Frugality is Not a Competition

…it is merely a strategy.

I’ve never had a particularly positive view of competition, probably because I have most often seen it used for selfish reasons. I think of some of the less-reputable athletes at my high school who thought it was fun to dominate those less-athletic in gym class. There are some very good things about competition, though, things that build up oneself and others, and it has also proven in business to drive prices down, Adam Smith’s “invisible hand”.

But humans seem to be inflicted with this terrible plague, in that we are always doubting ourselves, always fearful. The easiest way to counter these fears is to believe something good about ourselves and to lash out when this is challenged. I’ve done it, you’ve done it, and so has everybody else.

In a way, we always believe we are right, otherwise we would believe otherwise. By definition, our opinions are what we believe to be true. The trademark of kind people is being willing and able to suspend these beliefs at time in favor of consideration for other people.

It doesn’t surprise me that even a good thing like frugality can become competitive. I see this most often on the forums I read.

I don’t actually know how frugal I am. Sure, I have a 50% savings rate, but I also routinely exceed my grocery budget. Some might consider that budget item frugal, others might not. Likewise, I think it ridiculous that anybody would ever spend $200 on a pair of sunglasses, while others may think it ridiculous that I spent $200 on my primary snowshoes. Does it change the situation if it is told that I have a history of losing sunglasses, and other people may have no interest in snowshoeing?

There is really no point evaluating another person’s spending because there are too many factors at play. Dave Ramsey tells a story in his book “The Legacy Journey” of a very wealthy man who had a net worth of nearly 2.5 billion who gave 500 million away in one year. He ‘treated’ himself to a $100,000 car…and received hate mail from Christians in his church. If only we all had a little more perspective!

Now, people fall astray of good money practices because they are too busy constantly ‘treating’ themselves to expensive gadgets, toys, gear, cars, etc. They get so accustomed to their spending that they fail to see the greater problem developing, fail to realize how much they are wasting. It is fairly easy to spot this, especially if high-income earners are complaining about never having money. You can do a news search for this and find dozens of hilarious articles of people who have lost touch with reality. “Let them eat cake!”

But there isn’t some master list of frugal commandments. Our spending is as varied as our personalities. I believe one of the best ways to gauge whether a purchase is good is to evaluate how often you find yourself using it. This past Spring, I thought about taking advantage of a large sale to buy a backpacking backpack and a backpacking sleeping bag. As cool as these would have been, I realized that the chance of me using them more than once or twice a year was very, very slim. So instead, I spent half the money on a pair of excellent trail running shoes and a hydration vest, and have enjoyed using these nearly 7 times this past season alone. I’m actually very happy with those purchases and they aren’t wasting away in the closet. In fact, they’re in this room with me right now.

Similarly, there’s no moral imperative to get the greatest return on financial investments possible. Would you say that spending $10,000 on lottery tickets is a responsible financial move? Of course not, because the risk of losing is so high. In the same way, the highest ROI on financial investments often comes with the greatest potential for failure. Sometimes a lower return is more responsible.

Frugality is great as a strategy toward a specific goal. I want to be financially independent, and being frugal helps me focus on what I truly care about and save the rest. Some people may be frugal in order to take care of their families. Others may just be saving up for a big purchase. Some may even be frugal for it’s own sake or as a means toward having money for a rainy day. But your goals will be your own, so it isn’t enough to boast of your frugality as if that were an expectation others should follow. I want to encourage everyone to be frugal so they can set themselves up for success and avoid the trap of Middle Class consumption and debt. Oftentimes I feel people are asleep at the wheel, steering themselves off a cliff, so I speak out about money frequently, hoping I can inspire a few. And sure, sometimes my friends make purchases I would never make myself, but it doesn’t make any sense for me to be bothered by this (not that that hasn’t happened on occasion, because I’m definitely not perfect).

Anyway, I would argue that having a true goal is the key here. Maybe you’ve been paying for Audible and never use it. Then stop paying for it! Maybe you are paying for a gym membership and never use it but keep it because it’s a “good rate”. Stop paying for it, you’ve probably wasted more than the advantage of the good rate! Trim the excess from your life, focus on what you love. Have money set aside so it doesn’t keep you awake at night. Bless others with your goals, and budget for those things. But it’s just not a competition.

 

Contributing to Your G-IRA

If you’ve done any research into retirement or investing, you’ve probably encountered several terms: 401k, Roth 401k, IRA, Roth IRA, 403b, 457, and several others. I had never in my life actually taken an interest in tax law until this past year, and it’s a little scary just how much there is to learn. Most importantly, you should know which of these terms are relevant to your work and financial situation. But I’d like to present a new term:

The G-IRA.

