it’s all god’s money living grace community church november, 2014
TRANSCRIPT
Review of Week 1 – It’s All God’s Money
• Everything belongs to God• God promises to meet all our needs• Wealth… and the ability to make wealth… comes from
God• The pursuit of riches can deceive• Be content with what you have• The key to contentedness is to avoid comparison• Managing God’s money well requires consistent
communication with God… and with your spouse
Debt
• What God says about debt
• Romans 13:8Owe nothing to anyone except to love one
another; for he who loves his neighbor has fulfilled the law.
What God says about debt
• Deuteronomy 28:1-2
Now it shall be, if you diligently obey the LORD your God, being careful to do all His commandments which I command you today, the LORD your God will set you high above all the nations of the earth. All these blessings will come upon you and overtake you if you obey the LORD your God:
What God says about debt
• Deuteronomy 28:12
The LORD will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow.
What God says about debt
• Deuteronomy 28:15
But it shall come about, if you do not obey the LORD your God, to observe to do all His commandments and His statutes with which I charge you today, that all these curses will come upon you and overtake you:
What God says about debt
• Deuteronomy 28:43-44
The alien who is among you shall rise above you higher and higher, but you will go down lower and lower. He shall lend to you, but you will not lend to him; he shall be the head, and you will be the tail.
What God says about debt
• Proverbs 22:7
The rich rules over the poor, And the borrower becomes the lender's slave.
What God says about debt •What if…
• Your lender doesn’t abide by Biblical principles?• Someone else who has financial influence on your
life (typically your employer) doesn’t abide by Biblical principles?
What God says about debt •What if…
• Your lender doesn’t abide by Biblical principles?• Someone else who has financial influence on your
life (typically your employer) doesn’t abide by Biblical principles?
• God has a less financially lucrative… but more rewarding… plan for you?
What God says about debt •When is debt permissible?
• When buying an appreciating asset• A house
• As an investment for a constant stream of income
• A business
What God says about debt •When is debt permissible?
• When buying an appreciating asset• A house
• As an investment for a constant stream of income
• A business• A college education (not recommended)
The Plastic Genie
• Facts about credit cards• About 1.2 billion credit cards in use in the US
today• $880 billion in credit card debt was outstanding
in August, 2014
The Plastic Genie
• Facts about credit cards• About 1.2 billion credit cards in use in the US
today• $880 billion in credit card debt was outstanding
in August, 2014• About 23% of all households do not have a
credit card
The Plastic Genie
• Facts about credit cards• About 1.2 billion credit cards in use in the US
today• $880 billion in credit card debt was outstanding
in August, 2014• About 23% of all households do not have a
credit card• About 30% of all households pay off their
balance every month
30%
23%
47%
US Credit Card Demographics
Do not use credit cards
Pay off the balance each month
Carry a balance each month.
Average balance = $15,600
Annual Interest = $2,300
Getting out of Debt
• Arrange a date for the Genie with Ms. Shredder• We must spend less than our take home income if we
want to get out of debt
Getting out of Debt
• A Strategy• List all of your debts, from smallest to largest• Make minimum payments on all except your smallest
debt
Getting out of Debt
• A Strategy• List all of your debts, from smallest to largest• Make minimum payments on all except your smallest
debt• Pay everything you can on the smallest debt until it’s
gone
Getting out of Debt
• A Strategy• List all of your debts, from smallest to largest• Make minimum payments on all except your smallest
debt• Pay everything you can on the smallest debt until it’s
gone• Make minimum payments on all except your next
smallest debt
Getting out of Debt
• A Strategy• List all of your debts, from smallest to largest• Make minimum payments on all except your smallest
debt• Pay everything you can on the smallest debt until it’s
gone• Make minimum payments on all except your next
smallest debt• Pay everything you can on the next smallest debt until
it’s gone
Getting out of Debt
• A Strategy• List all of your debts, from smallest to largest• Make minimum payments on all except your smallest
debt• Pay everything you can on the smallest debt until it’s
gone• Make minimum payments on all except your next
smallest debt• Pay everything you can on the next smallest debt until
it’s gone• Continue until you are debt-free
Getting out of Debt – An example
• Assume the following:• $6,000 4-year car loan at 8%• Credit card #1 - $200 balance, minimum payment
of $10 per month, 12% interest• Credit card #2 - $1,000 balance, minimum payment
of 2% / $10 per month, 21% interest• Credit card #3 - $2,000 balance, minimum payment
of 2% / $10 per month, 18% interest
Getting out of Debt – An example
• If we pay the minimums…• Car loan will take 4 years to pay off. Interest =
$976
Getting out of Debt – An example
• If we pay the minimums…• Car loan will take 4 years to pay off. Interest =
$976• CC #1 will take 23 months to pay off. Interest = $22
Getting out of Debt – An example
• If we pay the minimums…• Car loan will take 4 years to pay off. Interest =
$976• CC #1 will take 23 months to pay off. Interest = $22• CC #2 will take over 29 years to pay off. Interest =
$3,642
Getting out of Debt – An example
• If we pay the minimums…• Car loan will take 4 years to pay off. Interest =
$976• CC #1 will take 23 months to pay off. Interest = $22• CC #2 will take over 29 years to pay off. Interest =
$3,642• CC #3 will take over 29 years to pay off. Interest =
$4,562
Getting out of Debt – An example
• If we pay the minimums…• Car loan will take 4 years to pay off. Interest =
$976• CC #1 will take 23 months to pay off. Interest = $22• CC #2 will take over 29 years to pay off. Interest =
$3,642• CC #3 will take over 29 years to pay off. Interest =
$4,562
• Total loans = $9,200. Total interest = $9,202
Getting out of Debt – An example
• Assume we pay $100 over the minimum each month…• CC #1 will take 2 months to pay off. Interest = $1
Getting out of Debt – An example
• Assume we pay $100 over the minimum each month…• CC #1 will take 2 months to pay off. Interest = $1• CC #2 will take 10 months to pay off. Interest = $93
Getting out of Debt – An example
• Assume we pay $100 over the minimum each month…• CC #1 will take 2 months to pay off. Interest = $1• CC #2 will take 10 months to pay off. Interest = $93• CC #3 will take 22 months to pay off. Interest =
$445
Getting out of Debt – An example
• Assume we pay $100 over the minimum each month…• CC #1 will take 2 months to pay off. Interest = $1• CC #2 will take 10 months to pay off. Interest = $93• CC #3 will take 22 months to pay off. Interest =
$445• Car loan will take 34 months to pay off. Interest =
$806.
Getting out of Debt – An example
• Assume we pay $100 over the minimum each month…• CC #1 will take 2 months to pay off. Interest = $1• CC #2 will take 10 months to pay off. Interest = $93• CC #3 will take 22 months to pay off. Interest =
$445• Car loan will take 34 months to pay off. Interest =
$806.
• Total loans = $9,200. Total interest = $1,344
Getting out of Debt – An example
• Benefits of paying an additional $100 per month• All debts (including the car) are paid off in 34
months
Getting out of Debt – An example
• Benefits of paying an additional $100 per month• All debts (including the car) are paid off in 34
months• Save over $7,800 in interest