Money is a protection, but wisdom is a better protection, or so Scripture says (Eccl 7:12). For one thing, in order for your money to protect you, you must have the wisdom to protect your money.
The “Branding” of America
Madison Avenue works overtime creating desires within you so you’ll spend your hard-earned cash. According to one private investment firm’s forecast, over $200 billion is now being spent on advertising each year. There’s nothing wrong with much of the advertising out there — a company needs to make you aware of its product and the benefits it can bring you. Brands become trusted for certain qualities in their products, and it’s good for companies to promote that. Many of the ad campaigns are clean and filled with good humor.
Advertising becomes a problem when you end up buying things you don’t need or can’t afford, and worse, when you chase after images presented in the advertisement — especially if the imagery is contrary to the values of our faith.
Let me give you an example: I recently came across an advertising insert in a well-respected national daily paper. The insert was for an upscale car and ran 16 pages. Like many ads today, it appealed to our baser senses by tying a beautiful woman and the car together. The message was clear: get the car and you get the woman. It’s a seductive statement that promotes the idea that life can be lived for self, regardless of moral and financial considerations, because “you deserve it.”
These types of ads are not harmless. They create emotional responses in us that aren’t always based on the most virtuous thoughts. When we buy something because of advertising like this, we may be motivated by ego, and falling into that trap can be expensive — both monetarily and spiritually. So recognize advertising for what it is. Don’t make purchases based on images, but rather on your needs and the merits of the product itself.
This takes real discipline. You know the symptoms: the adrenaline rush, then the rationalizing points you make to yourself or your spouse about why you “need” the new car, dining-room set, boat, bicycle, golf clubs, or whatever else it is you’re considering, and that little voice telling you why it’s so important that you get it today. When the buying bug hits, it hits hard, and none of us is immune!
When you have the buying bug for a big-ticket item, that’s when you’re most vulnerable as a consumer. You become willing to throw out all the good spending habits you have been working to develop. Just this once, you think, it doesn’t matter that the item isn’t in my budget. Your heart is set on a particular brand; you aren’t in a mood to take the time to comparison shop; you won’t consider waiting to see if you can get what you want used for a fraction of the price. I know because I’ve been there!
My guess is that you’ll never completely get rid of the buying bug, but as you consistently apply wise principles to your financial decisions you’ll have fewer instances of being infected. So make the commitment that when it hits, you’ll take the time to sleep on the buying decision. Take another look at your budget and consider whether the purchase fits into your current plan. Even if it does fit, ask yourself if it’s the best use of your funds at the present time — because wisdom recognizes that once that money is gone, it’s gone.
Don’t Be Afraid to Buy Items “Slightly Used”
A great way to stretch your resources is to purchase gently used items. These can include cars, home furnishings, tools, and clothing. It’s true that you won’t get that “special” smell that comes with many new items, nor will you be able to be as selective about the style you want. But let me ask you this: After a year of owning something, hasn’t the newness disappeared and the desire for a particular color gone away? By locking yourself in to a particular brand, style, and color too early, you end up losing a lot of your bargaining power.
There are a number of places to consider when making used purchases, including estate and garage sales as well as flea markets. One of the best ways to find what you’re looking for, though, is to let your family and friends know what you’re seeking. You’ll be surprised at how often someone in your circle of friends will have just what you want, and be happy to have you take it off their hands. We know of a family that put out the word that they wanted to buy a piano at a good price. Within six months, two free pianos were offered to the family, each an older model, but lovingly maintained.
Even if the item isn’t exactly what you wanted, you may still find it to be a good bargain. If you get it for an especially good price, you may be able to make use of it in the interim — perhaps even eventually selling it for more than you bought it for — then purchase the item that you really wanted. This whole fascination with “trading” is part of what has made eBay a household name, and it could work for you, too.
Providing for Your Family with Insurance
One of the best ways to use money as a protection is through the wise use of insurance. While you won’t find insurance in sacred Scripture, per se, you will find teaching that encourages us to make effective plans to meet the needs of our family. For example, 1 Timothy 5:8 says, “If anyone does not provide for his own relatives and especially for members of his immediate family, he has denied the faith; he is worse than an unbeliever.”
In biblical times, society was based on an agrarian economy, with land being passed on from generation to generation. This acted as the equivalent of an insurance policy. With the shift to an industrial and information-based economy, another form of safeguard became necessary. Insurance has filled this need, and is an appropriate tool that helps us fulfill the instruction given in First Timothy.
There are five primary types of insurance coverage that are important for us to deal with, including health, home, auto, life, and disability. There isn’t room here for an exhaustive review, so I’ll just touch on some basics. If you’d like to dig deeper into the insurance topic, I recommend reading Insurance for Dummies. While I’m an advocate of reasonable insurance coverage, don’t fall into the trap of overspending in this area. Remember that insurance is meant to minimize your risk of a catastrophic loss, not pay for all of life’s emergencies. By keeping that in mind, you’ll select levels of insurance that won’t bankrupt your budget. In my next column, I will go into more detail about insurance.
Phil Lenahan is Director of Finance at Catholic Answers and author of Catholic Answers’ Guide to Family Finances. If you have a question you would like Phil to address, contact him at [email protected].
