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Saving
Two Cultural Myths:
“If you have it, SPEND it; and if you don’t have it, spend it anyway.”
Two Cultural Myths:
“If you have it, SPEND it; and if you don’t have it, spend it anyway.”
“It is futile to save.”
The Wise Saver
One who builds, preserves, and invests with discernment.
The Mind and Heart of God on Saving
It is wise to save.
The Mind and Heart of God on Saving
It is wise to save. It is sinful to hoard.
Saving versus Hoarding
Saving is putting money aside for APPROPRIATE goals.
Saving versus Hoarding
Saving is putting money aside for APPROPRIATE goals.
Hoarding is continuing to put money aside after our goals are reached.
How Can We Avoid Hoarding?
Understand our TENDENCIES
How Can We Avoid Hoarding?
Understand our TENDENCIESAnswer the question: “When is enough,
enough?”
Your Money Tendency
Group Activity:
Savings Is:Money you KEEPNot money we have lost or given upFuture spending
Compound Interest Is:
Interest earning interest, earning interest
Compound Interest Example
$100 @ 10% = $10 interest$110 @ 10% = $11 interest
The extra $1 is compound interest.
THE POWER OF COMPOUND INTEREST ($100/month at 10% interest)
0
20000
40000
60000
80000
100000
5 10 15 20
YEARS
DO
LL
AR
S
Interest
Principal
20 Year Period
THE POWER OF COMPOUND INTEREST($100/month at 10% interest)
0
100000
200000
300000
400000
500000
600000
700000
5 10 15 20 25 30 35 40
YEARS
DO
LL
AR
S
Interest
Principal
40 Year Period
Three Kinds of SavingsEMERGENCY savings
Three Kinds of SavingsEMERGENCY savingsReplacement savings
Three Kinds of SavingsEMERGENCY savingsReplacement savingsLONG-TERM savings
Spending Plan Application
Individual Activity:
Key Question:
If giving is so right and saving is so wise, why are they so hard to do?
Cultural Order
LifestyleDebtSavingGiving
God-Honoring Order
Giving
Saving
Lifestyle
Transitional Order
Give. . . somethingSave. . . a littleDebt. . . maximize repaymentLifestyle. . . Spartan
Debt
“Debt is expected and UNAVOIDABLE.”
Cultural Myth:
The Cautious Debtor Is:
One who avoids entering into debt, is careful and strategic when incurring debt, and always repays debt.
Biblical Guidelines:
Repay debt
AVOID debt
Proverbs 22:7
“The borrower is servant to the lender”
Three Spiritual Dangers of Debt:
Presumes on the future Denies God the opportunity to TEACH USFosters ENVY and greed
Five Kinds of Debt:
AutoHomeEducationBusinessCREDIT CARD
There is no wise use of a credit card.
Credit Card Studies:Family spending using a credit card
versus cash Amount spent (with a credit card) rose
between 20% and 30%.
Credit Card Studies:Family spending using a credit card
versus cash Amount spent (with a credit card) rose
between 20% and 30%.
Pocket camera purchase using cash versus a credit card Cash group paid an average of $29.58 Credit card group paid an average of $52.67
Two Reasons Credit Card Users Spend More
Using a credit card is psychologically different than using cash.
No RECORD of how much we’ve charged until the end of the month
Credit Card Rules:
Use only for BUDGETED itemsPay the balance in full every monthIf you violate rule one or rule two, cut
up your cards
Credit Card Tips:
Have only one cardConsider the use of a DEBIT cardConsider deducting the amount from
your checkbook balance
Debt Example
You owe $7,200 @ 18.1%(Minimum payment = 2% of the balance or $10/month whichever is greater.)
Debt Example
You owe $7,200 @ 18.1%(Minimum payment = 2% of the balance or $10/month whichever is greater.)
You Pay Total Paid Time
$Minimum/month $23,049 30+ years$150/month $13,387 8 years$150 + $100/month $ 9,570 3 years
Is God big enough and are you committed enough to find a little over $3 a day somewhere in your expenditures?
Key Question:
Principles for Accelerating Debt Repayment:
Pay off your SMALLEST debt first.As a debt is repaid, roll the amount you
were paying to the next largest debt.Incur no new debt!
Spending Plan Application
Individual Activity: