ARTICLES ON FINANCE

DATE:  16 March 2003

SPEAKER: Pastor Tayo Adeyemi

TITLE:  Breaking the shackles of debt

TEXT: Proverbs 10:15

Last time, we learnt that poverty is a cycle that tends to perpetuate itself unless it is broken. We also learnt that wealth is a cycle.
So your aim is to break out of the cycle of poverty; and into the cycle of wealth. We learnt that in order to break out of the cycle of poverty, there are three things you need to do

1. Reduce your outgoings
2. Make what you have work for you.
3. Increase your income

Of these three, reducing your outgoings is probably the toughest, but definitely the most important. We identified four major places where your money goes:

1. Necessities
2. Desirables
3. Luxuries
4. Wastage

By cutting out wastage, luxuries and a good portion of your desirables, you can reduce your expenditure by up to 30%. Other steps to break out of the poverty cycle include using a budget, starting a savings programme and setting off the things you don't really need. We learnt that increasing your income will not really change your financial situation unless there is a corresponding change in attitude.
Ways to increase your income include getting a second job, doing overtime at work, finding a better job, asking for a raise at work and using your creativity to make money. The golden rule here is to protect your relationship with God and with your family. Finally, we learnt that you cannot really break the cycle of poverty until you become a giver.
Today we want to look at one of the most prolific causes of poverty; one of the greatest enemies of good financial management - DEBT Proverbs 22:7. Debt is one of the most prolific causes of financial bondage.
Deuteronomy 15:6; 28:12 Debt is a spirit with an assignment from the pits of hell to ensure and enslave. Unfortunately, it has come to be accepted as a way of life today. As a matter of fact, in some circles your social status is equated with how much money you owe or are able to owe. It is called your "credit rating". An entire industry has emerged out of selling debt to people.
Most companies now realise that they can make more money by selling credit facilities than they do by selling the products they manufacture. This is especially true of the car manufacturing companies. As it is with the individual, so it is with organisations and indeed nations. A company that owes no money is not considered a good company to buy. Only about four nations in the whole world produce more than they consume in one financial year - Japan, Germany and two others.
The Canadian national debt is to the tune of 3 million Canadian dollars per citizen. If every nation were required to pay back what they owed immediately, there would simply be a global economic meltdown. Now how does all this boil down to affecting you?
If you do not understand debt for what it truly is, you will sooner or later be caught in its trap if you aren't already. You owe it to yourself to develop minimal tolerance to the credit culture of our world today. Does this mean you must never borrow money? No. But you need to be sensible about it. What is debt? Two things:

1. Debt is taking from your future to satisfy a need today.
   You need to begin to see debt as a way of stealing from yourself. When you borrow money, your lender is not the one in deficit. In reality you do not owe them. You are the one in deficit - you are owing yourself.
   
   You are simply taking from the resources that will be available to you in the future and using them to meet a need in the present. Settle it in your mind - when you borrow, your lender is never, never at a loss. To start with, they only loan you the money that they have - many times surplus money. And it costs them less for you to have it than for them to keep it.
   
   If you kept the money for say, three years, and then paid it back, it would have still been to their advantage. Furthermore, even though the money is in your hand, the lender still has control over his money - in one form or another. For lending you the money, he has access to something you have. It is called security. Thirdly, for the "inconvenience" of lending you his money, he charges you something called interest. Interest is the price of capital. And notice that he collects his interest up front - with your first few payments. Finally, it is in the lender's interest that you keep the money for as long as possible, because the longer you keep the money, the more he can charge you for it.
   
   
2. Debt is giving a complete stranger unrestrained access to your finances and other resources.
   Have you noticed that nobody is interested in giving you a loan when you have no money and no means of earning money? When lender's offer you a loan, it's because they see you as another source to drain money form.

Now what must you do to break the shackles of debt? You need to tackle the problem on two levels:

A. Spiritually
B. Practically

A. Spiritually

Remember that most natural problems have a sprirtual root. Ultimately, poverty is a curse and it can be traced all the way back to the fall of man in Genesis. Also, your best effort without God's help is futile - Psalm 127:1,2 There are four key things you need to do: 2 Corinthians 7:14

1. Repent:
   There are various reasons why people get into debt: ignorance, carelessness, greed, irresponsibility or circumstances beyond their control. Whatever your reason is, it is because you tried to do it your way; and you need to repent for that Isaiah 55:1-3, 6-9. Repent for turning to the world rather than to God.
   
