignorance and Keeping Up with the Joneses

Hurdle 1: Ignorance: No One Is Born Financially Smart

The first hurdle is Ignorance. In a culture that worships knowledge, to say ignorance about money is an issue makes some people defensive. Don’t be defensive. Ignorance is not lack of intelligence; it is lack of know-how. No one is born with the knowledge of how to drive a car. We are taught the skill. Likewise, no one is born with the knowledge of how to handle money, but we AREN’T taught that!

According to the Census Bureau, the average family in America last year made $50,233. Even if they never get a raise, the average family will make over $2 million in a working lifetime! And we teach NOTHING about how to manage this money in most high schools and colleges. We have quit teaching personal finance, and we have to start again. That is why “Foundations in Personal Finance” is taught in high schools around the nation.

If you made a mess of your money and/or haven’t gotten the best use from it, usually the reason is that you were never taught to do so. Overcoming ignorance is easy. You don’t need to apply to Harvard to get an MBA with a specialization in finance. You just need to spend more time on your 401k options and your budget than you do picking out this year’s vacation.

Hurdle 2: Keeping Up with the Joneses: The Joneses Can’t Do Math

The second hurdle in this chapter is Keeping Up with the Joneses. Peer pressure, cultural expectations, “reasonable standard of living”—I don’t care how you say it, we all need to be accepted by our crowd and our families. This need for approval and respect drives us to do some really insane things. One of the paradoxically dumb things we do is to destroy our finances by buying garbage we can’t afford to try to make ourselves appear wealthy to others. Dr. Tom Stanley wrote a wonderful book in the ’90s that you should read entitled The Millionaire Next Door. His book is a study of America’s millionaires. Remember, if you want to be thin and muscular, you should study the habits of people who are thin and muscular. If you want to be rich, you should study the habits and value systems of the rich. When we think of millionaires, we think of big houses, new cars, and really nice clothes. Stanley found that most millionaires don’t have those things. He found the typical millionaire lives in a middle-class home, drives a two-year-old or older paid-for car, and buys blue jeans at Wal-Mart. In short, Stanley found that the typical millionaire found infinitely more motivation from the goal of financial security than from what friends and family thought.

If we look at Stanley’s findings and hold those up against Ken and Barbie’s life plan, we find Ken and Barbie to be lost, off course, and clueless. Ken and Barbie are in our office all the time for financial counseling. Last year they were here, and their names were Bob and Sara. Bob and Sara make $93,000 per year and have for the last seven years. What do they have to show for it? A $400,000 home that they still owe $390,000 on, including a home equity loan used to furnish it. They have two $30,000 fleeced cars and $52,000 in credit-card debt, but they have traveled well and dressed in high fashion. The $25,000 left on a student loan from college ten years ago is still outstanding because they have no money. On the positive side, they have $2,000 in savings and $18,000 in their 401k. These people have a negative net worth, but they really look good. Bob’s mom is very impressed, and Sara’s brother frequently stops by to ask for money because they are “obviously doing well.” They present the perfect picture of the American dream that has turned into a nightmare. Behind the perfect hair and the French manicure, there was deep desperation, a sense of futility, an unraveling marriage, and disgust with themselves.

This may be one of the places our metaphor of weight loss for fiscal fitness breaks down. If your body were in the same condition that Bob and Sara’s money is in, everyone would think, Five hundred pounds is just too fat. Your problem would be apparent to family, friends, strangers, and even you. The difference with Bob and Sara is that they are broke and desperate, and no one knows it. Not only does no one know it, but everyone thinks the opposite is true. So when my counselor made suggestions to turn around this bankruptcy looking for a place to happen, there was more than one place of resistance in the heart. The truth is that Bob and Sara are broke. They need to get rid of the cars and sell the house.

Resistance of the heart is real. First, of course, we like our nice houses and nice cars, and selling them would be painful. Second, we don’t want to admit to everyone we have impressed that we are fakes. Yes, when you buy a big pile of stuff with no money and lots of debt, you are a financial fake. Peer pressure is very, very powerful. “We are scaling down” is a painful statement to make to friends or family. “We will have to pass on that trip or dinner because it is not in our budget” is virtually impossible for some people to say. Being real takes tremendous courage. We like approval, and we like respect. To wish for the admiration of others is normal. The problem is that this admiration can become a drug. Many of you are addicted to this drug, and the destruction to your wealth and financial well-being caused by your addiction is huge.

Radical change in the quest for approval, is required for a money breakthrough. Sara’s breakthrough came with family. Her family had always given Christmas gifts to every member. With twenty nieces and nephews and six sets of adults to buy for, just on her side, the budget was ridiculous. Sara’s announcement at Thanksgiving that this year Christmas giving was going to be done with the drawing of names, because she and Bob couldn’t afford it, was earth-shattering. Some of you are grinning as if this is no big deal. It was a huge deal in Sara’s family! Her mother and two of her sisters were furious. Very little thanks were given that Thanksgiving, but Sara stood her ground and said, “No more.”

