Borrowing from Money--for women only

Today, we're just going to get right down to the nuts and bolts about borrowing and credit:

1. We become slaves to the person or bank that we borrow from

• Proverbs 22:7 "Just as the rich rule the poor, so the borrower is servant to the lender." The relationship changes. So whether you borrow from a bank or a finance company or your aunt & uncle or parents--your relationship with that person or company changes. Now you OWE them, and they know it. Every time you get together with family that you've borrowed from, they remember, they're watching you....they're watching you. With creditors, you legally obligate yourself to pay back the balance regardless of the terms, and you are no longer free to use that money for God's purposes.
  

• This is one to memorize to help you when the temptation comes to use the credit card or take on another loan.

2. Taking out loans and buying stuff with credit cards is presuming on the future

• We don't know what tomorrow will bring us. You see--we don't see!

• James 4:13-17 says: "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.' As it is, you boast and brag. All such boasting is evil. Anyone, then, who knows the good he ought to do and doesn't do it, sins."

• Taking out a loan or using the credit card may be denying God the opportunity to provide for you in your need. His timing is perfect, and when we wait for Him, He is allowed to be our hero, our Provider. However, if we are impatient or feel we can "save" ourselves until the Lord provides, we deny Him the glory and an awesome testimony of how He came through for us.

3. Using plastic results in more spending

• Regardless of whether we pay off the balance at the end of the month, statistics show that we spend 12-18% more when we use credit cards than with cash. When the stores offer a 10 or 15% discount, we spend 30% more because we're getting the discount. The stores are counting on you to do your part.

• There is a psychological difference of handling cash which is tangible--when you run out you can't spend more cash. However, with the credit cards and loans, you just see numbers on a statement or in your mind and since you're borrowing already, what's the harm in borrowing a little bit more?

• Just think of the difference in making auto purchases when we have cash rather than taking out a loan. For some of us, it seems impossible to be able to purchase a reliable car without getting a loan, so we go for whatever payments seem reasonable and get the best car for the payment. You will find, however, that what you REALLY can afford is what cash you have in your wallet or checking account.

• You don't have to have a credit card. It's just not as necessary as the world would like us to think. Debit cards can be used in the same way as credit cards if they have the Visa or Mastercard logo on them. You can reserve a hotel room, a car, airline tickets, you name it. You also have the same liability protection as a Visa or Mastercard.

• YOU are NOT your FICO score, Suze Orman says you are, but you are truly NOT your FICO score. You can secure a home loan without a FICO score, you can get insurance, an apartment, a job, etc. without "good credit." It may be a little trickier; you may have to find a manual underwriter for the loan you need to buy a home, but you don't have to have "good credit" to live in the United States or elsewhere. If more of us lived without it, that would become the norm--let's be revolutionaries!

4. Universal Default Clause

• One thing you might not be aware of is what is called the Universal Default Clause that many credit card companies have in their back pockets--it's in the fine print. Let's say you default on your agreement to make your payment on time--even by one day. That credit lender has the option on raise your interest rate to 30-35% because of that one late payment. No warnings, no second chances--even if your payment record is pristine.

5. Cosigning for a loan shows a lack in judgment

• There's a reason why the bank won't loan this person money, so they need to find someone who is less of a risk to guarantee that the loan will be paid.

• You are legally responsible to pay back the loan if the other person flakes out on you, and statistics show that a great majority of those people WILL flake out on you, and you will be left to sell the possession and pay the balance or take over payments.

• God gives us specific instructions on this one:

  • Prov 6:1-5 "My son, if you have put up security for your neighbor [cosigned], if you have struck hands in pledge for another, if you have been trapped by what you said, ensnared by the words of your mouth, then do this, my son, to free yourself, since you have fallen into your neighbor's hands: Go and humble yourself; press your plea with your neighbor! Allow no sleep to your eyes, no slumber to your eyelids. Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler."

  • Prov 11:15 "He who puts up security for another will surely suffer, but whoever refuses to strike hands in pledge is safe."

  • Prov 17:18 "A man lacking in judgment strikes hands in pledge and puts up security for his neighbor."

