Bob: This is FamilyLife Today for Tuesday, July 21. Our host is the President of FamilyLife Dennis Rainey and I’m Bob Lepine. We’re going to talk today about financial principles that will work in your marriage, in your family. They’ll work almost anywhere. Stay tuned!
Welcome to FamilyLife Today thanks for joining us. When you graduated from college; now I know this takes you back a long, long way.
Dennis: That’s right it does!
(laughter)
Bob: Did you owe anything to the loan company, to the college, to anybody? Did you graduate with any college debt?
Dennis: You know my first…
Bob: Did they even charge for college way back then? I’m sorry!
Dennis: That’s okay!
Bob: I’m sorry!
Dennis: It was okay. You know, so here’s my response. My first two years were paid for by marginal athletic ability.
(laughter)
I didn’t earn a hundred percent scholarship, but I played baseball, and basketball in junior college, and by the time I got to my second semester of my sophomore year in junior college, I was on a full ride.
Bob: Is that right?
Dennis: That’s right!
Bob: Your Mom and Dad didn’t hand you a big wad of money
Dennis: No!
Bob: And say here’s your college money.
Dennis: No, in fact I had to get a job to supply the entertainment money, the ability to go on dates, etc.
Bob: You were on your own?
Dennis: I was on my own! For my last two years in college, when I went to the University of Arkansas, they did help a little bit at that point with the tuition.
Bob: Your Mom and Dad did?
Dennis: Yes, that’s right, and I also supplemented with some earned cash due to a job
Bob: Right!
Dennis: And that’s how I made it through without borrowing any money. What about you?
Bob: I got through without owing any money, thanks to Mom and Dad.
Dennis: Yeah!
Bob: I mean it was basically their kindness that made it possible for me to go to college.
Dennis: And so, what have you done with your kids? Have you encouraged your kids to go to college where they might have to go into debt?
Bob: We’ve set aside some money for education for our kids: for a higher education. We have said this is how much you’ve got. This amount. You can decide how you want to allocate that amount.
Dennis: So if they want to go to a more expensive school, they can choose to do that, and then they could choose to go into debt to do it?
Bob: We’ve never had to have that conversation, because we have just said to them “We think that would be an unwise choice to make – we would rather see you get an education you can afford than to go into debt.” Although, I know some parents, I’m thinking of folks
Dennis: Yes- that’s right!
Bob: Who’ve got a really bright young son or daughter who could get accepted into one of the big ones, one of the colleges where you think boy, it might cost a 150,000 dollars over four years, but they will be set when they get a degree with that. So, maybe we should go into debt rather than them going free to the state college, because their grades could get them in for free. They are facing that dilemma and trying to figure out what’s the better choice.
Dennis: Yes, and I want to find out what our guest on today’s broadcast did? He had five children. He and his wife Judy live in Atlanta. Ron Blue joins us again on FamilyLife Today. Ron, welcome back!
Ron: Delighted to be here!
Dennis: He is the president of Kingdom Advisors, and you would think someone who is advising other people around their money would know what to do when it comes to the subject of borrowing money to go to college. How did you handle this issue with your five children?
Ron: Well, none of our children had to borrow. We had provided for their education like Bob had. I’ve developed some strong convictions on it because I’ve counseled thousands of people in this area. I think that a college education is almost like a wedding. I have a right to this: I have a right to this college education.
I personally believe, and I’ve worked on Wall Street, and worked on Main Street, that where you get your education only has significance in your first job. If I wanted to go to work on Wall Street, then maybe I needed to go to an eastern school, but what you did Dennis, going to a junior college on an athletic scholarship
Dennis: Yes.
Ron: I think junior college’s, community colleges you don’t need to pay for that education, because what really makes a difference is how much you put into the education and then what you put into your jobs. So, I would almost never counsel somebody to borrow to go to college. Just the illustration you used Bob on the 150,000 dollars, it’s really hard to make the numbers work on that. You can improve yourself so much economically that you can really justify having spent that kind of money?
Bob: Yes.
