IMPROVE YOUR FINANCES
Goodbye Debt
Hello
Prosperity!
By Laura Bagby
CBN.com Producer
CBN.com The
following comments echo the financial situations many people find themselves
in year after year:
"We were using credit cards to make the house payment and the car
payment. We were buying food on credit." --- Greg
Rouse
"I remember that there were times when we would get calls from the
bank and they would say, 'You need to pay this loan.' Right at that
time, that was a really dark moment." --- Orin
Baertsch
"We didn't know whom we owed or how much we owed. It was just
a black hole." --- Diane
Turner
"I had found myself in a mountain of debt." --- Jill
Haffley
The above quotes are from real people who have experienced the
painful struggle of dealing with debt. Greg Rouse lost his paycheck
and began relying heavily on plastic for day-to-day expenses. Orin Baertsch
and his wife, Janette, were facing bankruptcy after their business failed.
Diane Turner and her husband, Bill, owed on their credit cards, and
Diane was sure she would have to give up her dream of going to college.
And Jill Haffley owed $18,000 in credit card bills and with a teacher's
salary struggled to pay it back.
Fortunately, these stories don't end there. There is a happy ending
to each of these lives. Amazingly, all are now debt free!
Sound too good to be true? Would you like to know their secret? You
might be amazed to learn that all gave their way out of debt.
That's right: They learned that the secret of financial success is to
give back to the Lord.
But before examining this approach to debt relief, take a moment to
evaluate where you stand financially. How do you compare with the current
financial state of the majority of people in the United States? Are
you spending more than you are saving? Do you owe more than you earn?
THE STATE OF OUR FINANCES
How Much We Earn
The U.S. Census Bureau reports that the median income for United States
workers in 2002 was $42, 409, according to their Income in the United
States: 2002 report. This figure includes before-tax monies from
all sources.
How Much We Save
According to the Bureau of Economic Analysis, the percentage of disposable
income that went toward personal savings stood at only 1.8% in November
2003. Many financial planners suggest saving 3-6 months of your income
for emergencies. That means if you make $40,000 a year, you should have
a safety cushion of $10,000-$20,000. Most people are living from paycheck
to paycheck.
How Much We Spend
The Consumer Expenditure Survey reveals just how much we are spending.
According to a 2000-2002 survey done by the U.S. Department of Labor,
Bureau of Labor Statistics, the average annual expenditures for anything
from the basic essentials of food, housing, and clothing to health care,
cars, and entertainment was $40,677. That means that only $6,257 remains,
or a mere 13.3%. We can then deduce that we are spending 86.7% of our
income based on these figures. Either we aren't making enough to keep
up with the cost of living, or we are spending way too much!
How Much We Owe
October 2003 statistics from the Federal Reserve show that consumer
debt, defined as credit card debt and car loans, has reached a shocking
$1.98 trillion -- that means an average of $18,700 worth of debt per
U.S. household.
The above statistics reveal consumer debt as a whole. But what about
credit card debt specifically? The Associated Press recently noted that
the nation's credit card debt currently stands at $735 billion, or nearly
$7,000 per household. For those carrying balances, the per capita card
debt is closer to $12,000.
Furthermore, the Associated Press reports that 60% of card carriers
don't pay their balance in full every month. The fact that Americans
are chronically late on credit card payments is also reflected in recent
statistics from The American Bankers Association. The ABA Consumer Credit
Delinquency Bulletin reported an increase in credit card delinquencies.
In the third quarter of 2003, delinquencies were at 4.09%, up from 4.04%
in the second quarter of 2003.
OUR FINANCES FROM A BIBLICAL PERSPECTIVE
More than likely you have heard the statement "knowledge is power."
This is especially true when it comes to our personal finances. But
as Christians, if we ever want to truly reign in our finances so that
we can find economic freedom and success, then we need to revise the
statement to read "knowledge with wisdom is power," for, ultimately,
it is God's wisdom that directs us toward freedom. One of the best ways
to gain God's wisdom is through His Word, the Bible. And Scripture has
much to say about the issue of finances, as you will see once you have
reflected on the following verses below.
Income
The wages of the righteous bring them life, but the income of the wicked
brings them punishment (Proverbs 10:16).
Tithing
"Will a man rob God? Yet you rob me. But you ask, 'How do we rob you?'
In tithes and offerings. You are under a cursethe whole nation
of youbecause you are robbing me. Bring the whole tithe into the
storehouse, that there may be food in my house. Test and see if I will
not throw open the floodgates of heaven and pour out so much blessing
that you will not have room enough for it. I will prevent pests from
devouring your crops, and the vines in your fields will not cast their
fruit," says the Lord Almighty (Malachi 3: 8-12).
"A tithe of everything from the land, whether grain from the soil or
fruit from the trees, belongs to the Lord; it is holy to the Lord" (Leviticus
27:30).
"Be sure to set aside a tenth of all that your fields produce each
year" (Deuteronomy 14:22).
He who is kind to the poor lends to the Lord, and he will reward him
for what he has done (Proverbs 19:17).
Each man should give what he has decided in his heart to give, not
reluctantly or under compulsion, for God loves a cheerful giver (2 Corinthians
9:7).
Remember this: Whoever sows sparingly will also reap sparingly, and
whoever sows generously will also reap generously (2 Corinthians 9:6).
Now about the collection for God's people: Do what I told the Galatian
churches to do. On the first day of every week, each one of you should
set aside a sum of money in keeping with his income, saving it up, so
that when I come no collections will have to be made (1 Corinthians
16:1-2).
