Honoring God With Our Money: Dealing With Debt

This week lesson in our series on honoring God with our money covers way to deal with debt and to build credit.  Today we will look at steps to pay off debts and ensure that debt does not entrap.

Steps to Dealing with Debt

1)      Determine in your heart to repay all your debts, as the Lord enables you.

Psalm 37:21 The wicked borrow and do not repay, but the righteous give generously.

2)      Establish a payment schedule that includes all creditors.

    • Make a list of all debts from smallest to largest and/or according to interest rate.
    • Determine to first pay off either (1) the smallest debt or (2) the debt with the highest rate of interest.
    • Make minimum payments on all debts but the one to be paid off first.
    • Allocate as much money as possible each month to paying off the debt being retired first.
    • When one debt is paid off, concentrate efforts on the next debt to be paid off.

3)      Contact creditors and asks for a lower interest rate.  Many lenders will lower the interest rate to avoid default.

4)      Contact all creditors, honestly relate your problems, and arrange an equitable repayment plan.

5)      Buy on a cash basis, and sacrifice your wants and desires until you are current.  Allow God to meet your needs without taking on more debt.

Psalm 37:7  Be still before the Lord and wait patiently for him

6)      Do not cosign for another person unless you are able and willing to pay off the debt if he/she cannot do so.

Proverbs 22:26-27  Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

7)      Do not count on future raises to pay for today’s expenses.

James 4:13-15   Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.  Instead, you ought to say, “If it is the Lord’s will, we will live and do this or that.”

If you are dealing with overwhelming debt, you may need to seek assistance from a debt counselor.  Also seek help from the One who supplies all of our needs.  God wants to help you and is waiting for you to bring your burdens to Him.  Psalm 55:22, “Cast your cares on the Lord and he will sustain you; he will never let the righteous be shaken.”

Please feel free your tips for dealing with debt.

Honoring God With Our Money: Practical Money-Management Tips (Part 1)

This week’s lesson on honoring God with money focused on practical money-management tips.  These ideas have been culled from books, magazine articles, and internet sites, including Crown Financial Ministries and Christian Financial Concepts.

One of the most important tools in managing one’s money is to track monthly expenses.  In the past this was generally accomplished by either keeping a small notebook handy to write all expenses in, recording expenses on an Excel spreadsheet, or using the ‘envelope’ system.  The envelope system involves dividing one’s paycheck into envelopes, each for a designated purpose; when the envelope is empty no more money can be spent on the category of expenses until the following month.

In today’s digital world, tracking expenses can be accomplished more easily by downloading an app onto one’s phone, ipad, Kindle or other electronic device.  Since we tend to have our devices with us at all times, it is a handy, easy way to track expenses. Regardless of the method you use to track expenses, it is very important to consistently track expenses for at least several months so you can identify where your money is being spent.

Grocery sticker shock
Grocery bill sticker shock

Today I am providing lists of ways to save money on groceries and on eating out.  In other posts this week, I will provide lists of other ways to save money.  I hope that you will find at least a few new ideas for saving money in each post.  Please feel free to add your own money-saving tips in the comments.

Ways to Save on Groceries:

1)      Always use a written list and stick to it.  Plan meals for the week before shopping.
2)      Avoid taking your children grocery shopping.
3)      Never shop for groceries while hungry.
4)      Shop advertised specials, especially for nonperishables.
5)      Shop in bulk, if it makes sense for your family.
6)      Use a calculator, if possible, to total purchases.
7)      Reduce or eliminate paper products.
8)      Avoid processed and sugar-coated cereals. These are expensive and most of them have little nutritional value.
9)      Avoid prepared foods, such as frozen dinners, pot pies, cakes. You are paying for expensive labor that you can provide.
10)   Determine good meat cuts that are available from roasts or shoulders, and have the butcher cut these for you.
11)   Try store brand canned products. These are normally cheaper and the same products as name brands with a different label.
12)   Use manufacturer’s coupons and rebates only if you were going to buy the item anyway and it is cheaper than another brand would be without the coupon.
13)   Do not buy from convenience stores except in case of emergency.
14)   Avoid buying non-grocery items in a grocery supermarket except when on sale. These are normally “high mark-up” items.
15)   For baby foods, use normal foods processed in a blender.
16)   Check every item as it is being “rung up” at the store and again when you get home.
17)   Consider canning fresh vegetables whenever possible. Make bulk purchases with other families at farmers’ markets and such. (NOTE: Secure canning supplies during off seasons.)

Eating Out:

1)      Make eating out a special occasion.
2)      Know where kids eat free and take advantage when eating out.
3)      Order lunch size meals OR order dinner size meals and take leftovers home.
4)      Groupon or other restaurant special coupon deals–only buy if you eat at that restaurant.
5)      Avoid buying desserts at restaurants.
6)      Skip the ice cream shop and buy ice cream in the grocery store.
7)      Rather than eating out, throw a potluck party with family or friends.
8)      Make coffee at home; invest in inexpensive pot for the office.
9)      Bring your own snacks to work; take snacks in the car when running errands.
10)   Pack lunches for work.

What are your best tips for saving money on groceries and dining out?

Honoring God With Our Money: Steps to Budgets That Work

Steps to Budgets That Work

The information below is adapted from Larry Burkett’s book Family Budgets That Work.

1)      Include periodic debt (quarterly insurance premiums, annual HOA fees, etc) in your budget.  Set aside a fixed amount each month so that you have the money available when it’s time to pay these irregularly occurring bills.

2)      Set aside amounts to replace furniture, appliances, and fixtures that wear out over time and for replacing automobiles.  This can be included in your savings account, although you don’t want to dip into emergency savings for these items.