In true modern Christian fashion, this means “God IRA“, or “Giving IRA” if you must. What do I mean? First, let’s look at retirement contributions.

One of the central tenets of the Financial Independence community is contributing as much as you legally can to tax-sheltered retirement accounts. Ideally, by saving large portions of your income, you are using your savings to “max out” your contributions to the various accounts available to you. The IRS determines the contribution limits for these accounts, and the limits typically increase from year to year. For example, this year I can contribute a maximum of $18,500 total between my 401k and Roth 401k, both of which are made available by my employer. This acts as one bucket, where some of the money could be in the Roth 401k, and some in the (traditional) 401k. Another bucket is the IRA, which currently has a contribution limit of $5,500 total between (traditional) IRA and Roth IRA. So the goal is to max these out. Some people will have access to a 403b instead of a 401k, so that gets maxed, some have access to a 457, so that gets maxed, and others who own a business have access to a special type of 401k, so that gets maxed. It gets a little crazy, but the whole idea is to max out every tax-sheltered account that is available to you before investing in taxable accounts (which do, however, play a different strategic role).

So what does this have to do with the G-IRA?

Well, if we shoot for clean, fixed numbers for our contributions, why not also shoot for clean, fixed numbers for giving? It’s easy for me to be excited that I am $3,500 away from maxing out my Roth IRA (I’m not mixing it with a traditional IRA), but what if I were also excited to be giving to God’s purposes?

Last month I felt like God was bringing this to my attention. I won’t write much about my employment situation, but suffice it so say that I could easily have been laid off early in the year, but I wasn’t, and I have learned a tremendous amount since then. God really pressed it upon my heart that all of this is from Him, so although it’s great that I am trying to save as much as I can and make wise financial decisions, why not give some of my earnings away, since so much has been gifted to me in the first place? I felt like God gave me a target number. “Can you let go of this much?” My answer was, “Yes, I would like to”. And so this has become my G-IRA, a bucket I’m hoping to “max out”.

Some attributes to the G-IRA:

  • There are no contribution limits, although it is perhaps more motivating to have a target to reach. Pray for what this target should be.
  • It is not tax-sheltered for you unless your gift is an approved “charitable contribution”, which may be tax-deductible. I don’t take particular joy in giving to organizations, so for me, this is always post-tax (roth style).
  • It is “tax-sheltered” for the receiver of your gift, and you don’t pay any additional tax as long as you aren’t exceeding the IRA tax-free gift limit, and you probably aren’t (https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes). But think about it. When a person earns money through a job, they pay taxes on those earnings. So they are actually working more than their hourly wage in order to receive the paycheck they do because they have to pay taxes on their income. When they receive a monetary gift, it is “tax-free” for them, because even if they had to work X number of hours to earn that at their hourly wage, they would have to work even more to net that amount after taxes, so your gift is worth even more to somebody than its dollar value may suggest.

 

Long ago I bought some food for my church’s food pantry and I realized that it was ridiculous to buy the cheapest cans of food when those were not the cans that I or my family ate. I was challenged to buy for others what I would buy for myself, so I did. That idea has stuck ever since. If I donate to a school drive, I’m not going to buy the shitty materials, I’m going to buy the good stuff I would buy for myself. (for the record, I can’t say I contribute to school drives). Why should this be different for anything else?

What the G-IRA does is help you look past the expense of a thing. It’s easy to cut corners because “it’s a gift”, and of course you will have things you want to buy for yourself. But when you are shooting for a target, it doesn’t really matter that you may be spending a lot extra on something of quality for another person because your goal is to give $X in the first place. So as long as the gift is helping you reach your giving goal, who cares about the extra expense?

I mean, I don’t consider myself a nature junkie, but I do enjoy hiking, snowshoeing, and camping. Let’s say you live in Colorado and someone new to your church has moved from out-of-state and has no gear for these things but wants to start. What if you could just give them a $500 REI gift card? “Here, punk, getcha some hiking boots, socks, a base layer, and a good jacket to get started”. How cool would that be?

Anyway, you get the point. There’s not much more to say about this. Especially if you are in a situation to give, you should think about this, as I think some incredible things would happen in the church if people did.

Thoughts on Prophetic Giving

Several years ago I read Marcel Mauss’s anthropological classic “The Gift”. It was one of the driest books I have ever read, made what I thought were several inaccurate conclusions, and really left me with a bitter taste in my brain. What it did accomplish, however, was impressing upon me just how complicated gift-giving can be in various cultures.

