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Finance Lesson #07

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Bible Perspectives
FINANCIAL TRUTHS FROM THE BIBLE
Lesson #07
THE VIOLATION OF GOD’S SYSTEM — DEBT

  • Memory verse: Pro 22:7
  • Debt and the two financial systems
    • The world’s economic system operates on the concept of debt.
      • The financial world consists of enormous debt by the governments of the world’s nations, enormous debt of companies in the business world, and personal debt by the by the majority of people in the modern world. All the world is drowning in debt.
        • The word, debt, means = an obligation that a person has to pay to another person.
      • The two types of debt in the world’s system:
        • Credit card debt:
          • The concept of debt operates with the principle of the mathematics of compound interest.
            • For example, when a person has credit card debt, and pays only the minimum amount each month, the interest is compounded.
              • A debt of $5560 of credit card debt with an interest of 18% pays to the lender each year $1000 and in 40 years the interest that you would have paid is $40,000.
            • Instead if you had invested $1000 at 12%, you would have gained $6353 in interest for the year and $767,091 in 40 years.
            • The quantity that the lender gained from your payment of $1000 with an interest of 18% is $7154 in one year and $4,163.213 in 40 years.
            • With each example, the believer should ask himself, “Are the long term benefits of freedom from debt better than the short term benefits of buying this product?
        • The debt to buy a house (the mortgage):
          • A mortgage of 30 years with the interest of 10% will cost three times more than the original quantity that the person borrowed.
    • God’s economic system operates to the reverse of the world’s system.
      • Read Deu 28:1-2, 12, 15, 43-45
      • God wants the Christian to be on the positive side of interest instead of on the negative side.
        • Debt locates the Christian on the negative side of interest.
        • Lending puts the Christian on the positive side of interest.
      • What are the problems with the Christian’s personal debt?
        • Read 2Rey 4:1-7
        • Read Deu 15:4-6
        • Read Rom 13:8
        • Read 1Cor 7:23
      • From these scriptures, Why does God not like debt for a Christian?
        • How do the following words and phrases describe with certainty debt?
          • Slavery.
          • A curse put on the person as the result of disobedience.
          • A presumption on the love of God.
            • Read Jam 4:13-15
          • A presumption that you have better wisdom than God.
          • A denial to see the hand of God that supplies for you.
          • A denial of seeing your faith grow.
      • When is it permissible for the Christian to have debt?
        • The Principles:
          • Debt is permissible only when the thing that you buy has the potential of increase or if it can produce income.
          • Debt is permissible if the value of the thing is equal or more than the value of the quantity that you borrow.
          • The payment must not put extreme pressure on the finances of the family.
            • Short-term debt must not exceed 10% of the monthly quantity of the income that you bring home. The purchase of a house is not included in this formula.
        • From these principles, a house, a business, or education is qualified.
          • However, the Christian must be conservative to have financial wisdom.
          • However, even with these principles, the Christian must pay this debt as rapidly as he can.
            • Always make a big down payment when you buy something with credit. (Remember that you want to be on the beneficial side of compound interest. You should never put more money in something than the value for which you can sell it now.)
    • How can the Christian avoid debt?
      • Use these principles for buying:
        • Buy what you need and do not buy what you want.
        • Buy things of quality that will last for a long time.
        • When it is possible, buy things that will increase in value.
        • Do an investigation in the library to compare products that cost a lot of money. (cars, appliances, etc.)
        • Avoid requesting loans for vacations.
      • Avoid the following danger signs:
        • To spend more than 20% of your take-home income on credit payments.
        • To have more debt (with the exception of the home mortgage) than you can pay in 12 months with your current income.
        • To have to buy small things like food and things from the pharmacy with a credit card.
        • To open new accounts before the old accounts have been paid.
        • Arguments over money in your home.
        • To remain one month behind in your payments.
        • To be incapable of saving money.
        • To request a loan of money on your credit card to pay other accounts.
        • To have accounts of which the totals grow every month.
        • To trust in the bank accounts that offer a benefit of an overdraft security.
      • Principles of planning:
        • Planning helps the believer to avoid debt.
        • Read Pro 21:20
          • This scripture indicates that the believer must plan ahead.
            • You should make short-term goals and long-term goals.
            • You should make a budget.
            • You should open a savings account.
              • You must maintain in this account a minimum of three months quantity of take-home income.

HOMEWORK
This is a self-study. Please do not send homework answers to the teacher forcorrection.

  • Make a list of all your expenses for the last 90 days and mark each one for which you used a credit card, or if you used cash.

 

  • Which things on your list represent essential things?

 

  • What changes do you need to make to avoid more debt? (Write a plan and be specific.)

 

  • Memory verse: Psalms 37:21
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About Joyce

Joyce
I came to faith in the Lord Jesus Christ in 1963 giving my heart to Jesus in a Billy Graham crusade in Los Angeles, CA. I have been teaching the Word of God since 1964, Usually two to three adult classes a week.

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