2. Forgive Others:
   Sin is the highest debt we owe; and until we release others from their debts our debts will not be cancelled. Matthew 6:9-15 - "and forgive us our debts, as we forgive our debtors" - verse 12. When you walk in unforgiveness, you enslave yourself Matthew 18:21-35
   
   
3. Be Faithful with your Tithes and Offerings:
   When you fail to tithe, you are stealing from God and consequently (Malachi 3:8-12)

• You bring a curse upon yourself
• You close the windows of heaven over your life
• You deny yourself the blessings of God
• You invite the devourer into your life.

If you don't pay God what belongs to Him, as a rule, you will not be able to pay men what belongs to them. Haggai 1:2-11 Draw on the Power of God
God's word is very clear - He is a miracle working God, He is a burden removing, yoke destroying God; and He is a debt cancelling God. so learn to turn to God on three levels.
Prophesy: Mark 11:23
You can speak to the mountain of your debt and command it to be removed. Ezekiel 37:1-14; Zechariah 4:7
Prayer: Mark 11:24; Luke 2:52
Ask God for wisdom to handle your finances Ask him to increase your financial stature. Ask him to give you favour with your creditors.
Prophetic Intervention: 2 Kings 4:1-7; 2 Chron 20:
Every miracle of debt cancellation in the bible is connected to a prophetic intervention. Seek counsel and prayer Sow a seed.

B. Practically Shut down all credit lines

If you're already in a hole, stop digging. There are two approaches to this step:

1. Plastic Surgery - take a pair of scissors and cut your credit cards in two.
2. Freeze Therapy - freeze your credit cards in a bowl of water in the freezer. When you decide to melt the ice, the urge to spend would have left you before you reach the card.
   
   

Calculate your total debt

Draw up a list of all your creditors, how much you owe them and how long it will take to pay each debt off. Your table will look something like this:

Creditor	Balance	Minimum Payment	Interest	Time (Months)

This list, will among other things bring two things to your consciousness

1. The amount of money you owe.
2. The amount of time you need to pay it all off.
   

It helps you to see all your debts as one huge bill. This way, when you pay off one debt you are not under the illusion that you now have more money available - you simply apply the extra money to another debt.

Draw up a plan of action

Your plan must take into consideration all your creditors, but focus mainly on three of your debts

1. The costliest debts - cost
2. The largest debts - size
3. The shortest debts - time

Also take into consideration what your creditors want versus what you have. If these do not match then prepare to do some negotiating at the next step. Consider moving all your card debts to one card.

Keep Communication lines open

Creditors get nervous when their debtors go silent - because it is usually the first sign of an intention to default. Whatever you do, keep talking. Most creditors will be willing to work with you as long as you have a reasonable proposal. It costs them money to recover their money from you so they will prefer to re-negotiate your debt in terms of Monthly payments, Interest rate, Balance
Avoid the temptation of "Robbing Peter to pay Paul". Let all your creditors know about each other.

Put your plan into action and stick with the programme

Make it your priority to pay off your debts. As extra money becomes available, channel it into paying your debts 2 kings 4:7
The more money you can pay, the quicker you will become debt free. If you are able to pay twice the required amount, you will be debt free in half the required time. As a matter of fact, if you focus on the costliest, the largest and the shortest first, it will cost you less time and less money.

Plan for life after debt

Settle it in your mind - if you can come out of debt, you can stay out of debt. This does not mean you will never use credit again - it simply means you will use it wisely. When your debt is paid off, don't see the money as available money. Split it into three parts.

1. Put one part into savings
2. Invest the second part
3. Reward yourself with the third part

Some simple rules for using credit in the future.

• Don't spend the money you don't have.
• Never buy groceries (food and other consumables) on credit.
• If you buy anything with a life of 5 years or less, aim to buy it off within 6 months.
• If it will last more than 5 years, aim to pay it within 18 to 36 months.
• Remember, each time you borrow, you are eating into future resources.
• Also remember, the interest you pay on debt is money you could apply to other areas of your life.

WITH GOD ALL THINGS ARE POSSIBLE. IT IS POSSIBLE TO BE DEBT FREE!!
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