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Aug 31

Deferring Expenses

Posted by: Steve Marr

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Sometimes it is necessary to defer expenses.  However, this procrastination can create a larger problem in your future. 

Chicago is an example. Chicago owes nearly $24 billion, mostly in future city pension liabilities. This equals about $8,800 per city resident. The full story is available here.

Long ago king Solomon wrote, “Through laziness, the rafters sag; because of idle hands, the house leaks.” (Ecclesiastes 10:18, NIV) I apply this principle in a number of ways.  Chicago has refused to place these liabilities for residents to see and understand. Now they need to address them through default or higher taxes. Past headlines remind us that unfunded city worker pensions were a major contributor to Detroit filing for bankruptcy.


I provided advice to a ministry in the past. One of the issues I noticed was that the parking lot needed repair. If they didn’t address them, these repairs would increase as the asphalt deteriorated. Building maintenance was also a problem because they had deferred so many items.  When I pointed these items out to the CEO his response was, “Well you know our budgets are pretty tight. We needed to defer these expenses to continue paying our staff.”

I reminded him that I had shared ideas about reducing their operating costs. I was concerned because they weren’t taking the suggested steps to reduce operational expense and address weak staff performance. It was clear that they did not have the money to fix the building and repair the parking lot. I told them that the sooner they reduced operating costs, the sooner they could put money aside to address the building. While I understood that they would rather not address staff issues, refusing to would limit their ability for building repairs that could become crisis issues sooner rather than later.

Early farmers understood that they needed to save seed from each year’s crops so they could plant them the following spring. A family would go hungry before they would eat the seed corn because they understood that if they did, they would have nothing to plant in the future. Then, the family would confront deep hunger.

When you choose to defer expenses for whatever reason, you need to understand that ultimately you have to pay.  And sometimes you have to pay more. 

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