Financial Literacy: Controlling Consumption

In November, we looked at the least discussed key to financial success—our personal productivity. Now it's time to look at the most common reason for financial failure—excess personal consumption.

What to buy?

In many ways, unbridled consumption is the hallmark of our age. We are being fed the lie that more stuff brings more happiness. False! Jesus warns us, “Beware and be on your guard against every form of greed, for not even when one has an abundance does his life consist of his possessions.”¹

I remember hearing about a Hollywood celebrity undergoing a nasty divorce and telling the judge that she could not possibly live on less than $50,000 per month. Anything less would make her poor and miserable. On her lifestyle, her poverty line was $1,640 per day. According to the World Bank, the 2022 global poverty line is $2.15 per day. Was the Hollywood celebrity wrong and the World Bank right? Is there an absolute, universal poverty line in God’s book? I believe the answer is yes, and it’s well below the Hollywood level.

The Bible tells us to “be content with what we have because God has said, ‘Never will I leave you; never will I forsake you.’”² Most of us find it very easy to be discontent, even with what we already have. The Bible also says, “If we have food and covering, with these we shall be content.”³ Now that is simple and clear but not easy to follow. Being above the poverty line is having one’s daily requirement of food and covering satisfied.

I am not suggesting that we should all live at this subsistence level but simply making the point that God has a universal benchmark for the measurement of personal wealth. By this standard most Canadians are rich; we have much more than just food and clothing.

Jesus also speaks of food and clothing as our essential needs, citing God’s supply for birds and flowers. In the Lord’s Prayer, the only material item Jesus instructs us to pray for is our daily bread.⁴

In Proverbs 30:7-9, we are advised to ask for only enough food for the day. It warns against having too little, lest we be tempted to steal, or having too much, lest we forget our dependence on God.

If we can seek to be emotionally content at this level, we can obtain full freedom from consumerism. Compared with the rest of the world and past generations, three meals a day is luxury. Canadians desperately need a refresher course in separating needs from wants.

Prioritized Spending

I have designed a budgeting system based on essentials of food and covering.  I call it Bulls-Eye Budgeting. It forms concentric target circles nesting food, clothing, shelter, transportation, and “other” with a mysterious black hole in the middle. This sequence also applies to supporting assets. For example, a good stove is more important than a good washing machine and a good washing machine is more important than a fancy house. Cars come next, and the outside ring can be filled with non-essential extras. Read more about Bulls-Eye Budgeting.

How to Pay?

Payment method is more important than you might think. We all know that cash is cumbersome, but it’s better than trading cash than chickens. For the last 50 years, the financial industry has been making payment increasingly convenient and less cash intensive but is there another side to the “coin.” Let’s look at two drawbacks to electronic payment, especially at the retail level: easy overspending and less control.

Easy Overspending

Most of us are unaware that we tend to spend more when we pay with a credit card rather than with a debit card. In my research of 25 years as a financial planner, I was shocked to learn that credit spending is about 30% higher than debit spending. We spend less when we pay with cold hard cash. Even the credit card perks with their cashbacks are sneaky and sinister. They conflate spending with saving. Imagine having to spend more money to save more money. Bizarre! Also, they subtly seduce us to presume upon the future⁵. Really, we don’t know what even one day in the future will bring⁶. View the Ramsey analysis for a great comparison of debit and credit card buying.

It is easy to use a credit card because it can be used almost anywhere. This makes you more susceptible to impulse buying and overspending because it is easy. Debit and cash are less susceptible because you cannot use it everywhere—such as the internet, where much spending is done nowadays. Although the debit option is being introduced on the internet, typically to use debit or cash you must purchase something in person.

Less Control

What we gain in convenience, we lose in control. When shopping in person, it is easier and faster to take back some cash in our hands than to reverse most electronic transactions.

Our love for convenient payment is making us more vulnerable to someone else easily confiscating our wealth just like what Ottawa did to those who supported the trucker “Freedom Convoy” about one year ago in early 2022. Communist China and North Korea are examples of jurisdictions of governments seizing financial assets of those in political opposition to them.

I think the globalists in Davos were angry with Canada since it tipped its hand on a money control tactic to be reserved for a future date. I hope I am wrong, but I see our society getting conditioned to a new currency: a global currency. Watch out for aggressive promotion of faster payment and financial processing. Such new conveniences we just don’t need.

The tech giant Apple is becoming more and more like a bank. E-commerce is very convenient but be careful. It is also very easy to lose privacy and personal autonomy. I believe we are being conditioned into unthinking compliance—like wearing a mask when you are alone in a car.

Consciously or unconsciously, we are setting ourselves up or perhaps being set up to have our finances controlled by a centralized power. This is clearly happening in Communist China where the Communist Party has tight control on everyone’s bank accounts, cell phone, media consumption, and internet—for their security and safety of course. Most are aware of China’s Social Credit Score System. It started in China as financial credit ratings in the 1980s. Now, digitization and centralization of currency invites absolute power—good or bad. It’s not a big step from electronic digital currency on a piece of plastic in our wallet to a microchip on our hand, like what is used in Sweden and being praised for multiple conveniences. Some are predicting the fulfillment of prophecies.

"He [the beast] causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name." -- Rev. 13:16-17 NKJV

Of course, cash payment is clunky, but it sure makes us brutally aware of how much we are paying. It also gives the buyer great autonomy. Sadly, the day may come when cash will no longer be accepted as legal tender.

In response to this threat of increasing control, some are seeking to live totally off the grid, alone in the wild. Being independent is not good, but seeking interdependence in community with those of shared values is very good, especially if Someone in the group has perfect wisdom and infinite resources.

Conclusion

Make no mistake, controlling consumption is not easy. In a land of physical abundance combined with moral confusion, consumption control is super difficult. To win any battle we need alertness, accurate information, wise counsel, courage, and much discipline. It helps to divide the battle into at least two components.

1.  What am I buying—a need or a want?
2.  How will I pay for this—cash (money earned) or credit (money to be earned)?
3.  What will really happen if I don’t buy this right now?

O money, money, money! I am not among those who think thee holy but how is it that thou goest out so fast, but comest in so slowly?

We in the wealthy West need to be extra alert not to abuse our luxuries or be naively led into servitude by those with godless globalists agendas. To whom much is given, much will be required.⁷ 

If you have a chance to be free, take it.⁸  

 See all of Tom’s articles in this Biblical Financial series.