6. The Lord calls us to pay our debts

• Read Romans 13:7-8

  "Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law."

Balance, just like anything else in our lives, we can swing from one end of the spectrum to another. In personal finance, you can go from uninhibited spending to penny-pinching, miserly saving. From poverty-causing generosity to lonely-wealth and riches.

When we want to lose weight, we can get so focused on buying, preparing, counting calories or points, numbers on the scale or the tags of our clothes--so focused that we lose sight of our relationship with Jesus. Neglect, too, causes us to deny or reveals our denial that we need to use ANY kind of self-control.

Getting out of debt and staying out can be just as much a balancing act. Counting every penny, getting so on fire to get rid of the debt that we have little saved to pay for those "emergencies." The other end is to keep piling on the debt, seeing no way out and giving in to building up more and more debt.

In finances, just as in other areas of our lives, we need to maintain balance.

So if we're in debt, how do we go about getting out of debt?

1) Start with $1000 for an Emergency Fund -- break the cycle of debt (don't skip this one)

• Ways to build this quickly is to have garage sale, secure a second job, start a home-based business, sell possessions on ebay.com or craigslist.org. You can always find these things later when you have saved up cash to purchase them if they are still needed.

2) Prepare a budget

• We talked about spending in the previous week, and homework throughout this study has been to build up to the point where we can view our current budget and soon adjust to one that will help us achieve our financial goals

• One thing I recommend as you're paying off debt is to stop 401K or other investment contributions until you have paid off everything but the house and have 3-6 months of expenses saved for your "fully-funded" emergency fund.

3) Make a list of all your debts

• Having it all out there in front of you on paper may be a little bit daunting, but it is also freeing to see that maybe it's not really as bad as you thought it was.

• You can also now call the credit card companies to negotiate a lower interest rate. If you have been on time with your payments and have a good history with them, they are more likely going to work with you--especially if you suggest that you may be looking to transfer your balance to another card.

4) Put any extra money on smallest debt while making minimum on others

• First you will need to do everything you can to get current if you are behind on payments.

• Once you are current, you will want to pay only the minimums on all your debts except for one--the smallest balance. On that one you will put ANY extra money that you are able to pay your debt on top of the minimum payment. You will continue like this until the smallest balance is paid off.

• It is very ineffective to spread the money to pay off debt around to several cards or loans. Focus the money on one and pay it off as quickly as you can. It is great motivation to continue when you can close that first account, and you have one less debt to worry about paying on time.

• Once the smallest debt is paid, you transfer all that you were paying on that one to the second smallest debts minimum payment. You continue this until it is paid off and you continue rolling along and building your payments without having to actually pay more than you were at the beginning.

• Do this for everything but the house. If you have a mortgage, it is wise to pay off the house, but it is generally not included in the debt snowball.

5) Increase Emergency Fund to 3-6 months expenses (not income)

• The money used to pay down debt can be rolled into savings until you have it fully funded.

You can find much more detail in The Total Money Makeover which I highly recommend you read after you have read The Treasure Principle.

This week's Bible study can be found by clicking on this link: Borrowing

This week's homework is to fill out the Income & Expenses worksheet with the information gathered from the 30-Day Diary. If you have not completed the 30-Day Diary, just hold on to this one and fill it out when you are ready.

Download it here: Income & Expenses worksheet. You can also find other helpful materials on the Crown Financial Ministries website at Crown.org.

Notes on Debt Delayed

Forgive me, ladies, for not posting last week's notes and homework yet on the blog. It's been a bit of a rough week with lots of distractions. I will have extra hand-outs on Thursday if you would like to get them then. I hope to post the notes this weekend for both sessions.

Spending (from Money for women only)

Let's imagine that you need to go to the doctor's office because you're really sick, but you don't know what's wrong. Your husband is going to drive you, and you're pretty sure he knows how to get there. You have exactly 35 minutes until your appointment time and you remember that it takes you 30 minutes to drive there under normal conditions.

