As you study the material, each student is urged to develop his/her personal economic empowerment goals and plans as well as be open to developing an accountability partnership with a fellow student. There will be a quiz at the end to insure students have grasped some of the basic concepts being discussed. I pray that you are blessed by this material on Christian personal financial management.
Summary Highlights -
1. See Proverbs 22:7. The Consumer Reports Money Book says the average household debt is more than $38,000. There are over 1 billion pieces of plastic with a major card in 74% of all households. The average cardholder has a monthly debt carry over of $8,367 at 18.3% interest.
Even when we pay off our cards each month, we tend to buy more (i.e., about 100%). Learn to use debit cards, instead of credit cards. Be very careful with home equity loans and avoid adjustable rate mortgages. Buy your car with cash or less than a three year term, instead of leasing. Avoid friendly loans and co-signing.
2. Get rid of debt with the “snow ball” method - pay the minimum on all listed debt. Use extra money to pay off the lowest balance then use all extra money for the next smallest amount and so on until all debts have been paid off.
3. Check your credit report at least bi-annually. Seventy percent of credit reports contain an error. Learn to review and correct your own reports, instead of paying people to do it for you. Per the 1977 Federal Fair Credit Reporting Act, all good and bad information is to be removed from your report after seven years, except for a chapter seven bankruptcy, which stays for ten years.
There is no way to speed up the clock for accurate information. Inform the credit bureaus of the errors. They have 30 days to remove the inaccuracy (see p. 98). The Federal Trade Commission is the appeal agency along with state consumer affairs departments. The three credit bureaus are TRW, Trans Union, and Equifax.
Understand that collectors strive to evoke strong emotions. You can stop late or early calls along with calls on your job (see p. 101-102). Creditors cannot garnish your checks.
4. In spite of being one of the richest nations in the world, we average about $1,000 in the bank per household. Americans save about 2.2% of after tax dollars compared to Japanese who save 27.9%. Aim to save at least 10%, after giving God His 10% (i.e., first fruits), and then pay the rest. Use pre-authorized checking devices to save for an emergency fund, big purchases, and for wealth building.
5. Aim to have an emergency fund of at least 3-6 months of expenses. Build this fund before building wealth. Invest as soon as possible, no matter how small an amount, to take advantage of compounding interest. Avoid credit to avoid paying compounding interest. Talk with an advisor about a diversified investment portfolio.
Christian Personal Financial Management Discussion Questions (use extra paper as needed):
1. Do you agree that using debit cards, instead of credit cards is better for most people? Why? Discuss your understanding of Proverbs 22:7.
2. How do you avoid friendly loans and co-signing?
3. Get rid of _____________ with the “snow ball” method. Pay the _____________________ on all listed debt. Use ____________________money to pay off the _______________________ balance then use __________ __________________ money for the _______________ smallest amount and so on, until all ____________ have been _______________ __________________.
4. Check your credit report at least _____________________. _______% of credit reports contain an error. Learn to review and ___________________ your own reports. All good and bad information is to be removed from your report after _________ years, except for a chapter seven bankruptcy, which stays for ____________ years.
5. It is suggest that we aim to save at least _________% of our income, after giving God His 10% first, and then pay the ___________. Aim to have an emergency fund of at least _______ to _________ months of expenses.
6. What else would you like to share (e.g., goals, accountability partnership, etc.)?
Conclusion: Let’s work on being better stewards of our finances and helping others do the same. God has much for those who obey His will regarding Christian personal financial management.Please click here to let us know, if this has been quality and helpful information for you (i.e., make sure you let us know the name of the article). Feel free to share your questions and comments about the article as well.