Finances That Glorify God Part 2: The Bible on Debt

1. Finances That Glorify God Part 2: The Bible on Debt Proverbs 22:7

2. Proverbs 22:7 • The rich rules over the poor, And the borrower becomes the lender’s slave

3. Why even talk about debt? • Hebrews 12:1 • “Therefore we also, since we are surrounded by so great a cloud of witnesses, let us lay aside every weight, and the sin which so easily ensnares us, and let us run with endurance the race that is set before us” • Debt isn’t a salvation issue • But the way we view money is a spiritual issue • No one who is financially bound can be spiritually free

4. Why even talk about debt? • A man walks into a bank and deposits $500 with the banker • The parable of the talents – Matthew 25:14-30 • We are stewards of God’s money!

5. Debt & Bankruptcy Statistics • 90 % of Americans live in debt • 70 % of Americans live paycheck to paycheck • The average person in America is three weeks away from bankruptcy! • 2007 average family’s credit card debt is $9,800 • Average interest rate is 19% • 80 % of graduating college seniors leave college with credit card debt • 69 % of bankruptcy filers say the main reason was credit cards • 19 % of bankruptcy filers are college students

6. Saving & Retirement Statistics • 56 % of Americans don’t systematically prepare for retirement by investing • The average American saves only 4% of his income • The average European saves 16% • The average Japanese person 25% • Of people making $35,000 per year • 40 % say the best way to have $500,000 at retirement the Lottery

7. Financial Debt • What Is Debt? • Debt is something owed • God doesn't say we can't borrow, but He warns against surety – debt without a sure way to repay • Proverbs 11:15 - He who is surety for a stranger will suffer, But one who hates being surety is secure • If collateral is used to cover the balance owed in case of default, then the loan isn't surety • But most debt in America is surety – with inadequate collateral to satisfy the loan agreement

8. Causes of Financial Debt • No training • Most people aren't trained to handle money

9. Causes of Financial Debt • No training • Indulgence • If you want it, get it, you deserve it – if you haven't the money, charge it • The concept of saving to buy something is almost unknown! • Like the Prodigal Son in Luke 15 • People want everything now, even when they can’t afford it • They go into debt to meet their desire for stuff

10. Causes of Financial Debt • No training • Indulgence • Poor planning • No written plan that monitors income versus expense – you will eventually have financial troubles • Not planning for hard times • Many get into debt because they act as if hard times are not a possibility • Some spend like there is no tomorrow and do not set aside anything for a rainy day. • Economic conditions and life circumstances change • Proverbs 27:1 - "Boast not of tomorrow, for you don’t know what tomorrow will bring."

11. Causes of Financial Debt • No training • Indulgence • Poor planning • No written plan that monitors income versus expense – you will eventually have financial troubles • Not planning for hard times • Spending more than resources allow • Ecclesiastes 5:11 - "The more you have the more you spend, right up to the limits of your income, so what is the advantage of wealth except to watch it as it runs through your fingers." • When people spend beyond their limits they use debt to fill in the gaps

12. Signs That Debt Is a Problem • In order to battle debt people need to acknowledge the bondage of debt • The Bible says that when we admit our problems we begin to release the bondage they have on us • Rick Warren gives 6 indicators that you have a problem with debt

13. Signs That Debt Is a Problem • You are living on credit instead of paying cash • If you have to depend on credit cards each month to maintain your lifestyle you’re in trouble with debt

14. Signs That Debt Is a Problem • You are living on credit instead of paying cash • You are delaying payments or paying the minimum you owe • If you’re missing payments or making late payments or if you find yourself bouncing checks or withdrawing money out of savings reserve to pay for today’s bills then you are struggling with debt

15. Signs That Debt Is a Problem • You are living on credit instead of paying cash • You are delaying payments or paying the minimum you owe • Your debt is more than 20 percent of your net monthly income • You are probably not going to be able to make your monthly payments in the long run • You need to reduce your debt load

16. Signs That Debt Is a Problem • You are living on credit instead of paying cash • You are delaying payments or paying the minimum you owe • Your debt is more than 20 percent of your net monthly income • You are unable to tithe or save • If you’re not saving any money and if you’re not giving back to God, that is a sign you’re spending too much!

