Living on the Edge: Faithful Stewards for God’s Kingdom
o How does God view debt?
The rich rule over the poor,
and the borrower is servant to the lender.
- Deut 28:43-44
Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed,
respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love
each other, for the one who loves another has fulfilled the law. (Romans 13:7, 8)
o What does debt reveal about our attitude? - James 4:13-16
- Debt can weight us down, cause us to miss opportunities to be generous, and to store up treasure in
- However, while discouraged, debt is never explicitly prohibited in the Bible.
o Is any debt permissible? Possibly, if the following can be answered with a “yes”:
o Is the asset an appreciating asset?
o Value of item exceeds amount owed with a large margin of safety
o The debt service is reasonable on the budget
o Efforts are being made to pay down the debt as quickly as possible (Prov. 3:27-28)
Types of debt:
- Credit card (Pay off balances) - Auto (70% of cars are financed in the US)
- Mortgage - Investment
- Home Equity Line of Credit/Loan - Business
After giving and taxes, no more than 38% of your income should be spent on housing. 25-30% is a good target.
Total additional debt should not exceed 5-10% of your income after giving and taxes. The goal is to have no
debt at all. The mortgage is an exception, but zapping should also be a high priority.
o Interest rates really matter!
Debt Interest Rate Term Total Cost with Interest
$10,000 5% 5 years $11,323
$10,000 10% 5 years $12,748
How to get out of Debt:
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2) Establish a written budget- Income problem, 7) Pay off debt from highest to lowest interest
spending problem, or both? rate- However, I recommend you knock off
3) Stop accumulating all debt some of the smaller debts first, regardless of
4) List all assets – Are there items you can rate as this will encourage you.
sell? 8) Be content with what you have
5) List all liabilities (everything you owe) 9) Consider earning additional income- Can the
6) Establish a debt repayment schedule for shopping and TV watching!
each creditor (use online calculators if you 10) Consider a radical change to your lifestyle
like) 11) Don’t give up. It will take time.
Dave Ramsey’s Seven Baby Steps
Baby Step 1
$1,000 to start an Emergency Fund
An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an
unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events
will happen; it’s simply a matter of when they will happen. Learn more
Baby Step 2
Pay off all debt using the Debt Snowball
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t
worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest
rate debt first. Learn more
Baby Step 3
3 to 6 months of expenses in savings
Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all
your “extra” money into investments quite yet. It’s time to build your full emergency fund. Learn more
Baby Step 4
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Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund.
Now it’s time to get serious about building wealth. Learn more
Baby Step 5
College funding for children
By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for
college. Whether you are saving for you or your child to go to college, you need to start now. Learn more
Baby Step 6
Pay off home early
Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to
realizing the dream of a life with no house payments. Learn more
DANGER: STEP #7 CAN BE MISINTERPRETED - ME FIRST, OTHERS LATER, IS NOT THE
WAY TO LIVE!
Baby Step 7
Build wealth and give!
It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others
now with your excess. It's really the only way to live! Learn more
What is your credit card balance? 3000
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What is the interest rate on your credit card? 12%
How is your minimum payment calculated? Interest + 1% of balance
Your minimum payment: 60.00
What fixed payment could you make each month? $
Select a payment schedule based on:
It will take you 208 months to be rid of your debt. In that time, you will pay
$2,544.87 in interest.
Are you applying for a new credit card ?
Considering doing a balance transfer from one card to another?
Received a notice from your bank that your credit card interest rate is increasing ?
Trying to negotiate a lower rate with your credit card provider?
In any of those situations, it's important to know what the different rates mean. Even a relatively small
difference in interest rates adds up to hundreds of dollars in interest per year. See the chart below for a rough
estimate of what you'll pay in a year's period in interest, on a variety of balances ranging from $1,000 to $10,000:
Balance 18.9% 11.9% 5.9%
$1,000 $189.00 $119.00 $59.00
$2,000 $378.00 $238.00 $118.00
$3,000 $567.00 $357.00 $177.00
$4,000 $756.00 $476.00 $236.00
$5,000 $945.00 $595.00 $295.00
$6,000 $1,134.00 $714.00 $354.00
$7,000 $1,323.00 $833.00 $413.00
$8,000 $1,512.00 $952.00 $472.00
$9,000 $1,701.00 $1,071.00 $531.00
$10,000 $1,890.00 $1,190.00 $590.00
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Emergency Fund: Proverbs 21:20
In the house of the wise are stores of choice food and oil,
but a foolish man devours all he has.
• Keep 3-6 Months of expenses in emergency savings. This should be your top priority after paying down
all non-mortgage debt.
• These savings should be held in a savings account or other safe investments…not in stocks! Certificates
of deposit (CDs) may be appropriate depending on the size of your emergency fund.
