"Stressed Out" part 7:
From Debt to Financial Security
by
Greg Hanson
Sunrise Wesleyan Church
June 10, 2007
Well, here we are at the
end of our message series on stress. Over the past number of weeks,
we’ve talked about a variety of causes of stress. We’ve talked about
fear, we’ve talked about busyness, we’ve talked about marriage, we’ve
talked about parenting, we’ve talked about failure, and last week we
talked about debt.
Today, we’re going to talk about getting out of debt and moving on
toward financial security. Because regardless of where you’re at right
now… no matter how much you owe to who… I believe it’s possible to find
financial freedom. I believe you can have peace in this area instead of
stress.
And so we’re going to look at some Biblical principles that will help
you get out of debt and we’ll use some common sense, too.
And you know, if I could do it, I’d love to wipe out all of your debt.
Of course, I don’t have the resources to do that. In fact, about the
best I can do is give you a loonie (a Canadian $1 coin). And so I’m
going to do that. But not just any old loonie… these are chocolate
loonies. So take one and invest or ingest it as you see fit.
Okay, well, last week we looked at a whack of statistics that painted a
pretty bleak picture of the financial condition of our society today.
People are spending more than they’re making, they’re piling on the
debt, and they’re putting next to nothing away into savings.
And maybe that describes you. Maybe your stuck nostril deep in debt
right now yourself. And so this morning, what I want to do is give you
four principles for moving from debt to financial stability. And let me
say right up front, I’m not a financial wizard. I’ve had debt myself.
In fact, right now we’re carrying a balance on a line of credit. But
we’ve paid off our credit cards, we finally paid off Shera’s student
loan a couple months ago, and we don’t have any car payments. And we’re
on the road toward financial security ourselves. We’re not there yet,
but the principles we’re talking about this morning are helping us get
there.
So I’m not speaking from my own expertise; I’m speaking from lessons
I’ve learned from others that I’m personally applying in my own life
and I’m seeing results. Okay? So let’s get right at it.
To move from debt to financial security you must…
1. Develop a
plan to pay off your debt
If you are in debt and
you want to get out, then you need a plan. If you are out of debt and
you want to stay out, then you need a plan. Because at least for most
of us, it’s a lot easier to spend money and go into debt than it is to
spend wisely and find financial security. You don’t get out of debt by
accident. The only way to get out of debt is to plan to get out of debt.
Romans 13:7 (NLT)
Give to everyone what you owe them…
That’s talking about paying your debts. So you need to identify who you
owe and figure out how you’re going to pay them. That’s your plan. So
what will your plan look like? What will it do? Well, let me try to
explain it to you. Your plan will do certain things. First of all…
Your
plan will…
-
Cut
expenses and maximize income
You need to live on less than you make. I mean, I’ve seen different
statistics, but most people are living on between 104% and 112% of
their income. That’s just heading for disaster.
But you… you need to cut expenses and maximize income… even if it means
you have to get a second job for a time. As for me, I sell PowerPoint
presentations on eBay and on a website called PowerPoint4Preaching. The
goal is to equip other pastors with the tools they need to make good
use of current technology. Now, I don’t get rich doing this, but I made
an extra $1300 last year. I’ve also designed websites for people from
time to time. Maybe you can moonlight with something like that, that
uses your skills. Maybe you can work a couple nights a week delivering
pizzas for the next six months. Maybe you can have a yard sale and
clear some junk out of your home. I know a number of you are already
planning that. If you’re in debt, how can you maximize your income?
-
Reduce
or eliminate optional expenses
If you’re in debt, you can’t afford to be paying for full cable. If you
can’t cut it completely, then just drop a package or two. That’s what
we did. Or maybe you need to brown bag it to work. Even if you aren’t
in debt, you should do that. You could save probably $300 per month by
choosing to take your lunch instead of eating out. Or instead of buying
a café mocha every time you’re at Tim Horton’s, why not save that for a
special treat? What are your optional expenses that you can reduce or
eliminate?
Because the truth is, we tend to buy stuff we don’t need with money we
don’t have to impress people we don’t like. If you’re in debt, you need
to stop making those kinds of purchases.
