In these times, show others a better way
By Howard Dayton, Cofounder

With the coming of another July and the celebration of Independence Day throughout America, it would benefit us to remember that not every nation has such an observance.

In many nations, the attitude of the leaders is:

• if my religion is good enough for me, it’s good enough for you;
• if you speak, it must be something I approve;
• if you make a mistake, don’t expect justice; and
• if you don’t want any trouble, do as I say.

Independence means we are free to choose our own religion, critique our government and select our leaders, receive a fair trial, and enjoy a great measure of personal freedom. It is a precious gift, but it is not perpetual. It must be maintained, and it can be lost.

During the past few decades, we have voluntarily given up much of our freedom by electing leaders who increased the scope of government. But there is another way in which we have lost freedom, and it involves the decisions we have made with our money.

One of the most striking indicators of this loss is the household debt service ratio (DSR), which estimates the ratio of debt payments to disposable income.

These payments consist of mortgage and consumer debt payments. In the final quarter of 2008, the DSR was 13.90 percent.¹

There also is the financial obligations ratio (FOR), which takes the debt service ratio and adds automobile lease payments, rental property payments, homeowners’ insurance, and property tax payments. In the final quarter of 2008, the FOR was 18.97 percent.²

When so much of your income is committed to debt payments, you have lost a great deal of your freedom. Unfortunately, with falling home prices it has become increasingly common for homeowners to be upside down on their mortgages, and when they are forced to sell their homes, they do so at a loss.

Of course, all the news surrounding the U.S. economy is not negative. There have been some encouraging signs. But we must remember that our nation has been on a spending spree that pushed household debt, as a percentage of net worth, to 27 percent.³

So, while we may see a recovery, it may not be a boom. Americans have a lot of debt to repay, and in recent months they’ve been saving more. Plus, the economic crisis may lead many consumers to be more cautious for quite some time.

This crisis has shown consumers the danger of playing fast and loose with their financial futures by living beyond their means. It also highlights the danger of risking big money on overvalued investments that are headed for a crash-landing with reality at any time.

Even if we happen to gain wealth, we need to remember that it’s never completely secure. “Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle” (Proverbs 23:5 NIV). And, the apostle Paul says that riches are uncertain (1 Timothy 6:17).

God’s desire is for us to have an eternal perspective—to value what lasts forever. In conjunction with this, Jesus said, “The kingdom of heaven is like a treasure hidden in a field. One day a man found the treasure, and then he hid it in the field again. He was so happy that he went and sold everything he owned to buy that field” (Matthew 13:44 NCV).

People who don’t know Christ often view life as a brief interval that begins at birth and ends at death. They see no further than their own life span, so they often reason: “If this is all there is, why not spend money any way I please?”

Those of us who know Christ know that life is short, eternity is long, and what we do during our lifetimes will matter forever. Let’s put that knowledge into practice now more than ever before by dedicating our lives completely to the Lord, maintaining an eternal perspective, and handling money God’s way.

The result will be that as the lessons of this crisis continue to unfold, others will look to us and see that God has a much better plan for their lives.

¹ Household Debt Service and Financial Obligations Ratios. The Federal Reserve
 Board. www.federalreserve.gov.

² Ibid.

³ Miller, Rich & Benjamin, Matthew (2009, May 11). U.S. Recovery May Start,
 Then Sputter as Zarnowitz Rule is Bent. www.Bloomberg.com.

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