I’ve been thinking lately about how the prophetic translates to gift giving. This was really just a mental exercise, but I wanted to write about what I figured out. Considering one-person to one-person giving, here are some intricacies.

  • Context of the gift-receiver:
    • in need
    • not in need

This seems obvious but is a key element in giving. It makes sense that we would give to someone in need, but in some rare cases it makes sense to give to someone not in need. Someone who is not in need may need to be humbled, for example. After all, nobody wants to be “in need”, as humans often equate this with “not being good or capable”, which is absurd but is nonetheless a classic bias. Sometimes the wealthy need to be gifted, too.

  • Appearance of the gift-receiver:
    • outwardly wealthy
    • not outwardly wealthy

Considering our previous notes about context, we now have four positions: outwardly wealthy (in need), outwardly wealthy (not in need), not outwardly wealthy (in need), not outwardly wealthy (not in need).

I’m starting to feel like a Sensor in the Myers-Briggs types!

The last key:

  • Desire of the gift-receiver:
    • wanting a small thing as a sign from God
    • wanting a large thing as a sign from God
    • wanting words as a sign from God
    • not wanting anything as a sign from God

People often do not expect large things from God. Ever paid for one month’s rent for another person? Probably not because that would probably be difficult to muster. But it should not be ruled out.

Also, things may be useful or they may be symbolic.

So in the context of prophetic giving: you cannot assume need based on appearance. If I were to drive my car around praying who to present a gift to, it would make just as much sense to be driving in a “wealthy” neighborhood as it would be a “poor” neighborhood. The distinction is not wrong to make, however, and it’s possible to be called to one or the other. The point is not to ignore social indicators, it’s to ignore your own prejudice in favor of God’s will.

Giving does not always involve physical objects. Sometimes it involves words of knowledge, encouragement, or prophecy. Some people want a sign from God, some have never expected one and may be in for a surprise.

And (last point)…

  • Some people must be asked what they want

This is always difficult. What will they ask for? Can I or a group provide this? Yet Jesus asked the man at the well, “What do you want me to do for you?” (Luke 18:41). If you are praying to give, you must accept that there may be times where God will not tell you what to give and you must ask the individual what they want.

Final thoughts:

  • Common needs:
    • prayer
    • groceries
    • gas money
    • rent
    • funding
    • a Bible
    • car repairs
    • time
  • Uncommon needs (that would be fun to give):
    • expensive outdoor gear
    • cell phones
    • job connections
    • Legos (I have thought about giving people Lego mini-figures designed to look like them, but I have to keep my stock fresh, so I’d have to actually order the pieces before giving them away 🙂 )

The Power of Cash Position

My cell phone bricked itself this morning. Just completely shat itself out. Coma-inducing diarrhea. One moment it was running just fine, the next it was black-screened, and after several half-successful attempts to turn it back on, the damage seemed final. It even feels slightly lighter now, like its soul has leapt from its fleshly bonds to wander the ethereal plains.

Like most Westerners, I freaked out a bit. With no land line, how was I going to communicate with people? And what if I was involved in an accident while driving?

I felt silly, of course. It’s one thing to know that you are too dependent on the internet; it’s another thing to actually combat that fear when “disaster” strikes. I keep an old flip phone on hand for emergency calls, so I powered that for a bit and took it with me on a great quest to find a new phone.

What was most tragic about today was that I found myself having to spend money. Rage! One day your cell phone is working just fine and you think you’ll have it for several more years, and the next minute it’s dead and you are forced back into consumerism. Hmph! What’s more, my old crappy laptop is on the verge of death as well and is probably not worth the new battery it might take to get it to charge higher than 55%.

I had been thinking about splurging on a new laptop. My work computer is a high-end Dell that probably runs around $2k, so although I didn’t want to spend that much, the thought of going >$1k definitely occurred to me. Go big or go home, you know? Nothing beats a laptop that can handle several instances of Visual Studio and several databases at once, and do it all in style.

And yet, it’s hard to spend that much money when really all you do is program, store some stuff, and surf the web. Spend $1500 on a computer when my Roth IRA still isn’t maxed out? Puh-lease.

(Bear with me, there is a point to all this.)

Not wanting to spend $700 on a Pixel 2, I managed to find one last original Pixel at a large, local electronics store. They price matched from $380 to $320 thanks to the Pixel being old and better deals existing online. They didn’t exactly search for the best deals, but they did fine one and honored their match. Also, I found a refurbished, slightly older version of my work computer for $300, and it’s freaking sweet. I’m typing on it right now. It’s silver, and has an i5, and if I need to upgrade I can buy the i7 for this socket for $50 on ebay, and it runs Visual Studio smoothly and doesn’t sound like it’s going to croak and…and…I could keep talking about it. Cha-ching, money-saver! I got home, popped my sim card into the Pixel and was back in business.