Sara has a master’s degree in sociology, so she is no pushover. She understood that she would lose approval, admiration, and respect. The courage to address what may seem like a small issue was a huge breakthrough for Sara. That Thanksgiving her heart had a Total Money Makeover, and she was not going to be led into well-dressed poverty by peer pressure anymore.

Everyone has a weak spot like Sara’s. It could be your third-generation failing business that needs to be closed. It could be your clothes shopping. It probably is your car. It could be the boat. Maybe yours is giving to your grown children. Unless you have had a heart-level Total Money Makeover somewhere, sometime in your life, you are still doing something with money to impress others, and that has to change before you can get on a real plan to fiscal fitness. The Bible states, “Godliness with contentment is great gain”. Those of us who have had a Total Money Makeover still know where our Achilles’ heel is and still see that weak spot as a fatal wound if we allow it to grow again. What is the one “money thing” that makes you grin inside when you see others admiring it? Do you need to give it up to break that feeling inside you? Until you recognize that weak area, you will always be prone to financial stupidity on that subject.

My weak spot is cars. After starting with nothing and becoming a millionaire the first time by age twenty-six, I “needed” a Jaguar. What I needed was for people to be impressed with my success. What I needed was family raising an eyebrow of approval based on my ability to win. What I yearned for was respect. What I was so shallow to believe was that the car I drove gave me those things. God used the whole story of what I drove to give my heart a Total Money Makeover in the area of peer pressure.

As I was going broke, losing everything, I kept the Jaguar by refinancing it repeatedly. I even went so far as to get a good friend to cosign a loan so I could keep this image car. Within the year of our bankruptcy, we were so broke that our electricity was once cut off for two days. I have often wondered what the guy from the electric company thought as he stood in the driveway next to my Jaguar and pulled my electric meter. That is sick. Finally, my friend got really tired of making the payments he had cosigned for and gently suggested I sell my precious car. I was mad at him. How dare he suggest that I sell my car! So he quit making the payments, and the bank not so gently suggested I sell the car or they would repo it. I tried to stall and only came to my senses and sold the Jaguar on a Thursday morning because the bank assured me they would take it on Friday. I was able to work my way through the mess, pay the bank and even my friend back, but the process was humiliating. Because I was too stubborn to address what that car represented in my life, I caused much damage that was avoidable.

An interesting footnote about how healing can occur on your weak spot: I was so disgusted with myself when I woke up and realized the depth of my stupidity that I swore off my drug, cars. I didn’t care what we drove or what it looked like as long as we were winning in our Total Money Makeover. Fast-forward fifteen years. We had become wealthy again, and I decided to get a different car. I’m always looking for a one- or two-year-old car, I’m always paying cash, and I’m always looking for a deal, not really caring what car it is. I was kind of looking for a Mercedes or a Lexus. A friend in the car business called me with a deal—on a Jaguar. So all those years and tears later, when it was no longer the driving force of my approval rating, God allowed a Jaguar back into my life. He returned what the locusts had eaten, but He only did so when it was not my idol. Rumor has it that God doesn’t like us to have other gods in our lives.

So maybe someday Sara and Bob will be able to pay cash to take Sara’s whole family on a cruise for Christmas. After their Total Money Makeover, Bob and Sara will be able to pay cash for a huge event like that and not even dent their wealth. They will be able to buy that cruise in memory of that fateful Thanksgiving when Sara’s heart had a Total Money Makeover in her need for her family’s approval. That change has taught Sara and Bob that if they will live like no one else, later they will be able to live like no one else.

One thing I have learned as I have lost fat, become toned, and generally gotten into better shape is this: things that require physical output are easier for me. Things like mountain climbing or obstacle courses are actually doable now, not a dream as they were when I was overweight and out of shape. The same is true of our Total Money Makeover journey to fiscal fitness. Have you realized by now that the start of your Total Money Makeover is almost an obstacle course? We busted through denial. We waded through and climbed over Debt Myths. We carefully scaled the wall of Money Myths. We are working through Ignorance. And we have learned not to place so much emphasis on our competition on the course; we have permanently quit keeping up with the Joneses, because the Joneses are broke. The obstacle course, however, was only part of our journey.

Now we stand at the bottom of a mountain with a clear view of the top. Take a look back before we start. The climb will be hard, but it will be near impossible if you are still struggling with any of the obstacles.

The Twelve Steppers have it right. They say, “Continuing to do the same thing over and over again and expecting a different result is the definition of insanity.” What you have falsely believed and acted on or not acted on has brought you to the place you are today with your money. If you want to be in a different place, you must believe and do things differently. The change will be painful, but the result will be worth it.

I’ve been to the top of Total Money Makeover Mountain, and I’ve led countless others there. I say, IT IS WORTH THE EFFORT! So lace up your shoes of resolve, wave good-bye to your “normal” friends, and let’s climb!