So, you get in the car and you're on your way. On the way, your husband decides you MUST stop to get gas and a coke even though you have 1/2 a tank, and then when you're back on the road, he makes a left turn when he should have gone straight, and you're thinking, "He must know a short-cut, so I'll just wait and see how we get there going this way." He takes a couple more turns and you end up on a lonely country road in the middle of nowhere, and now it's 10 minutes until your appointment. Now, you start to ask him questions like, "What street is this?" and "Where are we going?" and saying, "I don't think this is the way."

Your husband was thinking this the entire time, but he was afraid to say anything either because he didn't want to appear foolish.

Now, you're late for your appointment and totally lost--and you're both frustrated, stressed and you're starting to really feel awful--because you're sick, remember?

What happened here? You KNEW how to get there, but you didn't make sure your husband was on the same page. You didn't ask him any questions or let him know your time constraints. You didn't say anything when he started making wrong turns. He didn't have the same plan you did, but you didn't know that because you didn't communicate the plan before you left.

That's a lot like how we budget and spend our money (God's money). We have a plan in our head as to how we're going to spend the money, but we don't effectively communicate it to our spouses. Either they don't care or assume you're handling it pretty well because you haven't said anything.

A written budget is a "spending PLAN." Let me repeat that... A written (on paper) budget is a spending plan made out before you spend the money--BEST discussed by husband and wife together. Written or typed so that you can review it and check the numbers so that it's not just a guess or estimate, and when something else pops up, it doesn't throw everything out of whack.

"Plan to spend" -- that reminds me of when we were pinching every single penny to pay off our debt, and I would tell Gabriel I was going to the grocery store, and he would reply by saying, "Don't spend any money." Well, I certainly can't get EVERYTHING for free, and we had children to feed--I had to have a plan because I WAS going to spend money, but without a list or plan, I would spend WAY more than I had hoped.

Did you know that God was a big planner? Very detailed, too.

Most of you know Jeremiah 29:11:

• "For I know the plans I have for you," says the LORD. "They are plans for good and not for disaster, to give you a future and a hope."

What about Psalm 40:5?

• O LORD my God, you have done many miracles for us. Your plans for us are too numerous to list. If I tried to recite all your wonderful deeds, I would never come to the end of them."

He wants us to make plans, too, but plans that are for HIS glory. Listen to Psalm 20:4-5:

• "May he grant your heart's desire and fulfill all your plans. May we shout for joy when we hear of your victory, flying banners to honor our God. May the LORD answer all your prayers."

So if we look at our budget as a spending plan to honor God, it's not that four-letter word you think of when you hear the word "budget." It's instead a plan for FREEDOM!

This is what we do when we make a written budget:

• Plan for the expected & unexpected

  Proverbs 22:3 says, "A prudent person foresees the danger ahead and takes precautions; the simpleton goes blindly on and suffers the consequences."

• Plan for wise spending (budget, impulse list & wants vs needs)

• Plan to get out and stay out of debt

• Plan to give

These things don't usually just happen to you--like Keith's message on Sunday, we have to be intentional and "prepare our minds for action" and initiate the plan, the change, yes, the cut-backs or sacrifices necessary to make the plan work. You don't want to make the plan so rigid that you cannot follow it without a mistake here or there--you need to make changes monthly because a budget will not remain the same unless all your spending and income always remain exactly the same.

Now, I said that a budget is a plan for freedom--let's take a look at that:

How much freedom is there when there's only $10 in the bank and you need to buy food for the week to feed your family? If you're like me--this can make you feel like a failure, guilty for not being able to give your family the healthy meals they need to thrive. Think of what it does for your husband when he feels like all the work he's doing comes to this! Or maybe you don't have enough money to pay for the course you need to finish your degree or get ahead in your career or fix things around the house when they get broken? Any way you look at it, that feeling you get when you realize that you've not planned well with the money God has given you is NOT freedom.

There really is freedom in realistic, careful planning, and discipline to stick with that plan and revise it often while communicating with your spouse, asking him for his input---these things help you get where you want to go, where God wants you. For example, look at the Goal Setting exercise you received last week and hopefully got some work done on it--where are you headed?

Proverbs 21:20 says,

• "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has."

Let's plan how we're going to spend His resources before we foolishly spend whatever we get.