So what I first want to talk about is the power of cash position. By ‘cash position’, I mean having cash on hand that you can spend. Although I preach investing your money, it’s really not wise to do so before you have a strong cash position. Dave Ramsey’s 7 baby steps start out with #1 being to have $1000 saved for an emergency fund. Step #3 is fully funding this to 3-6 months of your expenses. This I think is great. I also think this is extremely important because most people simply do not save money at all, sometimes because they can’t but usually because they won’t. But for me, because security is so important, I almost have an emergency fund for my emergency fund. Fighting against this instinct, I have been saving into a “Personal Development” savings account that functions as an “Opportunity Fund” for expensive things I may want that fall outside of my budget.

I was at first terrified that I would buy the phone at full price and buy a pricey Dell laptop too, which would wipe-out my Opportunity Fund. I’m planning to visit my sister and her family next month. I also want to go to Nepal maybe next Spring in 2019. How could I wipe out my Opportunity Fund in one go like this? What if I were laid-off and didn’t get a chance to rebuild it for awhile?

Well, that’s the power of having a good cash position. When your phone dies, you buy a new phone. When your laptop sucks, you buy a new laptop. These are really not emergencies, but they are worth saving up for. When you want to visit your family, you make plans and go fly to see your family. Don’t sell investments to do this; have cash on hand for these things.

Now, my frugal instincts did kick in and saved me a ton of money. But that it took me so long to do something like replace my crappy laptop is perhaps to my shame. That I have put so little into my Opportunity Fund ($2k) compared to my retirement accounts (about $30k) is possibly not the best way to go through life. You should build a good emergency fund first, but after that, do save a little for yourself. I personally think I could have gotten a better deal on the phone if I had calmed down and waited a week for an online purchase to arrive. But sometimes fear does take over, and having the cash on hand can be really nice. Within 3 hours postmortem, I had a working phone up and running. This was a huge relief to me. I’m also super excited I don’t have to program exclusively on my work laptop anymore. $700 is a lot of money, but it’s not so bad when you have saved up the money to spend. For the record, I recently saved $700 by dropping the Hebrew class I mentioned in my last post 😉 . I am sure glad I did not spend the money on that. I might write sometime about what I have learned trying to distinguish wasteful spending from good satisfying spending.

Anyway, be frugal but have money to spend. Don’t be a tool like me and lose your mind because you have to spend money. Life costs; deal with it.

Dream Interpretation and Hebrew

The Background

Dream interpretation is definitely a more charismatic topic in Christianity. Most of the churches I have been to have ignored the subject entirely, perhaps tacitly admitting that God spoke to people in the Bible through dreams, but largely ignoring the possibility that God still does this.

For less than a year now I’ve been a part of a church that believes God speaks to us through dreams, and the interpretation groups I have attended have really opened my eyes to how dreams so frequently point us toward God if we are willing to listen.

You have to realize that in my late teens and early twenties, I struggled tremendously with believing Christianity. When the leaders in my youth group couldn’t answer my desperate questions, I set off on my own to find answers and even walked away from church attendance entirely for about two years. I had learned that the ancient world could actually be studied and that this would shed light on the Bible, so I poured myself into study: the history, archaeology, and languages of the ancient world. These subjects were fascinating, but those years were terribly lonely.

Now, dreams had a large role to play in me abandoning this quest. This is a very long story, the bulk of which I will not discuss here. Let’s just say that you can only wake up praying in a language you don’t understand and crying your eyes out after so many vivid and spiritual dreams before you realize that God just is, and that he speaks to us. The pressure I had placed on myself to study those subjects was so great that one day I was looking up at my bookshelf and I heard the still-small voice say, “What if you just got rid of these?” Within a month they were all gone.

Hebrew

Flash forward to 2018. At the beginning of the summer, thanks to a heads-up from a friend, I discovered that the local seminary was offering a Hebrew class in the evenings. It was even on a day that I was free! Sure, I had studied Latin, Greek, Middle Egyptian, and various bits of cuneiform script, but I had never actually gotten to take a Hebrew class. This was perfect!