-
Involve
sacrifice
For two reasons. First, you’ll be able to get out of debt much faster
which means less paid in interest. Second, you might learn a lesson. If
your debt causes you some pain, you might not be so willing to go into
debt again. So where are you going to sacrifice? What are you going to
give up in order to get out of debt? I’m not talking about selling your
kids, although that may be tempting. But how about eating out less? How
about cutting back to one car? How about downsizing your home?
Maybe you need to decide that for a time you’re going to live on rice
and beans, beans and rice. And put as much as you possibly can into
paying down your debts. The amount of debt you have will dictate how
big the sacrifice, so what sacrifices do you need to make?
-
Be
expressed in a budget
Yeah, I know. For some, that’s a dirty word. But you need a budget.
Whether you’re in debt or not, you need a budget.
So the first thing you should do when preparing your budget is figure
out where your money’s going already. What are your regular payments?
Where do you spend more than you should? To find out, keep track of all
your expenses for the next 30 days. Carry around a notepad, and write
down everything you buy. You buy a coffee, you mark it in the book. You
pick up a newspaper, make it down. Keep track of every expense, and
then at the end of 30 days tally it up.
Then evaluate it. Are you shocked by anything? Are you spending more
than you should on those things that seem insignificant but add up fast?
And then sit down with pen and paper, or maybe in front of your
computer. And by the way, if you’re married, you should be doing this
with your spouse. And then start working on your budget. Write down all
anticipated sources of income and expenses. You already know what your
income is. For expenses, include things like your rent/mortgage,
insurance, credit/loan payments, car payments, gas, repairs, charitable
giving, oil, electricity, groceries, household items, phone,
television, bank fees, entertainment, gifts, subscriptions, childcare,
spending money, tithing and savings.
Then determine how much you’re going to spend where each month, and
stick to it. If you have debt, then you should cut back in some areas
so you can pay your debt off more quickly.
And there are a ton of resources available online to help you with
this. I copied one worksheet into your notes to help you figure out
your monthly income and expenses so you can develop a budget. But if
you’re online, see what else you can find. I listed a few websites in
your notes right at the bottom of that worksheet.
[On bulletin insert
- "This is one of many free tools at www.crown.org. Visit their site to
take advantage of more. You may also want to check out
www.daveramsey.com and www.moneyproblems.ca. Podcasts are available at
all three sites."]
Now, this isn’t in your
notes, but there are a few things that your plan should not include.
Your plan should not include lottery tickets. That’s called a stupid
tax.
The other night, literally as I was working on this point, the doorbell
rang, I answered it, and it was a teenager selling tickets for a raffle
to raise money for their basketball team. I know there’s a difference
between a lottery and a raffle, but for me personally, I don’t want to
give money to anyone just because I might win something. I don’t want
that to be my motivation. So I asked the guy, “I don’t really want a
ticket, but can I make a donation?” And I gave some money and that was
that. I’d much rather make straight forward donation than buy something
because of what might be in it for me.
And hey, if you play the lottery, can I suggest just sending your
donation directly to the government. Because that’s essentially what
you’re doing anyway.
Here’s something else… Your plan should not depend on a multitude of
variables coming together. You know, if this happens and this happens
and this happens, then I’ll have the money to pay this. Don’t count on
something like that.
Your plan should not rely on a quick fix. Quick fixes never work. You
didn’t get this deep in debt overnight, and you’re not going to get out
of debt overnight, either. Forget the commercials you see on TV, forget
the ads you get in the mail… those get out of debt fast and get rich
quick schemes don’t work.
If you want to be financially secure, you’ve got to develop a plan to
get out of debt and then stick to it over time. To give you some more
tips on how to do this, I’ve put a list of ideas in your notes. You can
take a look at those later on this afternoon and see if there’s
anything there that could help you.
2. Know what
you’re getting into before you buy
This is what Jesus had
to say…
Luke 14:28-30 (NLT)
“But don’t begin until you count the cost.
For who would begin construction of a building without first
calculating the cost to see if there is enough money to finish it?
Otherwise, you might complete only the foundation before running out of
money, and then everyone would laugh at you. They would say, ‘There’s
the person who started that building and couldn’t afford to finish it!’”
