©1999 Larry Huntsperger
Peninsula Bible Fellowship
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6/27/99
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Financial Freedom Pt. 2
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6/27/99 Financial Freedom Pt. 2
This is the second of our two-week series
on principles for financial freedom.
We began last week by looking
at the first of two principles
that I consider to be the starting points for
finding
true financial freedom as a Christian,
choosing to enter into a stewardship
relationship with our money
by establishing and maintaining
a financial partnership
between ourselves and God.
Now, this morning I want to share with you
one additional Biblical principle of financial
freedom.
But before I do
I need to offer you a little background that will
help us
better appreciate why this principle
is in some ways uniquely critical
to our point in human history.
We have undergone a dramatic change
in our culture during the past 30 years,
a change that has profoundly altered
our cultural understanding of
and relationship to debt.
Lack of as much money
as we would like to have
has always been a characteristic
of most people
in most cultures
for most of human history.
But up until about 30 or 40 years ago
most people would end their month
with all their money gone
and a debt load limited to
their house mortgage
and possibly their car.
And if we were to back up 40 years earlier than that,
there would, of course, not have been a car debt,
and most families would not have had a
mortgage, either.
But then during the mid 60's
through the introduction of VISA and
MasterCard
and a strong push on the part
of many other organizations,
and businesses,
and financial institutions
to encourage the use of time payments
and credit cards,
for the first time in history
wide-spread,
easily accessible,
long-term credit
became available to virtually all of the
wage earners in our country.
This accessible credit base has broadened
throughout the past 30 years
until now you don't even need
a visible source of income to get a card.
My daughter graduated from High School last year.
Beginning several months prior to her
graduation
she began to receive pre-approved VISA
and MasterCard applications.
A number of them promised her "financial
freedom!" with credit lines of from 3 to 5 thousand
dollars.
During the past year and a half
I think she must have received
at least 20 such applications.
If she wanted to
at nineteen years old
she could have more than $50,000.00
in VISA and MasterCard credit
available.
Along with this credit-oriented revolution
has come a strong push to educate the buying
public
in a whole new way of approaching
purchases.
Whereas in the past
people would be chiefly concerned
with the exact price of an item,
and whether or not they had the money
to pay for it,
now we are trained to think in terms of
"how much the monthly payments will be"
or what the minimum payment on our
balance is.
Appliances no longer cost $459.95.
They now cost just $35.00 a month.
I can remember the initial advertising blitz
for MasterCard during the late 60's in Seattle.
All over the city there were billboards
showing a hand holding something,
but during the first phase of the campaign
the hand was holding just an empty white
rectangle.
The caption on the ad said something like:
WATCH THIS SPACE...IT WILL CHANGE
YOUR LIFE
After a few weeks
the blank spot was then filled in
with a MasterCard.
And the advertising could not have been more true.
Many of you here today
are just enough younger than I am
so that you have never known
anything other than a debt-funded
approach to economics.
And before I go any farther
let me assure you that Scripture
does not tell us that borrowing
or the use of credit
or credit cards is a sin.
Borrowing money
and buying on credit
is not a sin and it is not forbidden in
Scripture.
But at the same time,
once we as a nation bought into this
debt-funded approach to personal finances
we lost sight of several major truths
and it has had a profound affect
on the Christians who have been
a part of this society.
First of all, we have lost sight of the truth about the
real nature of the
borrower/lender relationship.
Our financial institutions
and stores and businesses try hard to
convince us that the use of credit is just
a helpful convenience between two friends.
"We'd love to help you out with this purchase -
just fill out these few simple forms."
Solomon had a far more accurate perspective on the
arrangement
when he tells us in Prov. 22:7
The rich rules over the poor, And the
borrower becomes the lender's slave.
Scripture does not tell us that borrowing is wrong,
it simply tells us that when we borrow
we are volunteering for slavery.
Slavery is not a sin.
It is just not the most desirable state
in which to live.
There are times when a brief period of slavery
may be necessary to allow us to pursue other
long-term goals.
But the whole message of Scripture
is that volunteering for slavery
is something we should only do
with full knowledge of what we are
doing
and then only when we are convinced
it is a necessary short-term
necessity
that must exist
in order to move us toward our long
term goals.
ex. I'm sure most of you have seen that bumper
sticker that proclaims: I owe I owe so off to
work I go!
That is the most accurate one line description of our
nation's economy I've ever seen.
Debt is not a sin,
it is rather our choosing to place ourself
into a slave / master relationship
with the one we borrow from,
with a moral obligation to repay
all that we owe with interest.
You know how they now have those warning
messages
printed on all cigarette packages.
I think there should be one printed on all credit
cards.
