I completely understand what it feels like to work all day and not want to go home and cook.  But fast food is not the answer.  Not only is it a nutritional no-no, but it also leads us into a financial hole that could ultimately impact our credit score.  Let’s look at this more thoroughly.

Fast food

     To keep it simple, let’s assume that we went to our favorite fast food spot and purchased meals for the whole family.  Whether an adult meal or a kid’s meal, we will assume that they cost $5.00 each.  With five family members, we are talking about spending $25.00.

     If we did this once a week, that would add up to $100.00 a month.  If that $100.00 were to earn 10% interest annually, it would turn into $20,145 after 10 years.

Restaurants

     This can look even worse if we go to a restaurant as opposed to eating fast food.  Restaurant meals are usually much more expensive than fast food.  For example, if the restaurant has an average meal price of $15.00 per person, the bill for a family of five would run around $75.00.  Doing this once a week would have a monthly cost of $300.00.

     If we saved $300.00 every month for 10 years at 10% interest, we would have over $60,000 saved.

     I know that this situation is not very realistic.  We can’t just give up all eating out.  So, let’s just try eating out twice a month.  That brings our monthly expense down to $150.00.  Saving the money from the other two weeks would give us about $30,000 at 10% interest over 10 years.

Rushing can cost us

     I have also been known to rush to get myself and my daughter out of the door on weekday mornings, not having enough time to eat breakfast or to pack a lunch.  But buying coffee and donuts on the go or buying fast food on lunch breaks can get dangerous for our wallets.

     Many of us enjoy Starbucks, or some other gourmet coffee, on a regular basis.  These coffee beverages can easily run about $5.00 each.  As a regular donut eater, I know that donuts are usually somewhere between 75 cents to $1.00.  I usually buy them two at a time.

     If we were to buy coffee and a donut every day on the way to work, that would add up to $6.00 a day, $30.00 a week, and $120.00 a month.

     Buying lunch adds up, too.  It would not be hard to spend $10.00 on lunch.  Doing that every day would also add up to $200.00 a month.  If there are two spouses doing that, the cost doubles.  Children buying snacks out of vending machines and school cafeterias could add another $100.00 a month to the bill.

     Let’s put this all together.  When we add up all of the areas where we tend to eat out during the week, it is easy to see why our money runs out so quickly.

     These miscellaneous food expenditures can easily add up to several hundreds of dollars a month.  When we add that to the regular grocery bill, we can find ourselves spending $1,000.00 or more each month on food.

Making better choices

     Our money stretches much further at the grocery store than at any convenience food location – and we are able to feed our families much healthier meals and snacks.

     If we work on eating breakfast at home, buying lunch and snacks during our grocery store trips, and cutting back on our fast food and restaurant meals, we will have much more money available to save toward our children’s future education expenses, our own retirement, or any of a number of other dreams that we may want to reach.

     We've talked about budgeting our income to include setting something aside for emergencies.  We shuld also make sure that we do not overextend ourselves when it comes to paying our creditors.  Our credit score is basically the bureau’s idea of our ability to repay our debt obligations.  It is highly affected by several factors.

Credit history

     Our credit history is the biggest determinant.  If we have a poor track record of paying bills or paying them on time, a new creditor is less likely to want to take that chance with us.

Debt to credit ratio

     Our debt to credit ratio is also a big factor.  If we are close to our credit limits with most or all of our accounts, a new creditor will not want to get involved.  When we max out our credit cards, we are showing creditors that we are poor money managers.  We buy more than we can afford.  A new credit line will only make it easier for us to get into worse debt.

     Also, when we are close to our limits on our cards, our required payments may get high.  A new credit line will only be an additional bill, and a creditor may not want to take a chance that we cannot afford to pay the new bill.

Length of history

     The length of time that our credit has been established gives a creditor a track record.  If we don’t have a long history, a creditor may not be able to get a good idea of our ability and willingness to pay.

Number of open accounts

     Opening lots of credit lines can have a negative impact on our report and our credit score.  This is especially true if the accounts are recently opened.  Creditors will wonder why we are so desperately seeking so much capital.  Too much credit can lead to trouble.  They don’t want to compete for our payment.  They want to feel comfortable in knowing that they will receive their payments as expected.

