Lord, Help Me To Know What Is "Enough"

I spoke to my small group last night for a little over an hour about what is a "need" vs a "want" and understanding the cost associated with both. I started small with something they might be able to conceptualize at their age - buying a car. After all, it's almost time for many of them to start driving.

I stressed the fact that it's important for us ALL to realize that money habits when we're young carry into our adult lives, even me. I hope they understand that it means they'll eventually transfer their habits to their kids as well.

I threw out some big numbers at them, and I wish I could go back and do it over again, but I think they got the point. I started by telling them to think about what a car should do at its core - take you from point A to point B. Easy enough to think about as a starter example, right? Take a car that costs $10,000 vs a car that costs $40,000 (in hindsight, I should have used 2k and 10k).

I wanted them to think about the difference in price, but also the opportunity costs associated with it. A car that you can pay cash with for $10,000 vs a $40,000 car that you have to purchase with a loan can be compared like this:

$10,000 cash vs

$10,000 down payment and $30,000 loan

$30,000 over 5 years at 5% makes the loan total roughly $34,000.

And so I asked them, to think about not just the $30,000 difference, but the interest included. What is the opportunity cost of not having that $34,000 over 5 years? What could they do with that type of money? I gave them examples that they were likely to be interested in: going to soccer games with their families, attending a good coding boot camp, or building the best computer they can. How many times could they do those things over 5 years if they had that money to spare?

To better solidify the concepts, I gave them the example of my own mistake: buying my house 2 years ago. I bought a house that was outside of my budget and paid Private Mortgage Insurance (PMI) for 2 years and regret it dearly. My house was purchased in late 2017 for about $240,000. At the time, I didn't have the 20% to put toward the down payment so I had to pay PMI until I did. At about $80 a month for 2 years, I unnecessarily paid about $2,000 total. I was happy to get it removed in January.

Similar to the example with the car, I did a calculation with my boys about what a more modest $200,000 house could have given me the opportunity to do and what it could have done in the stock market in the two years I had to pay that PMI. It was a great exercise in sharing with them the mistake I made and what I learned from it. I wanted them to understand that I bought a house that I did not NEED, but rather, it was one that I WANTED. If I could go back, I'd try to find a house that cost about $150,000. After all, I don't need a big house yet. I don't need all this space.

This mistake is all too common in our world. It's a sad reality. I want my boys to learn that it hurts to make mistakes like the one I made. I thought I was good with finances. I thought it would be okay to take on that debt. I thought it would be a good investment. I thought I was going to have friends over all the time to hang out or party. I thought it would be worth it. Well, I don't really think so any more.

However, one saving grace about this house is that it continues to grow in value based on the area I live in. I hope to break even on the sale of the house when Ms. C and I decide to move out in a few years. I don't care about it being a good investment to make money off of any more. I just want to break even.

With all of my conversations with my small group, I try to tie it back to our Faith. I had them consider what God wants us to do with our money. I wanted them to think about how our finances and out debts affect our family lives. What does it do to your mental state when you worry about so many things in your lives already? Will you let debt be one of the big ones that affect you? I reminded them that habits they form now will carry into their adult lives. It's important for them to start thinking about these things while they're young. I encouraged them to have conversations with their parents. I love the idea of parents teaching their kids about money matters. Ms. C and I certainly plan to.

It's no secret that the Lord wants us to be good stewards of the things we have been given. Personally, I will try to make more of a conscious effort to pray about big purchases in the future, and ask God to help me know what is "enough" in my life. I imagine it will help me reflect on my mistakes and avoid making frivolous purchases in the future. I hope you feel the same.

-Lord, give me the grace to know what is enough. Help me to recognize when I should be grateful for the things I have, and help me to be prudent in the choices I make with the financial gifts you've given me. Give me a generous heart. Help me to be more like you. Amen.-

Mr. K