17. Signs That Debt Is a Problem • You are living on credit instead of paying cash • You are delaying payments or paying the minimum you owe • Your debt is more than 20 percent of your net monthly income • You are unable to tithe or save • You spend money on extravagant items • Having expensive taste that you can’t afford is a sign that you are vulnerable to debt

18. Signs That Debt Is a Problem • You are living on credit instead of paying cash • You are delaying payments or paying the minimum you owe • Your debt is more than 20 percent of your net monthly income • You are unable to tithe or save • You spend money on extravagant items • You are always looking for get rich quick ideas • You are probably already in debt or on the verge of it • Proverbs 21:5 "Steady plodding brings prosperity but hasty speculation brings poverty"

19. Get Rich Quick Ideas • Texas has a whole system based on our desire to get rich quick • “The Texas Lottery” • The lottery fills this idea that you never know—you might win, you might get millions of dollars! • There are TV shows about the lottery • They put the stories of the lottery winners in the newspapers

20. Get Rich Quick Ideas • There is a word for one who plays the lottery • “Loser” • 99.9999999% of the people who play the lottery, lose! • People who play the lottery regularly owe more than four times the average person • Lottery players with annual incomes of less than $10,000 spend more on lottery tickets ($597 per year) than any other income group! • People like the idea of “something for nothing” • They believe there is going to be something to get them out of the bondage overnight • But it’s just not true!

21. Borrowing • Is It Okay to Borrow? • Being debt free is God's plan for His people • It is not unbiblical to borrow money for a home, or otherwise • Virtually every reference to borrowing is a warning

22. Borrowing • Three specific cautions about borrowing in God’s Word: • All borrowing should be short-term • Deuteronomy 15:1–11 • Borrowers should not sign surety • Borrowing beyond the limits of secured collateral • Proverbs 6:1-5 • Borrowing should be uncommon • Versus what we see today! • Deuteronomy 15:1–11; Proverbs 22:7

23. Borrowing • We are not prohibited from borrowing • It is not a positive witness to borrow money when so many of God’s people are deeply in debt • On average, Christians pay 400 to 500 percent more in interest per year than they give to God’s work • The church should be leading people out of debt, not into it • There are no examples in Scripture of God ever telling people to do something and then directing them to borrow the money to do it

24. Avoiding High Interest Payments • We live in a world where the entire economy depends on debt • How many new automobiles would dealers sell if there were no car loans? Not very many! • We live in a world that is addicted to debt, but you needn't be • The Bible makes it clear that the instant you become a debtor, you also become a servant to the lender (Proverbs 22:7)

25. Avoiding High Interest Payments • Pay your credit card balances off every month • If you can‘t, put your credit cards away and don't use them again until they are paid off completely • Never buy consumer goods such as food, clothes, furniture, or electronics on credit • Don't rent furniture or electronics on "rent to own" plans • If you absolutely must borrow money to purchase a car • Buy a good, safe, inexpensive used car that you can pay off quickly • Debt has a few good uses and many bad ones, so beware! • Remember that with borrowed money, less is usually much more!

26. Simple Rules for Borrowing Money • Never borrow money without giving it prayerful consideration • There is something that is worse than borrowing • Cosigning! • If you're thinking about cosigning someone else's note, remember that once you sign your name to the dotted line, your liability is very real • If you are about to cosign someone else's loan, follow this very simple advice: Don't do it! • Proverbs 22:26-27 • 26 Do not be one of those who shakes hands in a pledge, One of those who is surety for debts; 27 If you have nothing with which to pay, Why should he take away your bed from under you?