There was just one small problem: I hate school. Over the past decade plus, I’ve managed to turn any subject that interests me into an obligation. Last year, I took a 10-session, non-credit Conversational Chinese class at the local community college. Asia is the only continent I would actually pay serious money to visit, and I thought, “Gee, this may be the only chance I get to take this class, and it couldn’t hurt to be familiar with the language of the politically-dominant country over there, could it?” Sure, until session #4, when I was already tired of studying. I pushed through to the end, but it was grueling.

So I have been worried about this Hebrew class. It is 16 weeks, is graduate-level, and costs a lot to take (~$700 total). It is very easy for me to want to know something, but it is sometimes very difficult putting the effort into learning it. I have been praying that God would tell me whether this class is something I should audit or not. There is still a lot to learn for my career, and Hebrew does nothing to contribute to this, and I have desperately needed a season of rest.

So two nights ago, I had a dream.

The Dream

In this dream, I was in an old location. I was on the second floor of a large wooden building, sort of like a house. There were a few old people, many mysteries, a monster, some sort of forbidden room, a large old balcony, and danger. It was incredibly fun. The clearest thing I remember was being on this huge patio out back, where I found an antique pistol. I was like, “Sweet!” and went to shoot it off into the air, but the bullet just slid out when I angled it down. See, I had forgotten the black powder. The bullet was modern, was not rusted, didn’t have a primer, and seemed to be made of solid gold, but had a dent on its side. I held onto the gun and kept going about the dream.

You see, though, when I woke up, I could hardly remember any of the dream. I just had these brief flashes. I grew really agitated and angry. God seems to do this to me so often, where I have a complex dream and can’t remember all (or sometimes any) of it. This dream felt so important. Why couldn’t I remember everything?

Now, as I’ve gone to more and more dream-interpretations sessions, I’ve learned that sometimes how we interact with the dream has something to reflect about its meaning. At the first dream interpretation session I’ve gone to, one guy had a dream that had featured violence and cutting, as with a sword. Then before the dream concluded, he woke up. This was in fact part of the dream, continuing the cutting theme. His dream was cut short! So not being able to remember a dream may actually be part of the dream’s message.

I was frustrated at God yesterday because at the end of the day I had still not remembered the key pieces to the dream. That’s when it hit me.

I had specifically been praying that God would answer my question about taking this Hebrew class through a dream. The thought briefly crossed my mind when I woke up, but I ignored it because what do Hebrew and guns have in common? But you have to realize that my love of archaeology and history is represented by that location. It was old and made of old boards, like in the late 1800s. It had all these themes that really make me come alive. But it was a faded dream, one I could barely remember.

In fact, studying the ancient world is a faded dream of mine, the excitement for which I can barely remember. That antique pistol? You can still kill a man with that; it still has potency. In the same way, Hebrew may be ancient, but it still has potency. It can help you study the Old Testament, can potentially even bring you closer to God if you use it right. But I was lacking spark, or motivation. Just like Hebrew, it would become a cool item to set on the shelf, but without that black powder it really had no power in my life. And that gold bullet? Think of gold as symbolic for money. It was dented on its side, and this class will put a dent in my wallet if I take it. This is wordplay, a common theme in dreams.

I don’t believe God is telling me I can’t take this class. But I think he’s warning me. “This may be cool but it isn’t useful right now”. The passion I once had for this subject has faded. It’s going to cost a lot, and I know it’s going to take up a lot of my time. I don’t think I really want to take this class.

I have one more thing to say on this. I desperately need a season of rest. I have always been studying, always learning. Some of this has been good, most of this has been bad. When I am lonely, study feels worthless. I really care more about people than knowledge, but I spent so many years trying to believe otherwise. The more I have to read, the less time I spend with people. This has always, always been the case. Also, I want to get into better shape, and the more I have to read, the less time I spend being active. This has always, always been the case. The more I have to read, the less sleep I get. This has always, always been the case.

I was going to go to the dream group last night, but this incredible drowsiness overtook me and I ended up napping for two hours. I believe this happened for a reason: I need this next season to be a season of rest if I want to focus on what matters most in my life right now.

Conclusion

It kills me, it really does, but I’m going to drop that class. I think God has put the love of archaeology and history in me for a reason, but whatever that reason may be, now is not the time to focus on those things. And obviously, the whole point of this blog is to talk about money and what God is doing in my life through that. Very recently God has brought to my attention some great opportunities for giving that I’m really excited about. But to stay on this trajectory, I’ve got to be focused on the things that push me forward in my software development. I can’t be committing huge chunks of time to things like this. I need to be resting more in general, but even dedicating an equivalent amount of time to studying the technologies I need to know will put me miles ahead of where I am now.

You have to focus on what’s in front of you, not what’s behind. Someday, when it’s appropriate, I may get to travel back.