Ron: I can’t imagine that! One of my sons teaches at a private Christian school. Tuition there for kindergarten is 18,000 dollars.
Bob: Wow!
Ron: I can’t imagine! That’s 18,000 dollars after tax.
Dennis: Now Ron, you know right now there are listeners bristling at what you are saying because education to them is a high value.
Ron: Yes!
Dennis: And they want their son or daughter, or both perhaps to have the very finest education possible.
Ron: Right!
Dennis: So, they want their children to go to the prestigious Ivy League school or maybe the west coast school.
Bob: The prep school
Dennis: Yes!
Bob: Or the kindergarten where your son teaches.
Ron: Right – right!
Dennis: So, how should they look at that?
Ron: You have to ask yourself what am I really buying here, and if I’m going to buy that can I afford it, or do I need to give up something someplace else? I don’t have an argument with somebody that wants to spend that kind of money as long as they don’t go into debt to do that.
That’s in their value system it’s a priority with them. I wouldn’t argue with them on it, but I would sure ask them to ask themselves the question whether there is really value there. I know I would get strong opinions back on it.
Dennis: So husbands and wives really need to hammer on this issue.
Ron: Absolutely
Dennis: as a couple, and make sure they are one. I happen to know how much it costs to become a doctor.
(laughter)
Bob: That’s exactly what I was thinking!
Dennis: I have a son-in-law who is an obstetrician.
Bob: Is it even possible for somebody today to become a doctor without going into debt?
Ron: Well you know when they get to medical school and whatever specialty that they’ve chosen they might be able to justify the numbers there, because what they are really doing is deferring the cost of that to when they have the income for it. They know with pretty much certainty what they are going to make.
I wouldn’t consider college education as a right. It should be a privilege. It’s kind of like owning a home. It’s a privilege. So much of in our society today, we have things defined as a right. Just talking about weddings – I told my kids, your Mom and I spent 300 bucks to get married. She bought a used wedding gown, and we had a reception in the church, and we sent out announcements. So, I said “You can spend at least that much on your wedding”!
(laughter)
Dennis: I’m sure that went over really big!
Bob: You sound like one of those guys who said, “When I was a boy
(laughter)
Ron: That’s right – I know!
Bob: We did things this way. Think about not even weddings, honeymoons.
Ron: Right!
Bob: Here’s a couple that’s saying “We’ve got one shot on our honeymoon, shouldn’t we go ahead and borrow some money so we can go ahead and have a nice Hawaii eight days, seven nights on the islands to start our marriage. Isn’t that a good thing to do?
Ron: Do you have the cash to pay for it?
(laugh)
Bob: Well no, we’re going to borrow for it. We’ll pay it back though!
Ron: Well, I had a great honeymoon. We went to a hotel in Cincinnati. We drove from Indianapolis to Cincinnati. We had a weekend honeymoon. I remember it as a pretty special time!
(laughter)
Bob: Yes.
Dennis: But, you know, your reality really gets skewed, because of how things have escalated. I mean we’ve raced ahead from college to the wedding to the honeymoon. You go all the way back into how kids are celebrating prom.
Ron: Yes- sure!
Dennis: Stretch limos…
Ron: Yes.
Dennis: Spending five hundred to a thousand dollars on a prom for a kid is really nothing, in some of the areas of the country. Where’s the plumb line here?
Ron: Right!
Dennis: Where’s the parental guidance because they may be creating an appetite for these matters later on in their kids that they want to be careful about creating.
Bob: There are a lot of parents who are listening to us who are saying “I’d never spend a thousand dollars for my kids to go to prom, but to borrow money for my kids to go to college that does seem like a different value decision. Or to borrow money so that the wedding can be all that my kids had hoped it would be. Now there may be more of a close parallel between your prom example and how lavish the wedding is.
Ron: You know, that’s a really good point Bob. I think a lot of parents its kind of like use sports. You live out your life through your children through the sports and through the college they go to, and what the wedding looks like. I see that happening a lot!
