Debt Freedom Session 1 – Change Your Mindset
Debt is stealing our freedom The rich rules over the poor, and the borrower becomes the lender’s slave Proverbs 22:7 Average American family has $9,000 in credit card debt
It’s our responsibility to be free! You were bought with a price; do not become slaves of men 1 Corinthians 7:23
What would debt freedom mean to us? • Individuals? • Families? • Congregation? • Community?
Our Only Real Debt Should Be to Each Other Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law. Romans 13:8
How will we become debt free? • Debt defined • Debt and our lifestyle • Debt and spending • Debt and financial independence • Confess and declare • Debt use • Debt and your credit rating • Expenses and debt • The fuel for debt freedom • Debt freedom strategies • Credit card • Installment • Car loan • Mortgage • Student loan • New habit patterns • Debt freedom principles • Family finance goals & strategies • Impact & transform
Change Our Mindset Get rid of the doubt and all poverty thinking If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you. But when you ask, you must believe and not doubt, because the one who doubts is like a wave of the sea, blown and tossed by the wind. That person should not expect to receive anything from the Lord. Such a person is double-minded and unstable in all they do. James 1:5-8
Types of Debt • Consumer purchases • Impulse spending • Make ends meet • Auto loan • Timeshare • Furniture • College • Grad school • Vocational • Family home • Rentalproperty • Vacation home • Finance a business • Make ends meet Is it all bad? Is it all necessary?
Debt’s Impact 1 credit card with a 19.8% rate and a $500 initial balance 2 additional charges per year of $75 each Made the minimum payment each month Interest charges over time: $580 5 years $1,200 10 years $1,840 15 years $2,480 20 years $3,130 25 years
Debt’s Impact Purchased $28,000 car Financed $25,000 at 10% for 5 years Made $531 payment each month Interest charges over time: $2,317 Year 1 $4,210 Year 2 $5,633 Year 3 $6,538 Year 4 $6,870 Year 5
“Debt is the result of overspending and undersaving.” - Dave Ramsey
Spending Habits Essential • Savings • Tithes • Food • Clothing • Healthcare • Insurance • Shelter • Transportation • Utilities Discretionary • Meals out • Entertainment • Travel • Grooming • Clothing (extra) • Household décor “On the bubble” • Education • Fitness • Experiences Are we using debt to fund any of these?
Income is your most important wealth creator Income Expense Expense Income Debt Easy Street Dead End Debt is the great income-killer!
If we would just obey However, there need be no poor people among you, for in the land the LORD your God is giving you to possess as your inheritance, he will richly bless you, if only you fully obey the LORD your God and are careful to follow all these commands I am giving you today. For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you. Deuteronomy 15:4-6
Change Your Mindset Summary • Debt steals our freedom • It is our responsibility to be free Next Session • Visualize and Confess • How are we using debt now • Realistic alternatives to debt • Debt and your credit rating • Expenses and debt