Before you make a purchase, you need to figure out what the real cost
is. In fact, Jesus is saying that you’d be foolish not to do that.
Yeah, there’s the price tag cost. Then there’s the tax. Depending on
what you’re buying, there are the monthly service fees, there are parts
that need to be replaced, how much power does it consume, how long
should it last, what kind of warranty does it come with… there are lots
of things to consider.
Let’s say you decide to buy that high definition plasma screen TV. It
totals $3000 and you put it on your credit card. You have a 19%
interest rate, and you decide to just pay the minimum payment of 2%.
It’ll take you 451 months and a total of $7930.60 to pay it off. Is
that really how much you want to pay?
Or let’s say you’re buying a car, and you’re paying cash. You’re not
arranging to make payments… you’re buying it outright. You should still
do some research. Find out what the value of the car really is so you
don’t over pay. What will it cost to run it? How available are
replacement parts? How will that car affect your insurance rates? There
are lots of things to consider before you buy.
And could I recommend that when you do buy, use cash. Studies have been
done that reveal that when people use plastic, they spend 12-18% more
than they would have spend if they were paying cash. In fact,
McDonald’s did a study in a fast-food context that discovered that
you’ll spend 37% more using plastic than you would if you were using
cash.
Because cash provokes an emotion. There’s no emotional connection when
you lay down a piece of plastic. But when you have to look Queen
Elizabeth in the face and tell her how you’re spending her, it’s not as
easy for you to spend it.
When paper money goes through your hands, it forces you to realize how
much you’re spending.
3. Always
give to God first
Now, here’s the part
that can sound kind of self-serving. I mean, I’m telling you that you
need to give to God, and you give to God by giving through the Church.
And there are a lot of people who think the Church is just after your
money.
But if you were at our Vision Day a couple weeks ago, you know that
we’re not about building our own wealth. You know that we’re not
padding our wallets. You know that we’re taking the funds we receive
and we’re putting them into ministry here and around the world. And you
know that we actually don’t talk about money very often here. Yes,
there are a few churches and religious leaders that have taken
advantage of people. But with just those few exceptions, giving to God
is recognized by believers around the world as simply an expression of
worship, obedience and trust.
But still, aren’t we talking about getting out of debt and finding
financial stability? I mean, how can giving away 10% of your income
help to accomplish that?
Well, a couple months ago, I was reading a book I had checked out of
the library. And it wasn’t a Christian book. It was just a book about
finances, written by a Canadian author, mostly dealing with legal ways
to reduce the amount of tax you owe.
And I was shocked when I came across a whole chapter on tithing. I
wasn’t expecting that at all. Let me just read you some sections from
that chapter…
[Tithing] is an ancient secret that has been forgotten, ignored and
neglected. The principle of tithing has been written and spoken about
by many successful people over the ages. Although it is a Biblical
principle, people of many diverse beliefs and religions have also used
it to their benefit.
Tithing is the systematic, regular giving of one-tenth of all your
income back to God. Tithers believe that God is the source of all their
prosperity, that He can be trusted to supply all their needs, and that
His promises are universal. If you’ve never tithed before, you need to
put it to the test…
Ask people who tithe faithfully and they will tell you of the ten,
hundred, and thousand times returns they have received by giving.
Universally, tithers will also all tell you that if you tithe you’ll
live better on the 90% than you ever did before on the 100%.
The prosperity benefits of tithing are so significant that it would be
worth it even if it came without any tax benefits.
~ David Voth, in The 10 Secrets Revenue Canada Doesn’t Want You to
Know, pp. 73-74
Wow… that’s good stuff. “You’ll live better on the 90% than you ever
did before on the 100%.” Some of you have made similar comments to me
after you started giving to God. Of course, if you know your Bible,
that should come as no surprise. In the Old Testament book of Malachi,
God says…
Malachi 3:10 (NLT)
“Bring all the tithes into the storehouse so
there will be enough food in my Temple. If you do,” says the Lord of
Heaven’s Armies, “I will open the windows of heaven for you. I will
pour out a blessing so great you won’t have enough room to take it in!
Try it! Put me to the test!”
Now, that’s not a guarantee that you’re going to become rich. Maybe God
will bless you that way. There were godly people in the Bible who were
quite well off… David, Barnabas, Nicodemus, Joseph of Arimathea… And
there were plenty who were pretty poor… pretty much all the disciples,
the apostle Paul, even Jesus Himself.
So I’m not saying that you will become rich financially… and anyone who
promises you that is lying to you and they’re preaching a false gospel.
Don’t be fooled by them. But I am saying that God will bless you, and
that can take a variety of forms. Maybe you will get rich. Maybe you’ll
get better mileage in your car. Maybe your fridge just won’t break down
as early as it would have otherwise. I don’t know how God will bless
you, but I believe His promises.
Now, I normally don’t recommend that people tell what they give.
Because that’s between you and God. It’s a personal thing. It’s not
something to brag about. It’s not something you should proudly proclaim
in order to gain the applause of men. Because that shouldn’t be your
motivation to give to God.
However, with that said, I want you to understand that God does keep
His Word. And when He promises that you’ll be better off when you put
Him first in your finances, He means it. And so to give you some
context here this morning, I’ve asked Harvey Anderson to talk a little
bit about what he and Sandra have discovered when it comes to honouring
God through tithing. Until just the past couple years, tithing was a
foreign concept to them. Have they discovered God’s promises to be
true? Well, let’s hear what he has to say…
Harvey:
Good morning. Please do not think I am here this morning to make anyone
feel guilty, feel uncomfortable, or to embarrass anyone. I am simply
telling the results of following Gods wishes in one area of my life.
When Greg asked me to speak this morning my initial reaction was how to
present my case for tithing without appearing “Holier than thou”.
Believe me I’m a long way from “Holier than anyone”. I may have been
embarrassed to admit that Sandra and I tithe but why should we try to
hide the fact that this is one area where it is possible for us to obey
God.
When I was young I was taught that tithing was a French Canadian
Catholic Custom that took 10% of peoples’ income so the Church could
gather great wealth, build impressive, ornate churches, and keep the
members subservient.
At the church I attended people put what they thought appropriate on
the collection plate. Once a year the elders of the church went door to
door to members of the congregation to “ante up” so that the budget
could be met. If a new roof or a new furnace was needed fund raisers
were organized. Women got busy baking pies for the church bake sale. A
thermometer-like graph in the church entry told us how close to our
goal we were and thus how many more potluck suppers, crokinole parties,
and church bazaars would be needed. (serious fund raising). Tithing was
a word never heard.
When Sandra and I started attending Sunrise we wanted to give and we
did. $10 should do it. I mean how much is it to rent a hall. O.K. after
a short while we realized the church had other expenses. $20 would be
lots. But we were still giving to the Church and not to God. It was
later that year while driving through Quebec, listening to a CD about
tithing that we decided that if we indeed trusted God we had no choice
except to tithe. But could we afford to!
When Sandra and I retired we thought that a modest pension, RRSPs, and
some investments we had accumulated would see us through until we could
draw CPP at age 60 and Old Age Pension (I hate that term) at age 65.
Our net worth would probably diminish as we got older but that was OK.
At some point we wouldn’t be able to travel or golf and the income we
needed would decrease.
But guess what happened? When we started to tithe our net worth
increased. Investments started increasing dividends. Stocks we sold
went down while ones we bought went up. When we needed a new roof a
special dividend was issued by one of our holdings. A sewer connection?
Increased dividends covered that. Our investment advisor tells us that
for the last two years we have outperformed the stock market by 4% .
How? Maybe I’m a wise investor. Well, the words Harvey and wise are not
often used in the same sentence. Maybe I can time the stock market?
Never been done before. Or perhaps the storehouses of heaven have been
thrown open!
Opportunities have arisen for us to be able to help others ( and we
feel very blessed to be able to) and rather than decreasing our worth
it continues to grow, but don’t ask me for a loan after the service. It
isn’t growing that fast. I now realize that we have no wealth of our
own but are merely stewards of what God gives us. God does not want us
to give grudgingly. God wants us to give with a joyous heart. And when
we do I know his blessings will pour down from heaven as they have for
Sandra and me.
Thank you.
It’s one of those
strange things. When you give to God, suddenly you seem to have more to
go around to meet other needs.
Proverbs 3:9-10 (NIV)
Honor the LORD with your wealth, with the
firstfruits of all your crops; then your barns will be filled to
overflowing, and your vats will brim over with new wine.
Underline the word “firstfruits.” That means that you don’t give God
what’s left over at the end of the week. He doesn’t want your
leftovers. That doesn’t honour Him at all. He’s honoured when you give
to Him first… right off the top. And when you do that, He will help you
in the other areas.
And yes, I believe tithing is practical even when you are in debt. In
fact, according to that verse, tithing may be just what you need to do
to get out of debt.
Dave Ramsey is a financial guru that’s often on The Today Show, he’s
been on Oprah (imdb.com), and he has a daily call-in talk show on the
radio. I often listen to his podcasts. I’ve listed his podcast in your
notes. Dave is also a follower of Jesus, and last week one of his
callers had a question about tithing. The caller asked if a person
should still tithe if they were in debt, or if they should stop tithing
in order to put that money toward paying off the debt.
And Dave responded by saying that he knew of no place in the Bible
where permission was given to not give the full 10% tithe to God. He
said you should always give to God what is His. (Last week of May,
2007.)
Which is reminiscent of what Jesus said. He said to give to Caesar what
is Caesar… in other words, pay your taxes, don’t cheat on them… and He
said to give to God what is God’s. In fact, in Malachi 3, God actually
says that if you refuse to tithe, you’re robbing from Him. And as a
result, you will not experience His blessing. Which ultimately means
you’re going to have a much more difficult time trying to dig your way
our of debt and moving on to financial security.
[NOTE: When this message
was delivered at Sunrise, I decided to wrapped it up here. The
remainder was adapted into its own message for the next week. (Which
means there's one more message in this series after all.) On this
website, the full sermon is intact. - Greg]
4. Prepare for
times of famine
You know, contrary to
popular opinion, you don’t have to spend everything you make. You’re
under no legal or ethical obligation to do so. So instead of spending
it all, save some of it. Save it for an emergency and save it for
retirement.
Proverbs 21:20 (NLT)
The wise have wealth and luxury, but fools
spend whatever they get.
Many of you already know the story of Joseph in the Old Testament. If
not, you can read about him for yourself starting in Genesis chapter
37, and going through to the end of the book. He’s one of my favorite
people in the Old Testament.
Just to jump into the middle of the story, Joseph was a Jewish slave
who was serving time in prison for a crime he didn’t commit. And while
he was there, it was discovered that God had given him the ability to
interpret dreams. So when Pharaoh had a dream that greatly disturbed
him, and no one else could help, he was told about Joseph and Joseph
was brought before him.
Joseph explained to Pharaoh that the dream meant that Egypt was about
to experience a time of great prosperity… and that it would last for
seven years. But then the bad news. After those seven years of
prosperity, there would be seven years of famine.
Well, Joseph impressed Pharaoh so much that Pharaoh put him in charge
of the country. Joseph was second in command only to Pharaoh. And so it
came to Joseph to decide what to do during these next fourteen years.
And what did he decide to do? He decided to save 20% of all the crops
during the seven years so that there would be enough to get them
through the time of famine. And that’s exactly what happened. And as a
result, not only Egypt but the surrounding countries as well were saved
during the time of famine.
That was on a national scale. But the same principle applies for us
individually. During times of prosperity, save up for times of famine.
Because they’re going to come. And if you’re not prepared, you’re
setting yourself up for constant debt and ongoing tension.
There will be lean times. And it’s then that you’ll be glad you have
something saved up. We’re not talking about untouchable money. We’re
talking about money that’s reserved for the famine. But when that time
comes, use it. Joseph saved up grain for years, but when it was needed
he opened up the doors and used the grain.
Basically, I’m saying save up for a rainy day. We don’t normally talk
about saving up for a famine; we talk about saving for a rainy day. But
the thing is, you also need to be smart enough to know when it’s
raining. That’s when you make use of what you’ve saved. You don’t want
to hold onto it so tightly that you forget what it’s for. You don’t
want to hoard it. You don’t want to cling to it so tightly that it
doesn’t help you in those times.