3)      Set aside money for family vacations and recreation.  If possible, budget 6% of your income for recreation and leisure.  If you don’t have room in your budget for a nice vacation, consider inexpensive options such as camping and stay-cations.

4)      Control impulse spending.  Make a ‘rule’ to wait at least 24 hours before buying items that you weren’t specifically shopping for.  Often the desire to purchase the item will go away once you have left the store.  If you decide you really want and/or need the item, purchase it only if (1) it fits into your budget and (2) you have the money to pay for it.

5)      Plan for gift-giving.  Set aside money each month for Christmas and birthday gifts.

6)      Watch miscellaneous spending.  Miscellaneous spending is a problem area for most families.  Track all of your cash spending for a month to determine what your problem areas are and then make a plan to deal with the problem areas.

7)      The bookkeeper should be the partner who is best at it, but spouses should work together to establish and maintain the budget.

8)      Develop a good system of keeping records.  Some people prefer the envelope method–put the budgeted amount of cash in an envelope at the beginning of the month and spend only the money in the env elope. Other people use Quickbooks, an Excel, or phone apps to track spending.

9)      Get out of debt.  Pay off debts with highest interest first, while making at least the minimum payment on all debts.  Once the highest-interest debt is paid off, apply that money to the next highest-interest debt, etc.

10)  Commit to using at least 50% of any “windfalls” to paying off debt.  The remainder of any windfalls should be used to meet shortages in other areas, including clothing and leisure.

11)  Set family goals. If your children are old enough, include them in your budget discussions. You will be starting them on the road to good financial management and they will better understand why you cannot always buy them the things they want.  Goals should include:

  1. Trust in God to supply your needs
  2. Save money regularly
  3. Family sharing time
  4. Husband and wife time
  5. Ministry to other people

Honoring God With Our Money: Creating a Budget

Financial Principles to Consider in Creating a Budget

The information below is adapted from Larry Burkett’s book Family Budgets That Work.

1)      Use a written plan.  A written plan helps keep you on track and provides a reference for you.  Adjust your budget as your income and/or expenses change.

2)      Provide for God’s work from the first part of your income.  God enables us to work and provide for our families.  All of our income truly belongs to God.  He asks for only a small portion of it back.

3)      Limit your use of credit.  Avoid using credit cards to purchase items you cannot afford.  Use credit only for large-ticket items that fit into your budget.

4)      Before buying new items, ask:

  1. Is it necessary?
  2. Is it the best buy?
  3. Is it an impulse purchase?

5)     Save regularly, even if it is only a small amount.  Setting aside even $10 or $20 per paycheck gets you in the habit of savings.  Increase savings as your budget allows until you can save 5% of your income.

6)      Set your own goals with your family.  No one else’s budget will work for you.  And your budget will not work for your family if one partner dictates the budget without input from the other spouse.  Work together as team.

7)      Get out of debt.  Develop a plan to pay off small debts first and continue until all debts are paid off.  We will look at strategies for paying off debt in two weeks.

8)    Avoid indulgences and lavishness in your family life.  However, do include  some money for leisure and recreation in your budget.  You will not be able to stick to your budget if you never feel rewarded for all your hard work.

9)     Seek good counsel if you have a question, preferably from a Christian financial counselor.  Crown Ministries (Crown.org) provides many resources to assist you in budgeting.

10)  Stick to your plans diligently.  Make a plan you can live with and follow it.

11)  Balance your checkbook every month or more often.

12)  Use duplicate checks if possible.

13)  Have only one bookkeeper in the family.  This should be whichever spouse is better at record keeping and balancing the budget.

Honoring God With Our Money: Principles of Budgeting

In our study of how to honor God with our money, we are now entering the practical application phase.  This week we examine principles of budgeting.  In the coming weeks, we will focus on applying budget principles, practical money management tips,  living debt-free, and cultivating true wealth.

Planning the Budget

Theme Verse:

1 Timothy 6:17  “Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.”

Budgeting Principles

1)      Recognize that everything belongs to God.  We are stewards of those possessions God has entrusted to us.  We have an obligation to be good and faithful stewards.

Psalm 24:1 “The earth is the _______________, and everything in it; the ____________, and all who live in it;”

Psalm 50: 9 – 12  “I have no need of a bull from your stall or of goats from your pens, for every ______________ of the forest is mine, and the ______________ on a thousand hills.  I know every bird in the ______________, and the insects in the fields are mine. If I were ______________ I would not tell you, for the ______________is mine, and all that is in it.”

2)      Tithe.  God asks us to give back the first portion of what He has given us.  The first tenth of our income should be tithed to do God’s work.

(For Scriptures on tithing, please refer to Lesson 4.)

3)      Meet the needs of your family.

I Timothy 5:8 “If anyone does not provide for his __________________, and especially his immediate _______________, he has denied the faith and is worse than an _______________.”

4)      Pay debts and obligations. 

Psalm 37:21 “The wicked _____________and do not __________, but the righteous give ____________________.”

5)      Establish short-term and long-term savings plans. 

Proverbs 21:20 “In the house of the _____________ are stores of choice food and oil, but a foolish man ____________all he has.”

Proverbs 6:6-8 “Go to the ant, you ____________; consider its ways and be wise!  It has no commander, o overseer or ruler, yet it stores its _______________ in summer and gathers its ______________ at harvest.”

6)      Set aside money for recreation and leisure.

 

 7)      Give money to charitable causes.

Proverbs 22:9 “A __________________man will himself be blessed, for he shares his _____________ with the __________.”