Managing Our Debt
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One of the biggest problems in America today is debt. We know that the government doesn’t know how to manage money, and for that reason our country has a national debt of $30 trillion with an annual revenue of only $4.5 trillion.
The average American household looks like this as of Sept. 17, 2021; [$147,000]
Mortgage: $208,185 Credit card: $5,315
Personal loan: $16,458 Student loan: $38,792
Regardless of income, the typical American family lives from paycheck to paycheck. If they miss one paycheck, they are in big trouble. Most American families spend more than they earn.
P. T. Barnum once said, “Money is in some respects like fire; it is a very excellent servant but a terrible master.” Many people’s finances are like a fire out of control. Putting out this “financial fire” requires knowing how we get into debt and how we can get out of debt.
Higle, T. C. (2007). Journey into Living Wisely in a Foolish World: A Study of Selected Proverbs (p. 31). Tommy Higle Publishers, Inc.
7 The rich rules over the poor, And the borrower is servant to the lender.
1. How We Get Into Debt;
1. How We Get Into Debt;
Credit Cards- the ability to buy now and pay later.
Too many people do not count the cost of credit card spending.
Suppose you owe $8,000 on a credit card. You make a monthly payment of $113.40 (which is more than most required minimum payments) at 17% interest. It will take you over forty years to pay off the $8,000, and you will pay about $52,000 in interest. This makes a total of more than $60,000 for borrowing only $8,000.
28 For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—
29 lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him,
30 saying, ‘This man began to build and was not able to finish.’
18 Poverty and shame will come to him who disdains correction, But he who regards a rebuke will be honored.
Studies show that we spend 30% more when using a credit card as opposed to cash. If you shop at WalMart only, you will spend more than you would if you shop at a grocery store.
Vehicles- most people want to ride in style and buy a vehicle based on want instead of need.
Average new car cost
New vehicle category Average total Average total
cost per month transaction
Small sedan $603 $23,903
Small SUV $708 $32,258
Medium sedan $781 $30,281
Medium SUV $831 $43,623
Full size pickup $966 $57,267
On average a new car loses 20% value when you drive it off the lot. If a car costs $40,000 it depreciates $8,000 when you sign the paperwork. It also depreciates 10% during the first 12 months. So in your first year of owning a new vehicle you would lose $12,000.
What makes one want to buy something they can’t rally afford? Pride
23 A man’s pride will bring him low, But the humble in spirit will retain honor.
2. How To Get Out of Debt;
2. How To Get Out of Debt;
Quit Robbing God- If you want God to bless your finances then quit robbing Him of what is His.
8 “Will a man rob God? Yet you have robbed Me! But you say, ‘In what way have we robbed You?’ In tithes and offerings.
Do you know what the difference between stealing and robbing is? Stealing is taking something that belongs to someone else when they are not around. Robbery is taking of personal property in the possession or immediate presence of another.
When we don’t tithe, we are not stealing from God; the Bible says we rob God because we take His money while He is looking at us.
Higle, T. C. (2007). Journey into Living Wisely in a Foolish World:
Be Content with what you have- Enjoy what you have and quit worrying about what you don’t have.
10 He who loves silver will not be satisfied with silver; Nor he who loves abundance, with increase. This also is vanity.
6 Now godliness with contentment is great gain.
7 For we brought nothing into this world, and it is certain we can carry nothing out.
8 And having food and clothing, with these we shall be content.
9 But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition.
10 For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows.
Cut up your credit cards- if you can’t control impulse buying, you need to perform plastic surgery on your credit cards.
20 The wise have wealth and luxury, but fools spend whatever they get.
Start paying them off one by one starting with the smallest credit card debt. Once you’ve paid it off, add what you paid on that card monthly to the next credit card and so forth. Small victories in paying off debt goes a long way in winning the war!
Get on a budget- Everyone should have a budget of monthly income and expenses. This is the best planning tool for wise spending/saving.
5 The plans of the diligent lead surely to plenty, But those of everyone who is hasty, surely to poverty.
Never borrow money for depreciating items- depreciating items are clothing, furniture, TV, electronics, computers, new cars [48 months]. If you charge these items then you are paying interest on things that lose value the minute they are purchased and you carry them home. You’re losing money before you even get any use out of them!
Homes and businesses usually appreciate and to borrow money on them if its not out of your income range will usually be a good investment.
Money is a method in which God tests our faith. How one handles their money reveals how you really think about God and His Word.
11 Therefore if you have not been faithful in the unrighteous mammon, who will commit to your trust the true riches?
3. A Debt We Owe;
3. A Debt We Owe;
There is a debt we owe that cannot be repaid but it requires that we make regular payments. Our Salvation in Christ
We can never pay for salvation nor could we ever repay for what God did for us through His Son, Jesus Christ.
8 For by grace you have been saved through faith, and that not of yourselves; it is the gift of God,
9 not of works, lest anyone should boast.
10 For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand that we should walk in them.
Since we are saved, and created in Christ Jesus for good works, there are 2 debts we owe that demand regular payments until we are in glory with Christ!
We owe Christ the debt of living a holy life.
12 Therefore, brethren, we are debtors—not to the flesh, to live according to the flesh.
13 For if you live according to the flesh you will die; but if by the Spirit you put to death the deeds of the body, you will live.
14 For as many as are led by the Spirit of God, these are sons of God.
We owe a debt to the unsaved world.
14 I am a debtor both to Greeks and to barbarians, both to wise and to unwise.
15 So, as much as is in me, I am ready to preach the gospel to you who are in Rome also.
16 For I am not ashamed of the gospel of Christ, for it is the power of God to salvation for everyone who believes, for the Jew first and also for the Greek.
Close;
God has given each one of us the ability to pay our debts [materially/spiritually].
8 And God is able to make all grace abound toward you, that you, always having all sufficiency in all things, may have an abundance for every good work.
We just need to be wise stewards of His grace!