Stop Faking It

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Creative Commons License photo credit: Damian Morys Foto

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This is an article written by Derek Clark of Christian Common Cents. Christian Common Cents is focused on biblical solutions to financial problems, specifically getting out of debt. If you are interested please consider subscribing to the Christian Common Cents RSS feed.

Proverbs 13:7 – One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.

I don’t actually know the guy in this picture, but I do know a lot of people driving cars like his are “faking it.” They are people who have credit cards maxed out, huge car loans, and vacations from two years ago that they haven’t paid for yet. Leasing a luxury sports car and having lots of “stuff” purchased with plastic money does not make you rich or successful.

I’m not saying you can’t have nice things, but I am saying that you shouldn’t pretend to be able to afford things that can’t actually pay for yet. I’m not saying you shouldn’t take nice vacations, I just don’t want you to pay 20% interest on them. Vacations are so much nicer when you just bring back pictures and not a huge credit card bill.

I’m certainly not perfect, but I’ve worked hard to fix the mistakes I made when I was younger. When I graduated from college and got a job I thought I “needed” a newer car. I ended spending about $16,000 on a 2 year old car. At least it wasn’t completely new. Thankfully they gave me the loan without my parents co-signing, because if they hadn’t I’m sure I would have made that mistake as well. A few months later I was introduced to Dave Ramsey’s baby steps. I really wish I knew what I know now back then.

I worked hard, saved, and paid off that 5 year loan in 18 months. During that time I also paid off my college loans and became completely debt free. That was a great feeling, and I was able to save up a decent amount of money once I had no debt. I managed to pay cash for a nice engagement ring as well as a wedding ring. I also paid for a nice honeymoon and had a good emergency fund by the time we got married.

By this time I had learned my lesson. My wife didn’t have a car so I had an opportunity to make a better decision. Instead of getting a new car loan and going deeper into debt, I let her drive my nice paid for SUV. I then bought a $2500 beater for myself with cash and couldn’t be happier. My wife brought a lot of college debt into the marriage and we decided it was much more important to pay that off than have a nice car.

In eight months we have paid off $21,000 in debt, and we hope to be debt free again by June. Some of my friends think I’m really crazy. A few that are on board with Dave Ramsey still think I’m a little crazy. I take it as a compliment. Normal is broke. Common Sense was a book by Thomas Paine arguing that it was common sense for the colonies to rebel against England. Christian Common Cents is my argument that it is common sense to rebel against the “normal” way of handling money.

By not faking it we are going to be in a pretty decent financial position soon. We will have no debt other than our mortgage and few months worth of emergency fund by our first anniversary. We are also committed to paying off the mortgage as fast as we can. The lower we can get our monthly expenses the easier it will be to retire. The peace of mind that will bring will be amazing. I also truly believe in Proverbs 22:7 – The rich rule over the poor, and the borrower is servant to the lender. If you have ever been deep in debt you know that this verse is true.

Have you ever been guilty of “faking it” like I was? Have reached the point where you look at debt as servanthood? Let me know in the comments.

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Last Edited: 25th March 2010

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  1. says

    Yes, I do fake it sometimes but usually on the downside. It keeps me out of (financial) trouble. I especially enjoy budget traveling much more than top notch trips. I feel like it keeps me more to the ground and connected with people. That works for me since I like people and I like to meet people from different walks of lives.

  2. says

    I love that verse in Proverbs 13:7.

    Congrats on paying off your car early, and paying off the college loans! I also paid off my car a few months early after realizing that the interest I was paying (and therefore not saving) was keeping me from building wealth faster.

    I’ve also been introduced to Dave Ramsey through listening to “The Total Money Makeover” on audiobook. Although I don’t agree with everything he teaches, I do think he does a lot of good and makes sense in many of his concepts.
    Darren´s last post ..A Few Firsts For MORE than Finances!

  3. says

    Thanks ctreit. Budget traveling can be a ton of fun. I was just talking to a friend who went backpacking through Europe on the cheap. I would love that.

    Thanks Darren, paying off the debt is great. I can’t wait to finish the last of the student loans, it’ll just free up a lot of cash each month. Dave Ramsey is great, I don’t agree with absolutely everything, but most things.

    The few things I don’t agree with I do understand why he says what he does. For example investing, he is teaching the masses, and for the vast majority mutual funds and index funds are the right choice. I happen to really enjoy studying the market very closely, so I also have a few single stocks. But I understand where he is coming from suggesting people not invest in single stocks.
    Derek Clark´s last post ..How To Pay Off Your Mortgage Early

  4. says

    $21K in 8 months! Fantastic! I know exactly what your talking about in this post Derek! We have to much false prosperity going on the outside of us and poverty on the inside. Unfortunately you see this a lot in the church parking lot! You and your wifes story is a testimony about putting your minds to making things happen and leaving the Jones alone!
    Carlos Frank´s last post ..How to use the Free Debt Reduction Snowball Calculator from Vertex42

  5. says

    That’s a great Proverb you led with! So true! While it’s true that many (if not most) people with the flashy cars, etc. ARE faking it, I think it takes a shift in your perspective to see it as fake. Before I ‘met’ Dave Ramsey I really did think that a car payment was just a way of life. Although I understood that debt was a liability, I hadn’t yet grasped the part that borrowing to get all that stuff was FAKE. Rather, I just assumed that’s how people who had that stuff lived. Bigger paycheck, bigger toys, bigger payments.

    Probably the number one thing I’ve changed about my personal finances while getting out of debt was believing (and living) there’s another way.
    Deacon Bradley´s last post ..What Web Startups Teach Us About Winning with Money

  6. says

    Good message. I make a conscious effort to always be humble. In college I was a “broke college student”. Now I’m broke repaying my student loans. That’s what I claim, and that’s all I’ll claim. I drive a $1100 11 year old car, and spend most of my money on student loans. Sure I could use that money to buy nicer things, but getting back to your message, I’d be faking it. $15,000 car with $40,000 of debt…hmmmmm

  7. says

    @Carlos – Thanks so much. We don’t even know who the Jones are. And we don’t care. Friends and family are like “man you don’t have cable, that’s crazy you should get it” I don’t really like or watch tv. The only thing I miss at all is sports stuff.

    @Deacon I know exactly what you mean. I actually heard one of my parents say “Well you’re always gonna have a car payment” in almost the same whiny tone that Dave uses when he makes fun of that. I was like no, you don’t have to. Let me show you :-)
    Derek Clark´s last post ..How To Pay Off Your Mortgage Early

  8. says

    I live in a modest subdivision in a town home that i paid about $100K for ten years ago. To give you an idea.

    It is hilarious to me to see people living in these modest little townhomes that have Porsches and BMWs parked out front.

    Vanity with a capital V. If I ever get like that, I hope someone shoots me!

  9. says

    My biggest ‘fake it’ moment was in first 6 months of marriage…put dining room suite, sofa and couch on credit card because they were ‘on sale.’ Wrong! Living much simpler these days but not quite where you are…we’ll keep working the plan.

  10. says

    lady I work with just bought a new car, $22,000…. and bragged about getting a deal. I did not say a thing… just thought to myself “that is what I sounded like 5-6 years ago.”

    Oh, and her husband has been out of work for over a year…. this really makes the car thing a bad idea in my book.

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