Debt Free Living

Proverbs 22:7
The rich rules over the poor,
And the borrower is servant to the lender.

This Bible Verse is Reality! You can accept it or reject it.

The Chicago Flood occurred on April 13, 1992, when the damaged wall of a utility tunnel beneath the Chicago River opened into a breach which flooded basements and underground facilities throughout the Chicago Loop with an estimated 250 million gallons of water.

Chicago city engineers learned a hard lesson as the small leak turned into hundreds of millions of dollars of flood damage.

In 1837 the national debt of the United States of America was $38,000. In 2011, the federal government has a debt burden of over $14 trillion.

Many Americans have large credit card balances. Our society lives on an I want what I want now mentality. Just a couple of decades ago, many people operated on the principle of saving up for items that you want and paying cash for the purchase. People also used lay away plans.

Suggested Solutions for getting out of credit card or other debt problems are looking at our consumptive lifestyle. We should compare how much we earn to how much we spend or consume. If we are spending more than we earn, we need to make changes.

Here are suggested principles:

1. Pay God First. Very few of purchases of a consumptive lifestyle are need based.
2. Ease of Credit – Live Debt Free. Our society values you by your ability to get credit. If credit cards are a downfall, pay them off and close all down. You can have a family ceremony to burn your credit cards.
3. Adult Toys like boats, RV’s, fancy cars. We should change vehicles for the right reasons like safety of your family and financial reasons like repairs and gas mileage.
4. Eating Out – overspending by eating out multiple times each week creates debt. You can save the treat of going out to eat for special occasions. We can simplify meals without losing nutritional needs.
5. Unexpected Bills – There are 3 areas of trouble:
Motor Vehicles
Medical Expenses
Household Maintenance, Insurance, and Taxes

Be prepared for unexpected debts with a savings account of $1,000. You can create a starting point by setting aside $20 a week. Jump start your account with any raise or income tax refunds you may receive.

6. Reduction in Income due to loss of employment, sickness, or divorce. Set aside 3 or more months of living expenses for problems like these. Save a set amount of money each week to build your account.
7. Lack of Household Budget or Spending Plan. Some people don’t have a plan and some people that do have a plan don’t follow their plan. Total all your expenses for 3 months and average your expenses. Compare to spendable income for the same time period.

Debt Problems

1. Debt is a form of bondage.
2. When in debt, you are in bondage. When in debt, you have lack of contentment.
3. Debt crushes out the future.
4. Avoid get rich quick schemes – If it sounds too good to be true, it probably is.
5. Refuse to be surety for someone else.

Only lend money to family members if you have the cash because if the family member defaults, you will not be in financial trouble. Never go into debt for someone else.

Proverbs 22:26
Do not be one of those who shakes hands in a pledge,
One of those who is surety for debts.

If you have extra money – pay off your debts! Debt can erode our Christian witness.

Psalms 37:21
The wicked borrows and does not repay,
But the righteous shows mercy and gives.

6. Don’t tell someone Jesus loves you when you owe them money.
7. Debt imperils your giving.

Deuteronomy 16:17
Every man shall give as he is able, according to the blessing of the LORD your God which He has given you.

About 2.5 % of people give. Many have never learned the Biblical principles of tithe and are missing blessing from God.

Four Money Principles

1. Never pay bills late.
2. Do NO live on credit. If you are not able to pay cash for lunch or groceries, you are in trouble.
3. Do not be an inconsistent giver. When you only pay tithe when your bills are all paid, you miss blessing from God. Paying for children’s Christian education is not paying tithe. You argue that the time you give to the church is paying tithe. Trust God and He will provide.
4. When you worry about nothing but money, insomnia sets in. When the phone rings, you are scared to answer the phone. Do you hide purchases that your spouse would not approve of?

Steps to Getting Out of Debt

1. Make a Decision – Recognize and Admit the Problem – Decide to get out of debt.
2. Seek Divine Help – Make a spiritual commitment – Ask for God’s forgiveness, strength, and guidance.
3. Discontinue All Credit Purchases – Close all accounts after paying them off and cut the cards up.
4. Determine Overall Situation – Total up all debt – Be Honest.
5. Develop a Repayment Plan – Do not get debt consolidation loans – Causes more debt.
6. Be Faithful in Your Tithes and Offerings – God will do incredible things for you.
7. Snowball Your Debt – List all your debts with your largest at the top and smallest at the bottom. Pay off your smallest debt first. You will gain the victory by eliminating a debt. This accomplishment will help you continue on. Focus on your next debt and keep going.

Many are tempted to pay on their home mortgage first. Don’t do that because that interest is tax deductible. Credit card interest is not tax deductible.

8. Do not file for bankruptcy unless there is no other way out of your debt.

Ulysses S. Grant was the 18th President of the United States (1869 – 1877) as well as military commander during the Civil War and post-war Reconstruction periods. President Grant became an investor on Wall Street and lost $150,000 in the Wall Street Panic of 1873. He got throat cancer and was able to pay off all his debts by writing his memoirs of his life as a general, a president, and investor. He left his family $300,000 before dying of cancer.