It would read:
WARNING: USE OF THIS CARD PLACES THE
USER UNDER A SLAVE/MASTER
RELATIONSHIP WITH THE LENDER AND
MORALLY OBLIGATES THE USER TO FULL
REPAYMENT OF ALL BORROWED FUNDS
WITH INTEREST.
2. And the second,
and by far the greatest loss
that has resulted from our national debt
orientation
is the loss of a debt-free mentality.
And this brings us to the second
of the two principles for financial freedom I
would like to share with you.
#2. Choose to approach your financial
stewardship from a debt-free mentality.
Most people in our society today
never seriously think in terms of being debt-free.
Of course, we would all like to be debt free,
but we have been conditioned into believing
that living with debt
is just a given in life.
If we are going to drive cars
if we are going to live in houses,
if we are going to get furniture
and school clothes for the kids
and go on vacations
and make it through Christmas
there is no other way
except to incur a measure of debt.
3% of our the people in our nation
own their own homes without a mortgage.
When we come to Scripture,
we see a very different mentality
and a very different approach to life being
offered.
1. All the way through Scripture
freedom from debt
and freedom from slavery
are held up as both evidences of God's
blessing
and goals to be sought
by God's people.
In the 28th chapt. of Deut.
Moses is talking to the people of Israel about
the blessings that will come to them
if they are obedient to the Lord,
and about the curses that will come upon them
if they are not.
He is spelling out the terms of the law covenant,
the life-with-God arrangement
based on obedience to the OT law.
Now that law system itself, of course,
was doomed to failure
because it was rooted
in man's efforts to perform for God
rather than God's ability to perform in and through
man.
But it is interesting to note the things
that God promised
both for obedience
and for disobedience.
For obedience one of the things He promised was
this:
"The Lord will open for you His good
storehouse, the heavens, to give rain to
your land in its season and to bless all the
work of your hand; and you shall lend to
many nations, but you shall not borrow."
Then in verses 43-44 of Deuteronomy chapter 28
when he is telling them of the curses that will
come upon them for disobedience,
he says:
The alien who is among you shall rise
above you higher and higher, but you shall
go down lower and lower. [44] "He shall
lend to you, but you shall not lend to him;
he shall be the head, and you shall be the
tail.
Consistently, Scripture confirms what we all know
already
that indebtedness is not the way God
really intends for His people to spend most
of their lives.
OK so what?
So in a practical sense, where does that leave us?
As Christians, how are we suppose to relate
to this whole concept of debt?
#1. Our freedom in this area begins with our
commitment to an attitude of learning to become
debt-free.
Without that goal
deeply planted within us
it will never happen.
There is no magic way
of making that goal a
living reality in our lives.
It happens only when we choose to
accept it as a goal for our lives.
But in our culture,
I personally believe that
one of the biggest barriers
to God's people living debt-free is
ignorance.
We have been bombarded
with an endless barrage of education
and advertisement
conditioning us to accept
the absolute reasonableness
of living and buying on
credit,
with almost no one talking about
the possibility of working toward becoming
debt-free.
For some of you,
this is the first time you have ever heard the
concept
discussed in a Christian setting
or perhaps in any setting.
So, step #1 is recognizing and accepting the goal of
becoming debt-free,
making it a long-term anchor
in all of our financial thinking.
Then, step #2 is establishing a plan
by which that goal
can become a reality in our lives.
I'll explain that plan in our closing few minutes,
but let me say first that
the greatest hurtle is not the plan,
it is choosing to think differently
about the way we relate to money
and the things we buy.
Most families who become sereious about
pursuing the goal of becoming debt-free
can be totally debt-free with the exception
of their house in 3 years, and totally debet
free including the house in about ten
years.
Now the plan has just two steps to it -
Step #1 is to create a surplus of money each month.
And right here is where I run the risk of loosing
you.
You say to yourself,
"Right Larry! I have been trying to create a surplus
for years.
Not only can I not create a surplus,
I can't even make it to the end of the
month!"
The truth is,
baring those unusual, temporary, transitional
times in our lives
when we may be unemployed,
the surplus really is there.
We just can't see it
because we have been so conditioned
into thinking in terms
of always being in debt
that we cannot see it.
Once a person begins to think in terms
of becoming debt free
it is amazing what we see
and where we discover money
to move us toward that goal.
With most of us
a lot of that surplus
is in our non-essential impulse buying.
I can show you where some of you
can find $70.00 a month instantly.
If you buy one large mocha or latte a day
five days a week
its costing you $70.00 a month.
And when I say that
there is a terrified little voice inside you
that says, "OH NO! He's going to take all
my happy things away! I'm going to have to live on
bread and hamburger and water for the rest of my
life!"
And in response
the only thing I would say
is that the principle I offer you today
is one that will only appeal
to those who hate slavery.