Ecclesiastes 5:13 (NLT)
Hoarding riches harms the saver.
You know, a good idea for you would be to follow the 10-10-80
principle. Give God 10% of your income, put 10% into savings, and live
on the other 80%. 10-10-80. That’s a good target to aim for. And for
some… maybe you’re particularly well off or you have a specific gift
for giving or you want to increase your nest egg… perhaps you’d choose
to live on less than the 80% in order to direct more into the other
two. But 10-10-80’s a pretty good place to start.
Okay, those are four
principles that can help you move from being in debt to discovering
financial security…
1. Develop a plan to pay off your debt
2. Know what you’re getting into before you buy
3. Always give to God first
4. Prepare for times of famine
And there are lots of others things we could have gotten into and
perhaps we will in another message series. But for now, if you’ll just
take those four principles and apply them consistently, you can say
goodbye to the stress you’ve been under because of your debt load, and
in its place you can experience a sense of peace, because you’ll know
you’ve done what you can do, and God will help with the rest.
Included on
Bulletin Insert:
Miscellaneous Tips for Reducing Expenses
Drop a package
or two from your cable.
Shop around for insurance. Keep
higher deductibles (if you can afford to).
Exercise the “water option” in restaurants. The
mark up on soft drinks is remarkable.
Use coupons. Check out websites
like www.redflagdeals.com and www.save.ca.
Buy generic. Okay, if you must
have Heinz, buy Heinz. But as a rule, buy generic.
If you’re handy at do-it-yourself projects,
go for it.
Consider setting the temperature 1 or 2
degrees lower. Use a blanket instead—it’s paid for! Think
about getting a programmable thermostat.
Reduce the frequency of some expenses. For
example, go an extra week between haircuts.
Wait for sales. Everything
eventually goes on sale, and you can save a bundle.
Beware of impulse buying. If you
see something you “must have”, decide that you’ll go back for it later.
Maybe by then you’ll realize you don’t need it after all.
For Savings, maximize your RRSP. This
has considerable tax benefits.
Stop financing purchases! Even at
0% interest, the penalties can be severe for just one late payment. And
you may be paying for the item long after it’s gone. When you finance,
you’re stealing from your future income.
Eat out less often.
Learn to pay cash. That way you
always know the money’s there. And psychologically, there’s something
powerful about having the cash go through your hands.
Quit smoking or drinking.
Downsize. You can save in a
multitude of areas.
Take vacations in the off-season,
and only when you can pay for them without going into debt. There are
plenty of low-cost options available—camping, hiking, visiting family,
staying within driving distance…
Insure the big stuff, don’t sweat
the small stuff.
Stop buying lottery tickets. The
lottery makes money because people don’t win as much as they lose. Same
with any form of gambling.
Don’t buy extended warranties.
They only sell it because they make money on it.
If you get a tax refund, treat
yourself to dinner out. Then put the rest of it toward paying down
debt. If no debt, then invest it.
Do not cheat in your taxes! Not
only is it morally wrong (i.e. sin), but it may cost you a lot more in
the long run.
Take advantage of all legal deductions.
(e.g. child care expenses, professional fees, business losses, moving
expenses, charitable giving, tuition fees, medical expenses…)
Call your creditor and ask for a lower
interest rate.
Keep your receipts, even if you
just throw them into a shoebox each year. You never know when you might
need one.
Pray about your finances. This
does not abdicate personal responsibility for poor choices, but God can
provide in ways you can’t even imagine. Plus, studies show that prayer
actually reduces stress.
Pay more than the minimum on your debts.
You’ll pay them off faster and cheaper.
Find a no-fee bank account.
Build an emergency fund of at least $1000.
This will help keep you out of debt when emergencies arise.
Focus on paying off your smallest debts
first, while paying the minimum on the rest. Then when it’s
paid off, add that payment amount to what you’re paying on the next
highest. Continue this “snowball” until every debt is paid.
Use the library. You can even get
DVDs there now. Oh, and check out some of the books on personal finance.
|
