Archive for January 17th, 2007

Thank you for joining us again this week. Last week, we talked about bringing our tithes and offerings to the Lord. We also looked at a spending plan. A way to live within your means, follow God’s plan and care for your family. But there’s one major thing that prevents most Christians in America from following God’s plan for their lives. That’s overbearing debt.

Rob BellI was reading about a pastor who took a trip to Turkey. While there, he noticed there were houses in various stages of being built all around the cities. They appeared as if someone had started to work and then just stopped in halfway through and abandoned it. He asked his friend, a missionary there, what was going on. The missionary explained that the Koran has admonitions against having debt or offering loans. Because the government is Muslim, they have strict laws against lending and borrowing. So the people save their money until they can begin to build. When they run out of money, they stop building and go back to work until they can afford to continue.

Imagine if we took our Biblical admonitions against debt so seriously…

90 Days Same As Ca$hInstead, we have the “American Dream.” Except that dream looks more and more like a nightmare every day. “Buy now and pay later…” “90 Days, Same as Cash…”

We spend money we don’t have. To buy things we can’t afford. To pay for it, we work longer hours. We sacrifice time with the people we care about. We leave our families, our churches and our communities with less than they deserve. All to impress people who couldn’t care less. Just “Keeping up with the Jones”

Stressed by DebtDebt is an “American” Problem. Despite changing laws, 1.8 million people filed for bankruptcy in 2005, a new record. In January 2006, U.S. households overspent their incomes by $575. Almost one out of every five people make only the minimum monthly payment on their credit card. 40% of American families spend more than they earn every month. Newsweek reported that seniors, many of whom are on fixed incomes, are carrying an average of over $4,000 in credit-card debt.

Only 9% of evangelicals say they are “in serious debt.” The fact is, they have just as much debt – in some cases more – than non-Christians. In fact, 37% of Christians believe they’ll never be out of debt. And many churches don’t help the problem by underpaying their most important people – or expecting more service for less money.

So why is debt such a huge problem? We have been taught to ask three questions when considering a credit purchase. What is the interest rate? What is my payment? What you should ask is completely different. What you should ask is, “What is the ACTUAL total cost?” and “When will it be paid off?”

If I asked you to tell me the difference between 5% and 10% could you tell me? Most would agree that 5% is probably better. But what if I told you that the 5% loan will take 50 years to pay off? And the interest you’ll pay is about 5 times as much as the original price? Meanwhile the 10% loan is paid off in 15 years. And the total interest is one-fourth of that.

Also, the world teaches us to ask, “Do I want it?” Those living Godly lives need to be more responsible. They should be asking, do I really need it? And is it worth the extra cost? What if I told that the $2.00 cup of coffee you’re buying with a credit card will cost you almost $1000 when you finally pay it off 7 years from now? Would you still “need” it that badly?

Unfortunately, it is very difficult to completely avoid debt in today’s world. If you must have debt, you should know which debts are better than others.

You used to be able to depend on mortgages. However, in the past few years, some loans that were designed to help investors were re-worked and misapplied to help families buy homes they can’t afford. Homes that 10-percent of them will lose this year. In fact, Florida ranks as the number 2 state for foreclosures. The Miami Herald reports that last month alone, 3.3 million mortgages in Florida were more than 30 days past due.

Really, the only mortgage debt that most families can afford is fixed-rate mortgages. The state of Texas has outlawed interest only mortgages and adjustable-rate mortgages. I personally believe that the same should happen in every state. Until the government sees it my way, avoid them like the plague.

Another popular loan available these days is the Home Equity Line of Credit. The banks promise you no closing costs and access to cash whenever you need it. But what you get is another credit card. And if you miss a payment, your house is the collateral.

There are other debts you should avoid, but which do have some benefit. These include Student loans, fixed-rate vehicle loans and fixed rate consumer loans. It is better to save for these expenses ahead of time. But if all else fails, these debts are at least reasonable.

Of course, the worst debt is credit card debt.

You’ve probably heard that compound interest is a good thing. When you’re saving, it is. But what happens when compound interest works against you?

Consider Maria. She has a balance of $500. on her credit cards. She makes the minimum payment every month. She only charges an extra $150 a year.

Five years later, she owes $780.

Ten years later, she owes $2,050. She’s only spending an extra $150.00 per year.

Fifteen years later, she owes $3,720. Still making the minimum monthly payment on time, every month.

Twenty years later, she owes $5,720.

Twenty-five years later, she’s ready to retire. But she owes $7,970. Almost $8000.

She’s charged less than $5000 in that time. And she’s paid almost $5000 back.

Does that sound like a good deal to you?

National statistics show that Maria is unusual. She only charged an extra $150 a year.

Even if they pay them off every month, the average consumer will spend 35% more when shopping with credit cards.

