Dealing with Debt

Debt is the financial cancer of middle income America. I use the word “cancer” very carefully considering so many families have been affected by this disease. However, it best represents what is happening when families get into debt. Putting it simply, cancer is when cells multiply uncontrollably. It starts small and continues to grow until it affects the entire body.

Debt affects us the same way. Most people tend to look at debt from the position of what is the monthly payment. They evaluate a loan with the idea of how the payment fits their monthly budget. The debt load creeps up until we find ourselves owing large amounts and not having the cash flow to make a significant change if we had to. The danger is that cash flow can change very quickly and it is not totally within a person’s control.

As consumers, we evaluate debt by seeing how it fits within our income. However, there are more important things to consider. Ask yourself what criteria you would use to evaluate a loan. If you are like most people, the first thing that came to your mind is the interest rate.

Interest rate is an important key, but by no means the most important. People have been trained to look at this number and assume that a lower number means that you will pay less to the lender. The interesting thing is that you can change the effect of that rate by how you make your payments. There is a difference between the rate and the effect of that rate. Is interest rate important? Yes. Is it the most important? No.

The type of loan is the next criteria people consider. Is the debt a fixed loan, such as a car payment or is it a revolving loan, such as a line of credit. Comparing fixed and revolving is similar to comparing apples and oranges. The key here is how interest is calculated and how you intend to make the payments. When a person controls how they pay the debt, they also change the effect of the rate.

How the loan influences a person’s overall cash flow is the key. If you ever want to eliminate debt quickly and reduce the interest paid to the lender, then cash flow is the answer. Discretionary income applied properly will reduce debt quickly. However, discretionary income applied improperly does not provide the necessary traction to achieve debt freedom quickly.

Debt elimination starts with a decision and a determination to become debt free. It takes more than a wish, but an intense desire. Step two is the game plan that will allow you to gain financial traction. The game plan needs to be done wisely finding the quickest way to eliminate the debt. The final step is following through by implement the plan of attack and seeing it through.

Many people approach debt with the idea that they can get themselves out. Can they, yes. However, Albert Einstein said it best when he said that you cannot solve a problem using the same kind of thinking that it took to create it. Operation Crusader can help. We can run an analysis of your debt at no charge. Yep, that means “free” to see how quickly we can help you become debt free. Debt has a cure. Are you tired of being in debt? What are you going to do about it?

Bob Mlynek
www.OperationCrusader.com

Financial Stewardship

For far too long, stewardship has been viewed in the narrow terms of the amount of money that is given to the church. Stewardship has become synonymous with tithing. The time has come to set the record straight and reclaim true stewardship.

In the King James time, a steward was the person who was second in command of the kingdom. Even though they owned nothing of their own, their role was to make sure all of the assets of the kingdom worked together for the benefit of the king and the kingdom. They controlled all of the assets from the farmers to the blacksmiths. For the kingdom to survive and thrive, everything had to work together. For that service, they lived in one of the nicest properties and were trusted and well taken care of by the king.

We have been given the task of being the financial steward of everything that God has given to us and to manage it with the purpose of benefiting our King. How we manage our lives and finances has a direct correlation to our Christian walk. We need to recognize that we have been given the authority and the responsibility to manage what God has given to us for His honor and glory. The challenge is that so few people have ever been taught how to take charge and reclaim financial stewardship.

Sometimes we approach this with fear. We believe that if we would relinquish our finances over to God that He would require us to give everything away and live like paupers. Could God do this? Sure, if God chose to, look at Job for example. However, God derives glory from a person honoring him with their entire lives including their finances. The scriptures are full of passages that either discusses finances directly or financial principles. In fact, the Bible speaks more about money than it does about Heaven and Hell combined. The sad truth is that the only sermons people ever usually hear about finances deals specifically with tithing.

The issue is how we can expect people to handle their financial lives in a Godly way if the church has abandoned teaching on the topic. This is not really the pastor’s fault. Seminaries and Bible colleges do not teach on the subject. In fact, after counseling many pastors, I find that many of them are in the same financial boat as most of their congregations. Money has become one of those taboo subjects that everyone keeps on the shelves. It is safer for the pastor and most congregations prefer it that way.

It is time to relearn handling money God’s way. The world has their system and goals. According to Romans 12, “we are not to be conformed to the image of the world, but be transformed by the renewing of our minds.” We are to think differently. This includes our financial goals and lives. God already has given us financial wisdom throughout His word. This includes many issues ranging from getting out of debt and cosigning loans to saving for the future and budgeting.
Take the time to find out what God says about what He has entrusted to you. Are you managing it in the way that He has instructed? Are you working towards His goals or your own? To truly honor God, we must relinquish ownership and recognize that we are just managing it for God. Anything else is just lip service.

Bob Mlynek