Bob: Let’s say your son comes home from college, and you’ve done just exactly what you’ve done. You say, “Here’s how much you have.” He goes, he’s going to graduate debt free, but guess what, he’s in love and the young woman he’s in love with, she’s not going to graduate debt free. She’s going to graduate with some student loans,
Ron: Right!
Bob: And, with some credit card debt. But they’re in love!
Ron: They’re in love. I understand that, and I’ve been in love also. For 44 years!
(laugh)
I think a point that Dennis asked earlier that we’ve never really come back. Where does a young couple start, and I think before the wedding they start with having a conversation. A transparent conversation on do you have any debt, what are your spending habits?
Knowing something about each other, that’s not for a judgment, but it’s for communication issue because you will have conflict over money if you haven’t talked about it ahead of time!
Dennis: It may be that as a result of the conversation – now this almost sounds like heresy here on FamilyLife Today, but it may be that as a result of the conversation that you delay the wedding.
Ron: Absolutely!
Dennis: So that you can pay off debt!
Ron: Yes!
Dennis: Now, you talk about something that is counter cultural today to this generation that is coming up in this materialistic age to delay gratification.
Ron: Right!
Dennis: By paying off debt.
Ron: That’s un-American!
Dennis: It really seems that way – you know! It really does!
Bob: So, if you were in that situation where a daughter of yours is now in love with… I mean you don’t find this out on the first date how much this person is in debt – right?
Dennis: Well, I think, I think!
Bob: You think you ought to find out on the first date?
(laugh)
Dennis: No, no! That wasn’t where I was going with my answer! I was going back to what Ron said about having the honest conversation at some point. There’s where Dad does need to step in and help his daughter or his son at that point count the cost of what it means to build a marriage.
It really isn’t out of the question that a father and a mother could come alongside a young couple like this and say to them “You know you really would be much, much better off if you took the next six, twelve, eighteen months to just work hard and pay off the debt to prove that you are going to start your marriage out on the right foot because what happens if you get pregnant?”
Ron: Right!
Dennis: If at that point and it takes two incomes to pay back the debt you’ve already made your decision about child care and day care and who’s going to take care of the kids.
Ron: Yes!
Bob: If your son says to you “But Dad it’s better to marry than to burn, I read that in the Bible, and if I’m taking on another twelve to eighteen months?”
Dennis: I’d say, “Burn son”!
(laughter)
I’m kind of like Ron. I know what it was like to burn!
(laughter)
I know what it’s like to be in love! I’ve also seen a lot of marriages and families come crumbling down around this issue that Ron’s talking about here just how debt crushes and cripples young couples starting out.
Ron: You know for the conversation to be had that you mentioned – the Dad sitting down with the son or daughter there’s a lot that has to have gone on in building a relationship with that son or daughter throughout the growing up years.
Dennis: Yes – yes!
Ron: It has to be a trust relationship there, because that conversations not going to work if it’s a brand new type of conversation. We know that more is caught than taught in raising children. So, parents need to think through their value system, their decisions, and they do need to teach their children about money, but about a lot of other things. I had one of my daughters who is in her 30’s now, she said, “Dad, I just went back on the envelope system”
Dennis: Well yes!
Ron: Because I was having trouble controlling my grocery expenses and things like that so she put herself on the envelope system.
Bob: The envelope system is where you take the money at the beginning of the month and you put it in actual envelopes.
Ron: Groceries, gas, and whatever.
Bob: Wow! So she’s imposing a discipline on herself to help her stay within the bounds, right?
Ron: Yes!
Dennis: To not run past something you mentioned just a few moments ago, the model of the parents is really powerful!
Ron: Yes it is!
Dennis: I don’t recall a lot of conversations with my Dad and Mom about money. Certainly there were never any formal teaching opportunities around the envelope system.
Ron: Yes!
Dennis: My Dad was one of these no nonsense guys who didn’t borrow money to expand his business. He was very frugal. He built it one year at a time. One dollar at a time, and he ended up being modestly successful in a small town.