Let me ask you, how do you think God views debt? Do you believe that owing money to someone else reflects God’s best for you and yours?

In Proverbs, Solomon writes, “The rich rule over the poor, and the borrower is servant to the lender.”

When someone borrowed money, in Old Testament times, they became the servant of the lender until they paid the debt pay off.

When you borrow money today, you enter into a binding contract promising to pay back the money. You have basically given up your financial freedom to get things you can’t afford to pay for. That results in the financial gain of the lender at your expense.

You are their slave until you have fulfilled your obligation to repay. Maybe that’s why it’s called “Master Card”?

Often people who are in debt feel the financial pressure caused by debt repayment and conclude that they just can’t give the way they would like to because of debt pressure. How does that glorify God?

Deliver Us From DebtIn “Deliver Us From Debt,” Dr. Charles Stanley writes,

First, debt creates stress, anxiety, worry, and deep frustration. The person who suffers under such a burden cannot have a heart fully focused on God. Debt can also become a mental preoccupation. Your first and last thoughts each day are about whom you owe, how much you owe, and what you can do about what you owe. You are not in a position to hear from God about His priorities for your money or your time and other resources.

Second, unpaid debt can lead to the fear that you will never be out of debt. That fear is the opposite of faith. Fear separates us from God . Fear becomes your focus. Debt takes the place of God.

Third, debt places a strain on family relationships. Money concerns are among the primary causes of family arguments. Money problems are responsible for 85% of divorces in America. Mismanagement of money can smother love. The more you struggle with money, the less time and attention you have to share with your loved ones.

Fourth, debt can cause you to become resentful of others. You begin to avoid those you owe. Sometimes, you may avoid people you think know about your indebtedness. Debt can cause you to distrust or look unkindly upon those who seem to have no money problems. It can cause you to become envious. These are not godly attitudes.

Fifth, debt hurts the testimony of a Christian. Actions speak louder than words. You can tell the world you are trusting God to meet all of your needs. But, if the truth is that you are relying on credit cards or loans, It is difficult to declare to the world that you are trusting God to meet all of your needs and to be deeply in debt at the same time. Your credibility is destroyed.

Finally, debt affects your spiritual life in a negative way because debt keeps you from listening totally to God’s directives for your daily life. If the only thing you can focus on is your creditors, God is given the second place in your life.

Focus is the key. The biggest problem with debt abuse is the focus on possessions. Materialism in any form is sin. We compound that sin when we allow that materialism to pull us down into debt. When debt is in the picture, we go from being the controllers to being controlled. Seeking peace outside of God is rebellion. A rebellion we pay for everyday. True peace only comes from God.

John 14:27 states, “Peace I leave with you; My peace I give to you; not as the world gives do I give to you. Do not let your heart be troubled, nor let it be fearful.”

Accountability is also important. God does not intend for you to do it alone. As Ron Blue notes, “To stay on track with your repayment plan, hold yourself accountable to someone whose judgment and integrity you trust.” To move from financial bondage to financial freedom, you need to have someone you can trust to watch your back.

A possible debt solution that works for some people is earning more money. That does work for some people. However, more money isn’t the answer for everyone. The truth is, unless you change your habits and attitudes that got you into debt in the first place, even an increase in income isn’t likely to resolve your problem. In fact, there’s a chance you could get even deeper into debt, thinking that you now have the ability to pay your old bills, as well as taking on new debt.

God wants to bless us. He is a loving father who delights in His children’s prosperity. He wants to serve our needs. So, when we move into debt due to wants and desires, we steal from the Lord. We steal His opportunity either to provide your needs or to show you they aren’t needs. And just because you can afford something, it doesn’t mean God wants you to get it. His desire is for you to engage in generosity, not greed.

It’s also important to note that while God does not want us in debt, bankruptcy is not an acceptable option for Christians, either. Psalm 37:21 points out, “The wicked borrows and does not repay, but the righteous shows mercy and gives.” By God’s law, we have an obligation to pay our debts. And just like with the discipline of the tithe… We can trust God to provide for us the means to pay those debts. When we are obedient.

Resolve today to get out of debt. Make a decision that you will honor God with your money. Ask yourself, are you honoring God by being a responsible steward of what He’s provided you? Or are you spending based on negative motivators? Consider that if you can’t afford it now, perhaps it isn’t God’s will for you to have it. At least not yet.

Before purchasing anything… Stop for a moment and consider, do I really need this, can I afford it, and will it be worth the cost? Exercise self-control to move away from debt and towards financial freedom and a stronger faith in God. Then thank God for His help as you pay off each bill. Make the payment of your debts an opportunity for praise.

Once you are giving as God has called you, and brought your attitude on debt into alignment, you can continue to financial freedom by examining His provision for your family’s future. Which is what we’ll do next week.
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