This week we will begin reading The Total Money Makeover by Dave Ramsey. We will spend a few weeks on this one, so if you haven't read The Treasure Principle yet or Your Money Counts, you still have some time to get one in. Check around, you might be able to borrow a copy if you have not purchased one already.

Click for Bible study for the week: Week 4 -- Spending

I'm going to give you all a break in homework in order for you to catch up on the previous weeks' homework (taking inventory, filling out the financial statement, recording expenses, writing down goals and discussing them with your spouse, etc.). You can also take this time to catch up on your recommended reading. Once you have enough information on your 30-Day Diary, we can compile your current budget, so don't delay!

Work (from Money for women only)

Have you ever worked really hard and found that you were quite productive only to look around at your co-workers, employees, family or husbands who were all just sitting around playing, sleeping or just lounging around? Or that no one notices how hard you've been working or rewards your accomplishments? And have you ever just resented them so much that you got so angry you wanted to yell or scream or cry?

That's where I was on Saturday.

You see, I had been rudely awakened by my cat when I wanted to sleep in, but I got up and decided to have my quiet time with God before everyone got up and distracted me.

Then, starting at 7AM, I was on the move--beginning with whipping up some yummy waffles for the whole family; then, I've been working really hard these past couple of weeks trying to keep the kitchen clean all the time, so I cleaned up everything in the kitchen after I slaved over the waffle iron making extra for the week to come, too. Once the kitchen was clean, it was time to get the kids moving! While hubby was working/playing with his musical-electronic equipment, I was playing drill sergeant to four children ages 4 to 12 who had no inclination to do ANY work on a Saturday morning. Overseeing making of beds, cleaning the bedrooms and bathroom, and sorting clothes for the laundry takes more energy out of me than actually doing it myself!

Once their laundry was sorted, it was time for me to do load after load of their laundry which may or may not actually make it to the closet and the dresser when it's finished.

In between loads, I sat down at the computer to work on the budget, log expenses and pay bills. Stressing that Gabriel wanted to go to some high-end shoe store to buy running shoes! Can we say "dollar signs"???? Very relieved when he decides not to go there and scale it down a little....whew.

After that, cooking lunch and yes, cleaning up the kitchen again afterwards. I cut coupons and got my list ready to go to the grocery store, cleaned our bathroom (okay--not really cleaning--just a little bit of tidying up), swept the kitchen, fed and watered the cat, picked up cat poop since the cat wasn't having such a great day either.

Then it comes; we were going to go out on a date that night (just a short one to let Kate--our 12-year old--babysit), and I asked if we would go before or after the kids were in bed---hoping he would say we could go out to eat--then I don't have to cook and clean up after everyone. (I didn't say it---was hoping it would be his idea.) No. He says, later as I'm dragging stuff out to cook something, that since I'm going to cook, I might as well cook for everyone--so my take on that was, "Go ahead and work, and we'll go out later," on his day off--not mine.

Yeah, I was feeling pretty sorry for myself--to the point of tears in front of the garage door--crying out to God. Yes, I was in the garage so no one would think to walk in on me while I'm in the middle of complaining to my Father--telling on my husband and children.

I knew that when I was talking with Him that I was going through the pain of feeling unnoticed, unrewarded and alone--to bring this to you because I have no doubt that each and every one of you has felt that way at one time or another.

You work and you work and you work and the ones around you skate by on doing very little. OR...your hard work goes unnoticed and unrewarded. You've managed to do something pretty special, but no one is sensitive enough to do something to make you FEEL special.

As I'm standing there, seeking God for comfort in the garage, I hear Him saying to me, "It's not for Him to reward you. I'm your boss."

For you see, He knows I know that. I know it, but it still hurts my feelings when my husband after 15 years still doesn't anticipate my needs and do everything he can to fulfill them all. Yeah, I learned that my expectations of my husband have been too high--I've put him in the place of God in that regard, and that's messed up! Only God is the one who says He'll provide for ALL my needs according to His glorious riches in Christ Jesus--and He's the only one who can prove it.