When I got married, I just remember going to the bank, not the literal bank, but the bank in my soul of all the deposits he had made in my life by modeling to me being a man of integrity, not being a man that was just out spending money. Now, he made some mistakes that I also noted. He bought a car one time and brought it home. My Mom was not a part of the decision, and I do remember…
(laughter)
You know, your book is called Surviving Financial Meltdown
(laughter)
I remember our home that night – there was another meltdown!
(laughter)
Except it was chilling – it was real chilly in our house. My Mom was not a happy camper about Dad buying a car without consulting her. I learned from his mistake at that point!
Ron: Right!
Dennis: I think as parents we need to realize our values are being caught by our kids whether we intend them to be caught on the plus side or the minus side, they’re there for our kids to see!
Ron: Absolutely, and that’s where they are going to learn the most! I was again on a radio program and a young man called in and he said “God’s called me to the mission field,” and so he said “I can’t afford to go to seminary without taking on debt – what would you council me?” I prayed and said “Lord give me wisdom here!”
I said “Well, I’ll tell you what if you go to seminary and you borrow money, let me ask you the question – you go into mission field - how are you going to pay that debt off?”
He said, “Well, I may have to delay going to the mission field.” I said “Didn’t God call you to the mission field?” He said, “Yes He did!” I said “Well, can you not trust Him to provide the resources for you to go to college?”
I said “I’m going to tell you something really radical, and that is if you’ve got the money to go to college for a week, go for a week. If it’s for two weeks, go for two weeks. Don’t ever go into debt to go to fulfill a calling that God has given you.” Don’t deny God an opportunity to work!”
I got a letter from him several years later, and he said let me tell you what happened.
Dennis: Yes.
Ron: You know dorm counselor part-time jobs, gifts, he graduated debt free and was able to go to the mission field right away, and he saw God’s hand. He went to the mission field a lot better prepared.
Bob: You know my kids who are out of college have come back and they never really had the expectation that there’d be any borrowing. We’d kind of taken that off the table all along, but they’ve come back since they are out of college and as they look around at the landscape they are the exception, not the rule!
Ron: Absolutely!
Dennis: Yes, yes, yes!
Bob: They have said “We are glad right now that we’re the exception: looking back on it, we are glad that we didn’t indulge for four years and try to pay it off in the early years of a marriage, and a career.”
Ron: Oh yes!
Bob: “Thank you for not opening that door or having us even consider it.”
Ron: Yes, I got a call from one of my daughters. She was a single mom for six years. She said, “Dad, I think I’m in financial trouble.” I never pro actively talked about money with the kids after they got married much, and I said ‘Well, tell me about your situation!”
She said, “Well, I’m prepaying four hundred dollars a month on my mortgage so that it will be paid off when Jack my son goes to college I’ll have the mortgage paid off – I’m putting some money into a 529 plan for him to go to college.” She said, “I’m maxing out on my 403b.” She also had a Roth IRA that she was putting money into.
(laughter)
She said, “I don’t have any credit card debt, and she said my car is paid for.” I’m saying, “Now tell me the problem?” She said, “Well, I know that I need about 20,000 dollars in savings so that I can buy a new car when I need it, but I can’t seem to get past 12,000 dollars. I know I must be doing something wrong!”
(laughter)
Dennis: Amazing!
Ron: She was at that time a 33-year-old single mom, and she did not have huge income.
Bob: Wow!
Ron: There was no windfall in that. She followed those principles Bob, and it worked. She was in a phenomenal position! She was one of really literally hundreds out of the millions that are out there.
Bob: Those principles you are talking about are the principles that are in your book. Minimize the use of debt, maintain emergency savings, think long term, spend less than you earn. That stays the same no matter what the economic environment is!
Ron: It will never change!
Dennis: Just too kind of summarize here, I can imagine someone who is listening to us saying, “Have you guys determined here that it is morally wrong to borrow to go to college?” I have an opinion on this, but I want to hear yours, because I can hear someone thinking out of this conversation we’re saying it’s wrong to borrow to go to college.