Scores are important

     Each bureau uses a different scoring system, but the bottom line is the same.  Any score under 600 shows a creditor that we are a high-risk borrower.  A score in the 600s is average.  A score over 700 is preferred.

     Let’s look at the difference a score makes.  Although mortgage interest rates fluctuate over time, there is a difference in 30-year fixed mortgage interest rates between borrowers with different scores.  For example, if a borrower with a score in the low 500s wanted to purchase a home, the mortgage interest rate could be 9.29%.  A score in the high 700s could drop the rate to 6.23%.

     Since a credit score can affect our interest rate by as much as 3%, our mortgage payment can end up being hundreds of dollars a month higher.  Let’s look at this from another perspective.  Considering principal and 6.23% interest over 30 years, a house could cost about $552,000.  The same house at 9.29% interest would cost about $743,000.  That difference in interest changes the price on the house by almost $200,000.  Imagine what other things we could do with that money!

     We should be extremely careful as we make our purchasing decisions.  Irrational choices now can end up costing us more than it’s worth later.

“During wheat harvest, Reuben went out into the fields and found some mandrake plants, which he brought to his mother Leah.  Rachel said to Leah, ‘Please give me some of your son’s mandrakes.’  But she said to her, ‘Wasn’t it enough that you took away my husband?  Will you take my son’s mandrakes too?’  ‘Very well,’ Rachel said, ‘he can sleep with you tonight in return for your son’s mandrakes.’”     Genesis 30:14-15 (NIV)

     These verses show a bitter battle between two sisters.  There was probably a time when they were close, but many of us have seen how a man can come between two women.

     Leah is the older of the two sisters.  Although custom dictated that Jacob marry Leah first, his heart belonged to Rachel from the moment that he first saw her.

     Years later, even after Leah has given birth to numerous sons for Jacob, she knows that there is nothing that she will ever be able to do to win Jacob over.

     Leah is bitter toward her sister because she feels that it is Rachel’s fault that she feels so unloved.  As a result, she is unwilling to share the mandrakes that Rachel asked for.

     Leah’s actions can teach us two lessons about giving.

A vengeful heart can keep us from giving.

     Leah despises Jacob’s intense love for Rachel.  But Rachel really has no control over who Jacob loves.  Rather than realize this, Leah allows years and years of bitterness to create a wall around her heart that keeps her from maintaining a loving relationship with her sister.

     Although it is not clear from the text, Leah’s anger has probably had an impact on many of her family members.  There have probably been times when Leah has misdirected her anger toward her children, her husband, and maybe even others with whom she comes in contact.

     Many of us can relate to Leah’s anger.  It can be hard to separate our current feelings toward one situation from the rest of life’s situations that are still happening around us.

     Then, when we are expected to be nice toward the one that caused the anger, it can feel like mission impossible.  But Jesus told us to love our neighbor as we love ourselves.  Further, we are to love our enemies and pray for them.

     No matter how angry or hurt we feel, we cannot become vengeful.  We cannot let our anger keep us from maintaining a giving heart.

God gives to us so that we can give to others.

     Our stewardship extends beyond our financial resources.  It goes beyond tithes and offerings.  God has blessed us so that we can be a blessing to others.

     Leah refused Rachel when Rachel asked for mandrakes.  Are we also refusing God’s children when they come to us for help?

     It may not be a financial need.  We may be asked to provide food, temporary shelter, or transportation.  We may be asked to lend a hand and share our time.  We may simply be asked to listen to someone who wants to know that someone cares about them.

     As Christians, we should empty ourselves of ourselves so that we are available to God.  We have to be willing to allow God to use us to reach His lost children.  We never know when that one random act of kindness will change a life.  Changing one life can have a domino effect that can change thousands and thousands of lives.

     While we may feel small in this vast world, God can use us to do big things – if we let Him.  Let’s pray for the strength to allow God to transform our angry hearts into giving hearts.

     We can get so caught up with paying bills and trying to enjoy life that we forget to plan ahead for the little things.  Life is full of surprises, and we need to be ready for them.  When it comes to our finances, not only should we beware of credit counseling companies, but we should always have an emergency fund available.

Think of the end goal

     Our ultimate goal should be having at least three to six months’ living expenses readily available.  We do this to be able to provide for our families in the event that something tragic happens or if we find ourselves unable to work, such as following an accident or a layoff.