27. Simple Rules for Borrowing Money • Don't borrow money to buy goods that will go down in value • John Maxwell “Having money may not make people happy, but owing money is sure to make them miserable” • When you borrow money to purchase a home, be conservative • When you follow these guidelines, you'll not only improve your financial fitness; you'll also sleep better at night • Dave Ramsey “Too many people buy things on the "lay awake" plan”

28. Getting Out of Debt • The Bible’s Warnings • Proverbs 22:3 • “The prudent sees the evil and hides himself, but the naïve go on, and are punished for it” • 1 Corinthians 7:23 • “You are bought with a price so don’t be the servants of men" • Proverbs 22:7 • "The borrower is a servant to the lender" • Romans 13:8 • “Owe no man anything except to love one another. . . ” • The Bible does not prohibit borrowing money, but it does give special warning against letting debt get out of hand! • God does not want us to be a servant or slave to anything but Him • Be wary of allowing anything to keep us from being free to do whatever God wants do in our lives

29. The Bible’s Principles for Financial Freedom • Give to God first • The tithe from your gross income • Matthew 6:33 “But seek first the Kingdom of God and His righteousness” • When planning to get out of debt, START BY GIVING TO GOD! • The main problem behind debt is spiritual, our priorities are wrong and we need to involve God • Even if you can’t see how you can give to God, do it - take a step of faith • Malachi 3 tell us that when we give back to God he blesses us and if we want out of debt we are going to need God’s blessing more than anything

30. The Bible’s Principles for Financial Freedom • Give to God first • Stop borrowing • This means credit cards, loans from banks or family – all consumer credit • Jesus said if you have something causing you to sin, cut it off

31. The Bible’s Principles for Financial Freedom • Give to God first • Stop borrowing • Develop a balanced budget • The primary tool for managing family money

32. The Bible’s Principles for Financial Freedom • Give to God first • Stop borrowing • Develop a balanced budget • Develop a pay-back plan with creditors

33. A Pay-back Plan • Develop a repayment plan • The Bible commands us to pay back all our debts • Psalm 37:21 - "The wicked borrow and do not repay" • Sell Assets • Larger items - cars, motorcycles, entertainment systems, computers, investments, and homes • The first way to scale down debt • Determine what you can do without • 2 Kings 4:7 "Go sell the oil and pay the debt, and live on the rest" • Make Double Payments • Cut expenses in other areas of your budget • Sacrifice and discipline • Use Savings To Pay Off Debt • Wisdom! Savings in a bank account earning 1% to pay off debts at 18% interest • As soon as you pay off your debt begin to replenish your savings

34. The Bible’s Principles for Financial Freedom • Give to God first • Stop borrowing • Develop a balanced budget • Develop a pay-back plan with creditors • Learn to trust God • God knows what you need, so begin to trust Him – wait for God's provision • Philippians 4:19 And my God will supply all your needs according to His riches in glory in Christ Jesus

35. The Bible’s Principles for Financial Freedom • Give to God first • Stop borrowing • Develop a balanced budget • Develop a pay-back plan with creditors • Learn to trust God • Don’t Quit • The best time to make any improvements is right now • Make a commitment today and then don’t quit • Galatians 6:9 "Let us not get tired of doing what is right, for after a while we will reap a harvest of blessing if we don’t give up"

36. The Bible’s Principles for Financial Freedom • Exercise Self-Discipline • Curb impulses to buy - If it isn't budgeted, don't buy it • Ben Franklin “It is better to go to bed supper-less than rise in debt” • Old depression era saying - “Use it up, wear it out; make it do, or do without”

37. The Bible’s Principles for Financial Freedom • Exercise Self-Discipline • Seek wise counsel • You may need help to establish and maintain a budget and work with creditors • Determine Where You Are • Getting out of debt requires knowing the total amount of the debt you owe • Write out everything you owe • Proverbs 27:34 "Know the state of your affairs and watch your business interests closely"

38. The Bible’s Principles for Financial Freedom • Exercise Self-Discipline • Seek wise counsel • Determine Where You Are • Rely on God's Word • Base financial decisions on the principles of God's Word, not the world's advice • If you are in debt, you're bound to creditors and not free to serve God to the utmost • Decide now to get out of debt and stay out • With God's help and your discipline, you can become debt free and stay that way