Ron: No, I’m not saying that! I think it is a matter of personal conviction. Romans 11 says, “Let each one be fully convinced in his own mind, but whatever is not of faith is sin.” I think everybody has to reach that conviction; they just need to think it through rationally.
The Bible does not say that it is wrong to borrow money. It says it is foolish, but it doesn’t say it is wrong to. So, all it says is that the wicked man borrows and does not repay. So, if I borrow money, I have to repay, and I have to think through the repayment if I’m going to borrow money. That’s all I’m saying. It’s not morally wrong to borrow to go to college, but you need to think about it.
Dennis: I would agree with that statement, and I would add this. I think the reason we’ve had this conversation today is we look at young couples who are starting out their marriages, and they are strapped with college debt, consumer debt.
Bob: Car loans!
Dennis: Yes, they’ve allowed debt to be the way they get things.
Ron: Absolutely!
Dennis: What I hear us saying here is attempting to really come alongside young married couples and coach them and say, “Look – you’re building your home, your marriage, your family in the midst of a fierce storm – there is no reason to have any erosion in the foundation as you start this thing off. If you can start it off with solid footing without a boat load of debt, than you are going to be able to withstand the storm.”
Ron: Absolutely!
Dennis: Our coaching here is just to keep people out of the ditch and to avoid an additional strain on the marriage relationship.
Bob: Yes, no matter what is going on in the national economy the more important question is what’s going on in your economy at your house and do you have a handle on your financial situation? People may hear about your book Ron, Surviving Financial Meltdown and think well, it feels like things have kind of cooled off with the nations economy, but the bigger question is what about your home? What about your debt situation? What about your families’ finances and are you ready to survive…
Ron: Right!
Bob: A potential financial meltdown in your family? We have copies of Ron’s book in our FamilyLife Today resource center. Let me encourage you to go to FamilyLifeToday.com and get more information about how to get a copy of the book.
In addition we have a book that Ron has recommended to folks for years: Larry Burkett’s Family Financial Workbook. It’s filled with worksheets for couples to use to help you get a handle on your families’ financial situation. Again both resources can be found on-line at FamilyLifeToday.com or you can call toll-free at 1-800-FLTODAY, 1-800-358-6329, that’s 1-800 F as in “family” L as in “life” and then the word TODAY. When you contact us, we’ll let you know how you can get a copy of one or both of these books.
Many of our listeners heard us earlier in the year talking about some of the financial challenges we were facing as a ministry because of what was going on in the US economy. We had a number of listeners who contacted us and said, “We want to help out” and made donations. I know for some of the folks who were donating they were making a sacrifice to help support this ministry.
We just want you to know how much we appreciate your partnership with us. Your donations are what keep us on the air on this station and on our network of stations all across the country. We could not do it without you! During the month of July, if you are able to help support the ministry of FamilyLife Today with a donation of any amount, we’d like to say thank you by sending you what we call the Five Essentials for a Thriving Marriage card.
This features counsel from Dennis and Barbara Rainey on what it takes to keep a couple anchored together, and anchored in Christ for marriage to go the distance.
This Five Essentials for a Thriving Marriage card is our gift to you when you make a donation this month of any amount. If you are donating on-line at FamilyLifeToday.com all you have to do to receive the five essentials card is type the word “thrive” in the key code box that you find on the on-line donation form, or call toll-free at 1-800-FLTODAY, 1-800-358-6329.
You can make a donation by telephone, and just ask for the thriving marriage card, or the five essentials card. Again we’re happy to send it out to you and we so much appreciate your support of this ministry both in the past and today. Thanks so much for your partnership with us!
Now, tomorrow Scott Stanley is going to join us. Scott is a college professor. He’s a researcher. And he’s going to talk to us about what couples say about financial conflict in marriage: how to avoid it, and how to resolve it when it occurs. I hope you can tune in for that.
I want to thank our engineer today Keith Lynch and our entire broadcast production team on behalf of our host Dennis Rainey I’m Bob Lepine. We will see you back next time for another edition of FamilyLife Today.
FamilyLife Today is a production of FamilyLife of Little Rock, Arkansas.
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