     This means that if our monthly expenses average $2,000, then we should work toward having $6,000 to $12,000 in reserves.  This sounds like a lot of money to have sitting around, but we would definitely feel relieved to have it available if the need were ever to arise.

Start small

     In the meanwhile, though, we should still have a smaller lump sum in reserves for smaller emergencies, such as if the car needs servicing.  If an unexpected emergency arises, there are two things that we want to avoid:  (1) pulling out our credit card to cover the expense or (2) paying cash for the emergency and having to put off paying bills or taking care of our household.

     We want to put together a plan that enables us to build our emergency fund as quickly as possible.  While we want to ultimately have three to six months’ expenses saved up, we can set a beginning goal of maybe $1,000 and intermediate goals of $5,000 or $10,000.  These goals give us a great start and can be excellent motivational tools toward reaching the bigger end goal.

Keep it real

     However, we need to be realistic in how we approach this project.  We cannot be so gung-ho about doing this that we try to sacrifice everything to make it happen.

     The most important thing to keep in mind is that this cannot be a crash diet.  Crash diets never work with food, and they won’t work with saving our money.

     The main goal here is moderation, not elimination.  Elimination only forces us to crave what we no longer have, and we end up binging and splurging, spending more than we should to compensate for the loss that we are feeling.

     We should look for areas in our spending where we may not be making the best decisions.  If we just cut back in these areas gradually, it will be a more comfortable transition.  We don’t want the yo-yo or see-saw effect to happen.

     We are looking for consistency as we create our emergency fund.  First, we determine what our end goal amount should be.  Then, we take the initiative to get started, understanding that reaching smaller goals will ultimately get us to our big goal.  Above all, we want to set realistic action steps so that we are able to make changes that will eventually become lifelong habits.

     The concept of paying off debt quickly and inexpensively is not bad in itself. In fact, it may help us move more quickly toward working on strategies to enhance our retirement income.  Consolidating bills to get one payment and a lower interest rate can be a good thing.

     Many of us may feel that we are unable to get the excessive debt under control on our own.  We may decide to turn to a credit counseling agency or a debt consolidation company to help us tackle this stressful situation.

     However, not all credit counseling and debt consolidation companies have our best interests at heart.  It is important to carefully review the practices and strategies employed by these companies in their efforts to “help” reduce debt.

Credit reports can be damaged

     Often times, these companies will use methods that negatively impact our credit scores.  For example, the company may collect the monthly payment, but the creditors will not get paid right away.

     The credit counseling company will usually collect its fee first.  Some will take a small percentage of each monthly payment, while others may want their fee as a lump sum paid off before the actual debt reduction begins.  In fact, depending on the contractual agreement, it may take several monthly payments to pay off the debt consolidator.

     Then, the money paid to the consolidation company will sit and collect for several months until a lump sum settlement offer can be made to one of the creditors on the list.  During this time, all of the creditors are usually reporting late payments to the credit bureaus.  Once the settlement offer is accepted by the creditor, there will also be a report issued to the credit bureau that the payment was “settled” for less than the full balance that was due.

What is our own motive?

     Another thing to consider is our own reason for choosing this route.  As mentioned earlier, many of us want someone with more experience to help us make some headway in a time where it seems like we are only spinning our wheels.

     But there are others who choose to take advantage of the system.  They will use the program to free up the credit cards, and, in turn, run them back up.  I know because I’ve done it – twice.  This doesn’t make things better.

     If freeing up credit cards is the intent, then we should not consolidate.  If we are seriously looking for a fresh start, we can consider consolidating and having a credit card cutting ceremony.  This way, we don’t have to worry about running the cards up again.

     To make sure that everything is really safe, we might have to cancel one or two of the cards.  I used to have my credit card numbers memorized, so I was still able to order new things online and over the phone.  If we are not disciplined, we may have to go the extra mile to protect ourselves from ourselves.

     The idea of getting out of debt is great.  It brings a sense of freedom that is priceless.  It can be accomplished with a debt consolidation company, but it can also be done individually.  Regardless of the method we choose, as we work toward the end goal, let’s be focused and determined so that we don’t hinder our own progress.