Act Your Own Wage! Series

Managing Well Series – Part 2 – November 2, 2008

Act your own wage!

We live in a culture of instant gratification. Buy it now and pay later. Now this causes enormous complications both personally, as couples, and for our households.

The Bank of Canada reports that ‘for every dollar of disposable income, Canadian households owe nearly $1.25 in debt, a record high, and nearly double the 67 cents per dollar of income they owed in the mid-1980s.

The Bank of Canada concludes that Canadian debts continue to rise much faster than our incomes.

"Household debt continues to rise at a robust pace - about 10 per cent year per year ...," it says. "The increase in debt has contributed to a further rise in the debt-to-income ratio."

I have entitled this message, part two in our Managing Well Series, ‘Act Your Own Wage.’ Last week we clearly saw that God owns everything – and he commands Christians to use worldly wealth now for his kingdom purposes. In fact Jesus called the Jewish farmer a fool for coveting all his goods for this lifetime and not being rich towards God’s work.

Today I am going to give you a simple message on how to become debt free. There are several points to this message but they are all necessary for D-Day, debt free day.

So were here to talk about the debt trap. Now you may be thinking why is debt a trap? It is a trap because it enslaves you. King Solomon, in the 10th century BC wrote ‘Just as the rich rule the poor, so the borrower is a servant, literally a slave to the lender.”

The dictionary defines debt as ‘money owed to credit card companies, bank loans, money borrowed from relatives, a home mortgage, and automobile or leisure loans. Bills that come due such as the monthly utilities, house taxes, gas and oil bills, are not considered debt if they are paid on time.

Any time you take a loan you are obligated to pay it all back to the lender.

Now here is the type of thing I get in the mail. Dear Mr. Hamel. Congratulations, you are one of the preferred people who are approved for a new MC Credit card with $20 thousand privileges.

Credit is convenient and offers benefits cash doesn’t.

• $0 fraud liability.

• You can’t replace cash, but it’s easy to replace your Capital One MasterCard

It’s smarter because credit gives you added benefits and features that other methods of payment can’t match.

• Credit cards are great for renting cars, reserving hotel rooms, making internet purchases and having emergency cash.

• You get a 25-day interest-free grace period when you pay your balance in full each month—giving you the extra time you need to pay back purchases.

• Plus, detailed monthly statements help you keep track of exactly how much you are spending and where.

Here is what they do not tell you:

o Those who make all their purchases on credit cards spend up to 33% more each month

o If you cannot pay it off each month you will pay 19% interest each month until the whole original balance is paid off

o You will become our slave once you sign for this. If you cannot pay we will come after you with legal recourse and we have lawyers you will never be able to afford

And whenever you see those credit applications there are two words you will not find anywhere, slave and debt. Nobody likes those words. Make no mistake about it – they are selling you debt. We want you to be in debt to us.

Here are 5 danger signs of the debt trap. These are warnings that were going to get ourselves in trouble.

i. Were living on credit to maintain our standard of living (Prov. 22:26-27). We can fight that by using cash and debit cards as much as possible – don’t put off paying to the future by using your credit card. An example would be a new living room set at Gould’s and making monthly payments. How do you know if you’re living on credit? It is really simple – the balance is going up and you’re not able to clear the whole amount every month. I heard about a man whose wife’s credit cards were stolen but he did not call to cancel them. The reason, he said, "the thieves were spending less than she was." Indeed debt has become a big problem for many of us.

Of course the flip side is you guys spending $10-15 thousand on an ATV or boat and yelling at your wife for spending $100 at the Norwex party

Living on credit shows two basic problems:

a. Were spending more than what we have. “Any government, like any family, can for a year spends a little more than it earns. But you and I know that a continuance of that habit means the poorhouse (Franklin D. Roosevelt, 1932). You have kids and they have needs for clothing. But they do not need designer clothing. There is nothing wrong with a good used winter coat or a second hand bike.