Whoever loves money never has money enough; whoever loves wealth is
never satisfied with his income (Ecclesiastes 5:10).
Saving
Go to the ant, you sluggard: consider its ways and be wise! It has
no commander, no overseer or ruler, yet it stores its provisions in
summer and gathers its food at harvest (Proverbs 6: 6-8).
In the house of the wise are stores of choice food and oil, but a foolish
man devours all he has (Proverbs 21:20).
Spending
If you spend yourselves in behalf of the hungry and satisfy the needs
of the oppressed, then your light will rise in the darkness, and your
night will become like the noonday (Isaiah 58:10).
"Do not store up for yourselves treasures on earth, where moth and
rust destroy, and where thieves break in and steal. But store up for
yourselves treasures in heaven, where moth and rust do not destroy,
and where thieves do not break in and steal" (Matthew 6:19-20).
Debt
The rich rule over the poor, and the borrower is servant to the lender
(Proverbs 22:7).
The wicked borrow and do not repay, but the righteous give generously
(Psalm 37:21).
"The Lord will open the heavens, the storehouse of his bounty, to send
rain on your land in season and to bless all the work of your hands.
You will lend to many nations but will borrow from none" (Deuteronomy
28:12).
DANGERS OF CREDIT CARDS
Credit Cards Seem Like Real Money
How often do we say that we have "paid" with a credit card? But have
we really paid? The answer is no. We have not paid one cent. We still
owe. What we do when we use credit cards is sign an IOU. We promise
to pay back everything that we owe. Viewing credit cards as if they
were cash is a dangerous mindset, one that can get us into trouble quickly.
Credit Card Debt Causes Stress
Sleeplessness, anxiety, worry, and depression are possible side effects
of accruing debt. Financial strain can affect the way you view yourself,
God, and your personal relationships. Financial difficulties are also
one of the causes of marital trouble.
Falling Behind on Payments Means Owing More
If you are unable to pay off your balance in full each month, you will
be paying finance charges at your current annual percentage rate. With
APRs averaging up to 17.99% and beyond, it will take a long time to
pay your debts. Plus, when you fall behind on payments, you will have
late fees to pay as well. In the end, you will end up paying more than
you originally owed had you paid with cash or check.
Temptation to Obtain Another Credit Card
Opening a new line of credit is easy today, especially when solicitations
end up in your daily mail. The Consumer Federation of America, a D.C.-based
non-profit association of more than 300 organizations that seeks to
advance the consumer interest through advocacy and education, noted
that in a twelve-month period ending March 31, 2002, credit card issuers
mailed five billion solicitations, or close to 50 solicitations per
U.S. household, making more than $3 trillion of unused lines of credit,
or approximately $30,000 per household, available.
With so many opportunities to use credit, it is easier to fall into
the borrowing trap. And when you don't have the means to pay, it is
even more tempting to use plastic.
Bad Credit Rating
Racking up big payments can affect your future borrowing power -- and
that means you could have trouble securing a loan for a car or a house,
a business venture, or an educational loan. If your bad credit continues,
you might be facing the possibility of bankruptcy.
Bankruptcy
Current bankruptcy filings stand at 1.6 million annually, notes the
American Bankruptcy Institute. The ABI also notes a close correlation
between household debt and bankruptcy filings. The 2002 statistics show
that 16% of our disposable personal income goes toward debt payments.
That's a lot!
HOW TO GET OUT OF DEBT
As you can see, the problem is serious, but if you find yourself struggling
with debt, there is a way out.
Follow The Law of Reciprocity
One of the best ways to overcome the challenge of spending more than
you are earning is to go by one very simple biblical principle -- a
principle that Pat Robertson repeatedly recommends because it works:
the Law of Reciprocity.
The Law of Reciprocity states that if we give to God, then He will
give back to us generously. It might sound backwards at first. You will
likely ask yourself, How can I give when I owe so much? But God's
ways our not our ways. We do not lean on our own understanding, but
we acknowledge Him (Proverbs 3:5-6). As we trust God, giving what He
shows us to give, then He will give back His blessing in abundance.
The Law of Reciprocity is clearly set forth in the Bible:
"Give, and it will be given to you: Good measure, pressed down, shaken
together, and running over will be put into your bosom. For with the
same measure that you use, it will be measured back to you" (Luke 6:38).
"Bring the whole tithe into the storehouse, that there may be food
in my house. Test me in this," says the Lord Almighty, "and see if I
will not throw open the floodgates of heaven and pour out so much blessing
that you will not have room enough for it" (Malachi 3: 10).
God says that He loves a cheerful giver. If that is true, Christians
should be excited about giving. But statistics show that when it comes
to giving to God, Christians are stingy. The Barna Research Group show
that born again adults, who comprise 38 percent of the nation's population,
have decreased their giving. In 2002 only 6% of born-again adults tithed,
as compared with 14% in 2001 and 12% in 2000. Barna also notes that
the proportion of households that tithe their income to their church
(a tithe equaling at least 10% of one's income) has dropped by 62% in
the past year, from 8% in 2001 to 3% in 2002.
With so few Christians giving, is it any wonder that so many Christians
find themselves in debt? But if you employ the Law of Reciprocity, and
are faithful in your tithes and offerings, you too can find freedom
from debt.
Curious how you can start giving back to God? Consider giving to the
work of CBN by becoming
a CBN partner. When you do, you will be amazed at what God can and
will do for you!
Other Resources:
Financial Boot Camp
Keys to Prosperity
Pat
Robertson Teaches on Getting Out of Debt
CBN
Teaching Sheet: Giving and Tithing
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