"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.
 

 

 

 

Copyright © Greg Hanson, 2007 SunriseOnline.ca