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Christian Finances 2 expands the Biblical money principles into credit and debt management, savings and investment.

Christian Finances-2 (Credit, Debt, Savings, Investments, Attitude)

Continued from Christian Finances 1.

Managing Credit and Debt:

Some recent studies reveal that the average US household has $ 15- 25,000 in credit card debt.  This household pays $ 225-375 every month in interest alone for their credit cards.  That may be what's average, but Christians are not expected to be average.  The Bible says debt is slavery (Pr 22:7)  Jesus said you can't serve both God and money (Mt 6:24).  Paul said to let no debt remain outstanding (Ro 13:8).  I know God realized there would be times we need to borrow, which is why He made rules for usury and cautioned against co-signing loans.  Still, it's pretty clear we are to arrange our finances to be as debt-free as possible to allow us the freedom to serve Him.  For help on managing debt, mortages, etc. see our pages Debt Free Christian Life and Home Mortgage Basics For Christians.  Here in the US, it costs about the same to rent a dwelling as it does to buy one on mortgage.  Since the mortgage allows you to eventually own a real asset, it makes sense to have a mortgage.  This doesn't justify cashing out equity with refinances or lines of credit, however.

Here's another tip!  Want a 20% raise?  Save for everything you want and pay cash for it.  You can earn 4% on savings and avoid 16% interest payments...that's 20%.  This tip has the added bonus that you buy fewer things because, by the time you've saved for them, you find you don't want them.

Savings and Investments:

Alan Greenspan, in a Feb 2005 report to Congress, revealed that the average US household saves only 1% of its income.  It was reported in January 2006 that U.S. household savings was minus 1% for the first time since the Great Depression.  It's interesting to hear people talk about their trip to the store.  For instance, most will say after buying something, "I saved XXX dollars."  Hold on to something solid...I'm gonna shock you...Ready?  You saved nothing!  When you buy something, it's called s-p-e-n-d-i-n-g, not saving.  Saving is when you don't buy something and put the money away.

"The quickest way to double your money is to fold it in half and put it in your pocket."  Will Rogers

Wise people store up choice things but a foolish person consumes everything he has (Pr 21:20).  Ever wonder how people who seemed not to have much end up with significant amounts of money when they need it?  If you save a little at a time it will grow into a lot (Pr 13:11).  Some of the harshest words Jesus spoke were about the "wicked" servant who didn't put the master's money in the bank so it would earn interest (Mt 25:27).  We spend everything we earn (and more) and then complain how unfair it is when we can't make it through a rainy day.  Here's a 2,000 year old news flash...It's gonna rain!  Are you ready for a stormy year?

Personal story:  In 1999, Marsha and I were living on 30% of our income, giving away about 20%, and saving about 50%.  We've since gone through a stock market crash and 18 months unemployment.  If it weren't for the Lord teaching us to live on so much less than we earned, we would have lost our house, this ministry, all our possessions and had to start over at age 50.  Instead, when the income started back up, we were able to pick up where we left off, buy land, build a nice small custom home and begin building this ministry again.  Moral...during fat years save for lean years. (Gen 41:33-36)

After saving for cash purchases and the inevitable rainy day, we can begin longer-term financial planning...investment.  In Mt 25:14-30, the "good and faithful" servants did something with the master's money that the "wicked" servant didn't do.  They invested it at risk for a larger return.  Once we've covered our expenses and a reasonable amount for a 'storm season' we can make long-term investments with a little more risk, to add to the economy and earn a larger return.  For more about investment, see Investment With Low Risk.

Tip!  Once you're ready to invest, to minimize risk, spread your investment over multiple companies in different industries. Balance stock, bond, and real estate investment and get lots of advice from many people (Pr 15:22).

Christian Attitude About Money:

Attitude is important when it comes to money.  This may be why God put so much about money in His Word.  We are not to love money or put it above God, self, or family (I Ti 6:10, Lk 12:15, Mt 19:23-30).  It's obvious what would happen if we thought that highly of money.  We would risk our health, our loved ones...even our relationship with God just to get more stuff we can't take with us after this life.  Sadly, many people live like this.  We also can't hate money.  The Bible is full of examples of how wealth was used to fulfill God's plan (Ex 3:22, II Co 8:19, Lk 10:33).  I've just listed a few examples.  

This topic concluded at Christian Finances 3.

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