Here's the key verse for this morning: Colossians 3:22-24

"Slaves, obey your earthly masters in everything; and do it, not only when their eye is on you and to win their favor, but with sincerity of heart and reverence for the Lord."

Now, how is it that we show reverence for God when we "do what we're told" for our earthly boss even when he's not around to notice? I'm not saying our husbands are necessarily our masters, but when we seek his favor, is that not kind of what we're doing?

Paul explains it further in verses 23 & 24

"Whatever you do, work at it with all your heart, as working for the Lord, not for men, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving."

We need to act like we're working for Christ, even if it's a total drag and seemingly unrewarding, because Jesus really is our boss and He is the one who will reward us and of whom we should be seeking favor. See, we show him reverence because we are seeking to please Him by pleasing our earthly boss when he's watching and when he's not. When our husband notices and when he doesn't.

There's more to it, too. Did you know that since Christ is our boss, and our husband's boss, that only Christ has the power to hire and fire employees, promote and demote, and to give raises to those who work diligently?

Psalm 75:6-7 says, "No one from the east or the west or from the desert can exalt a man. But it is God who judges: He brings one down, he exalts another."

God provides the work, God provides the strength to work, God provides the income from the work, God provides.

There was one instance after Gabriel and I had understood this principle for some time that we decided together that Gabriel should ask for a raise at work. However, he did not approach his earthly boss first, we both asked God for wisdom and also for provision for an increase in income. Then, after some research and preparation, Gabriel approached his boss, and he was given no encouragement whatsoever--he basically said, "It doesn't look good, now's not a great time."

However, we did not take that as discouragement, we continued to pray for God's provision, and the next day, Gabriel's boss came back with good news! There was no indication of how much it would be or when it would be, but that there was going to be some reward coming. After more prayer when things didn't look like they'd go through, the Lord rewarded Gabriel with a real blessing, honoring Gabriel's effort and faith. Even when things don't look good for the company you work for, or when you're out of work and it doesn't seem like anyone is hiring--remember, it's the Lord who is your Master, who hires and fires, who brings down and raises up. He's the one who rewards your work and your faith.

There is so much more I want to share with you about work from Titus 2 and Proverbs 31 that we just don't have time for, but I do want to share this...

Whether you're a stay-at-home mom, work outside the home full- or part-time, own your own business or volunteer your time--the common thread is that we women DO work, and we do need to avoid idleness but also get the proper rest, too. Whatever you do, work hard and cheerful, but don't try to do more than you are able to, and trust God that when you take that one day off that He will provide for you through your work on the other six days.

So, when you're feeling like you're working and no one else is, ask for help, let them know what you'd like them to do (if it's within your power to do that). Don't expect them to read your mind or do something you haven't asked them to do yet and don't expect praise and reward from them, but seek the Lord and seek his favor and know you will be rewarded with a great inheritance. "It is the Lord Christ you are serving."

At this point, Marge King came up to give a short testimony on her experience with work and with giving which is the subject we covered last week. Again, I will not include the testimony here--make sure to ask her sometime!

Our homework for the week can be downloaded here:

Week 3 Bible Study -- Work

Goal Setting Exercise

(Print two of the Goal Setting Exercise if your husband would like to work on this separately, then you can come together to discuss and prioritize your goals.)

We're still reading through Your Money Counts by Howard Dayton and will discuss more next week. Have an awesome week!

Bible Study & Homework now downloadable!

I am now able to post the weekly Bible study and homework assignments online without having to e-mail them thanks to my super-smart, absolutely fantastic husband, Gabriel! You can now receive all you need for the Bible study here each week. Please feel free to let me know if you have any trouble or have any questions.

God's Job vs. My Job Bible study (week 1)

Quit Claim Deed fill in items of value as well as children and pets that you are transferring ownership over to God, sign and have witnessed

Inventory Homework

Giving Bible study (week 2)

Net Worth help (handy definitions) and Financial Statement form (use the information from the Inventory to complete this page)

30-Day Diary to record expenses (every penny--cash, check, charge, debt, etc.) . You do not need to fill in "budgeted" amounts yet unless you choose to.


*Financial Statement and 30-Day Diary provided by Crown Financial Ministries website www.crown.org