The Home Mortgage:
• Types: ARMs, Balloons, Fixed, Interest-Only- I recommend fixed rate mortgages
• Terms: 15, 20, 30 year
• Prepayment ability
• Interest Rate
• Principal, down payment, and home prices
• Beware of ARMs, variable rate mortgages, interest-only mortgages, and reverse mortgages! Very few
people know what they are doing with these financing structures.
• Mortgages calculators: - how much can I afford -monthly payment - amortization schedule
- owning versus renting - reasons to own a home - refinancing
• A crash course in real estate!
o Realtors vs. for sale by owner o Not a liquid investment
o Escrow o Fees/commissions
o Home insurance and property taxes o Inspector
o Location, location, location o Appraisals
Co-signing: Proverbs 17:18
Bankruptcy: Psalm 37:21
A man lacking in judgment strikes hands in
The wicked borrow and do not repay, pledge
but the righteous give generously; and puts up security for his neighbor.
Recommended Links for Tools and Calculators:
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LIST OF DEBTS
as of ___________________
Contact Name Payments Monthly Date Interest
To Whom Owed Pay Off
Phone Number Left Payment Due Rate
Crown Financial Ministries 2/03
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U N E M P L O Y M E N T FACT SHEET
When you find yourself unemployed, there are several things you should do.
1. Trust God.
! Check your spiritual pulse. Are you currently walking with the Lord and trusting Him?
! Spend extra time in Bible study and prayer.
! Be sure to read Psalms and Philippians; both can provide comfort and inspiration.
2. Make a list of your assets as a person and as an employee.
How many different ways can you market these assets?
! Identify your transferable skills and career focus.
! Conduct some sort of self-analysis. By discovering your strengths for the workplace, you
will be able to present these to a future employer. You may want to consider taking a Career
Direct® Complete Guidance System online assessment (CareerDirectOnline.org) or purchas-
ing the helpful book, Finding the Career That Fits You. Information on these and other
career resources is available on the Web at Crown.org.
! Outline your work history to show the responsibilities you have had and the types of work
you have done.
! Develop a résumé; keep it to one page unless you have been employed 10 years in the same
field. Be ready to tailor it to fit particular job openings.
3. Get involved with an accountability/support group.
Don’t try to handle it all on your own.
! Share with God and other believers your feelings of loss, anger, depression, and stress.
! Pay special attention to the needs of your spouse and children during this trying time.
! Seek out at least one primary support relationship besides your spouse to help serve as
a career coach.
4. Develop a short-term financial plan.
! Immediately take stock of your finances, including savings, spendable assets, and
income, including severance pay or state unemployment compensation.
! Set up a short-term budget.
J Know your bottom-line monthly needs, including how much money is required to
pay your bills.
J Cut expenses in every way possible.
J Make arrangements with creditors to reduce payments on a temporary basis.
J Project your cash flow and available assets in light of this short-term budget. Determine
how long you can afford to be without a job.
! Call on believers if you need financial assistance or help getting through this transitional
J Many churches have resources available to help with food, clothing, and other needs.
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5. Network through every possible contact.
! Use leads from people you know to make direct contact with potential employers.
! Consider having business cards printed, and on the back put key phrases regarding your
career objective and/or major qualifications.
! Get involved in a church-sponsored job network group.
! Set and meet goals for daily calls and personal contacts.
! Search the Internet for job-listing Web sites such as CareerBuilder.com, Monster.com,
Careers.org, and Intercristo.com.
6. Take care of yourself.
! Eat well, get enough sleep, and exercise regularly.
! Avoid drinking or eating in excess.
7. Maintain a normal daily routine.
Do whatever it takes to make “finding a job” your full-time job.
! Get up and get dressed for work.
! Physically go to your “office,” whether it be a room in your house dedicated to job
search or the local library.
! Covenant with your spouse or a friend to call you and hold you accountable to your
goals and to encourage you in the process.
! Spend six to eight hours per day looking for work.
! Relax, read, and relate to family members and others.
8. Learn to serve others.
9. Continue to trust God and wait patiently for Him to provide your next job.
! If you have the financial resources, use this opportunity to learn new skills.
Resources on next page
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One Christian employment information service is Intercristo.
PO Box 33487
19303 Fremont Ave N
Seattle WA 98133
Crossroads Career Network is a job networking organization based in Georgia.
CROSSROADS CAREER NETWORK
300 Colonial Center Pkwy Ste 300
Roswell GA 30076
Crown Financial Ministries has volunteer Money Map Coaches throughout the country who
offer their services at no charge to Christians who desire to establish budgets that will help them
get out of debt and honor God through their finances. The coaches, ministering under the authori-
ty of their local church, have been trained in godly principles of finance to help people become
worthy stewards of what God has entrusted to their care. Establishing and maintaining a budget is
beneficial at any time but especially when you find yourself unemployed.
Career Direct® Complete Guidance System Assessment
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