If you are still at the point
where you don't really mind
having all of your financial masters
telling you what you must do with your
money
and what date it has to be done by
the instant you get your paycheck
then you are not yet hungry for freedom.
God does not demand financial freedom
from His people,
He simply offers it to those
who have grown weary of slavery.
Now for most of us
creating a monthly surplus
cannot be done
without a written budget
that limits our monthly spending
in each of the categories within
the budget.
If you're like we were as a family,
you'll need some help in the process of
establishing that budget.
One excellent resource for that help
is a ministry called Christian Financial
Concepts.
You can reach them at 1(800)722-1976.
Tell them you want to establish a family budget
and need some materials to help.
#2. Then, once you have established a monthly
surplus
the next step is to start putting that surplus on the
highest interest debts you have
which are usually the VISA and
MasterCard.
Then when those are paid off
the surplus is shifted to the car loan,
and when the car is paid off
the surplus is shifted to the house.
And here again our conditioned thinking
will blind us to the truth.
We think to ourselves - "RIGHT!
As if an extra hundred dollars on my house loan
will make any difference!
I owe $120,000.00!"
Well, let me present it differently
and see if it helps.
If someone were to come up to you
and tell you that if you would invest $89.00
with him
he would instantly give you $749.00 in
return
would you do it?
I want to show you something
that I think may help some of you
think differently about a debt-funded
existence.
This overhead is the first page
of an amortization schedule
on a $120,000.00 loan for 30 years
at 7.5% interest.
That's a pretty good interest rate,
and its kind of an average amount
for a new home loan.
You probably know this,
but an amortization schedule
simply lists each payment,
and tells how much of it goes to reduce
the loan balance,
and how much goes to interest.
In this schedule there are a total of 360 payments,
one a month for 30 years.
The monthly payment is $839.06.
For the first payment,
of that $839.06
$89.06 goes to pay off the loan,
and $750.00 goes to interest.
But now look at the second payment.
The total payment amount is the same: $839.06.
Because your $89.06 payment the previous month
has reduced your loan balance a little,
$.56 more of the second payment goes to
principle reduction.
But, if when you made that first payment
you were to write a second check for $89.62 and
mark it to go toward principle reduction,
it would instantly save you $749.44 in
interest
and in effect eliminate that second
payment from the schedule.
If you were to do this every month for the first year
you would have paid an additional $1152.75,
but you would save yourself $8,915.97 in
interest = 793% return on your money,
and you would have shortened the length of
your loan by one full year.
If you were to make an additional $300.00 payment
on your house each month
with this particular loan,
you would own your house
in just over 14 years
and save yourself $105,672.00 in interest.
"So where am I going to get an extra $300.00 a
month?"
How much are you paying right now on your
credit cards, car payment, and time payments?
"But that means I'd have to keep driving this same
car for years,
and maybe not ever buy a new car again."
The key, of course,
is that our hunger for financial freedom,
and our commitment to that goal
must be stronger than our addiction
to debt-funded impulse buying.
This is obviously just a hypothetical example.
The details in each of our lives are different.
But the crucial thing is the attitude
we bring to our stewardship.
And I will say, too, that God has an amazing way
of honoring our heart intentions
when those intentions are in line with His truth.
The last time I taught this principle was in 1991.
At that time both Sandee and I
were working part-time jobs
in addition to my work with the church.
We had worked out a payment schedule on our
house loan
that would have the house paid off
by the time Joni started college,
when we would then shift the house payment
toward college tuition.
Our required house payment was about $900.00
and we then added an additional $300.00
each month to that.
Each month I wrote a $300.00 check to the bank
that we weren't required to,
a check for which at the time
we received nothing in return.
We kept that up until about two years ago
when unexpectedly
Sandee and I both lost
our part-time jobs
and within 30 days our income dropped
almost $1000.00 a month.
But because we had been making
all those principle reduction payments
we were able to refinance the balance owed
on our house
and drop our payments from $1200.00
to $500.00.
If we had not been making those additional
payments
our family would have been thrown into
tremendous financial stress,
and possibly even been forced to move out
of the house.
Of course in the process we also had to give up our
plan of paying off the house
by the time Joni started college.
But then this spring my parents sold their home
and in the process chose to make a substantial
contribution toward Joni's college costs.
We had one plan.
God had another.
God wants His children to know
true financial freedom.
There are lots of reasons not to follow
the principles offered to us by our Lord.
"Y2K is going to destroy everything anyway."
"I'll never be able to get this sale price again."
"Maybe God doesn't think I need a new boat."
But for those of you who might be interested
I just want to say that God offers us
the high privilege
of true financial partnership with Him,
and He delights in showing Himself
strong on behalf of those who are willing to trust His
leadership.