Hello, I'm Shelley Quinn.
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Welcome again to
Issues and Answers.
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Hey, today is a program you're
not going to want to miss,
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especially if you find yourself
in debt, because we're going
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to be talking about how
to get out of debt for good.
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Let me share a
scripture with you.
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It comes from
Romans 13 and it's verse 8.
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This is Paul's advice.
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He says, Keep out of
debt and owe no man anything
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except to love one another.
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And here with us
today, returning again,
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is a very special
guest, G. Edward Reid.
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He is the Stewardship Director
for the North American Division
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of the
Seventh-day Adventist Church.
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Ed is a man who, well, not only
is he an attorney and financial
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planner, but he is a man who by
practical experience has lived
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through this, learned how to put
Bible principles into practice
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for money management
and how to get out of debt.
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He's written a wonderful book
called It's Your Money Isn't It?
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Ed thank you so much
for coming back again.
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Well thank you for having me.
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It's a pleasure to be here.
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The topic today is going to be a
real interesting one and I know
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will help lots of people.
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You know, when we were
out at So cal I was one of the
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speakers and you were
doing a breakout session.
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All of your sessions had a lot
of people in attendance because
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people need to know
what to do with money.
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That's true.
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The Bible says the love of
money is the root of all evil.
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It isn't money that's the
root of all evil unless you're
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in debt, is it?
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That's true.
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What is your definition of debt?
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Well, debt is
kind of interesting.
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People ask me, well, you know,
because I have to pay my phone
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bill each month, is that a debt?
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Actually, what I say of debt is
that it's living today on money
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that you expect to
earn in the future.
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Frequently people are involved
in living their life way beyond
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where they have the money.
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Something real,
real interesting happens.
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That is that we are
encouraged to get into debt
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by the government.
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I'll just tell you that how last
year more than seven billion
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offers came through the mail
in American from credit card
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companies encouraging people to
get new credit cards and so on.
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This is really,
really incredible.
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It's so easy to get into debt,
but what they don't tell you
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is if you're late on one
payment, or you can't make a
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payment, they're really going
to put you through the cleaners.
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They're going to turn you in.
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You know, all kinds
of things like that.
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Hard things happen to people.
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But it is highly advertised.
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It's probably the most highly
advertised commodity in America.
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That is debt.
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Amen.
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You know, I was thinking when
you said encouraged to get into
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debt, even student loans, which
we may have time to touch on,
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or credit cards, especially
for the younger people who don't
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have a clue about how
to manage their money.
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Do you think the reason why so
many people are in debt today is
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because we have
become a society that wants
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immediate gratification?
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Apparently so because years ago
we'd talk to people who said,
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Well, you know, my husband,
or my wife, when we got married
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we decided we weren't going
to do anything unless we had the
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money to do it.
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The amazing thing is very few
people are like that anymore.
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For example, I don't know what
the percentage is, but a very
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high percentage of people
finance their automobiles,
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or they lease a car, so they
have monthly payments on this
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all the time.
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Those are the kind of
things that we need to be really
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be concerned about.
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Ed you and I both are living
testimonies that it is possible
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to get out of debt.
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I believe people believe
that, but is it possible to stay
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out of debt in today's society?
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Well, the interesting thing
is that we're always encouraged
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to get into debt, but I
think the answer to that is yes.
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It just basically is
like our Christian commitment.
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We have to make a decision
that we want to live debt free.
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There are many things
in life based on decision.
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For example, I decided that
I wanted to live healthfully.
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Now I could gorge on food
and balloon way up, and so on,
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but you just have to
decide that when you have enough
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you stop eating, etc.
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Other people have different
problems, but I'm just going to
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use that as an illustration.
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Well, the same thing is, I'd
like to have more things than
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I have, but if I did I'd have
to get them on credit because
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they're not in my budget.
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Do you see the point?
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Lots of people spend beyond
their means, so the real thing
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is will you be willing
to live within your means?
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Whatever your income
is that's what you spend.
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If you make that decision,
obviously, then you have to
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gradually move toward it.
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Spending money you
don't have can be a lifestyle.
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I hate to mention it
but, it's almost addictive.
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You know.
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Do you see what I'm saying?
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Absolutely.
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Especially with credit cards.
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Yeah.
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Because people forget.
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They go out and they see
something that they want.
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They've got this line of
credit on their credit card.
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They want it.
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They want it now.
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They get it.
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And they forget about how
they have to pay that off.
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We see this all the time at
the end of the Christmas season
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where people go out and they get
into this generous giving mood,
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and they'll charge it
up on their credit cards.
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Then, sometimes, it takes
them until the next Christmas
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to get that paid
off with that interest.
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Now you teach a three
step simple process for getting
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out of debt.
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Would you share that with us?
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Yes, and do you know the amazing
thing is, when I go and do
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seminars, a lot of times
people will come to me who have
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been before.
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I did one in Hagerstown,
Maryland and a man up in
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Pennsylvania drove down the
first night and said, I don't
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need to be here because you gave
this at our camp meeting last,
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well, two years ago, he said.
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He said my wife and I decided
we were going to try to put this
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into practice and
see if we could do it.
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But, he said, just a month
ago we made the last payment
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on our house.
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We're debt free.
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We don't owe anybody anything.
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I've just come
tonight to say thank you.
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Lots of people have
told me similar stories.
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So it is possible.
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I know from my own testimony,
your testimony, many people,
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that making the
decision and finding a plan.
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So here's the three step plan.
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It's real simple.
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It's almost a four step plan
because there's a basic premise.
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Okay.
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The basic premise is that you're
going to be faithful with your
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tithe, or be on
Biblical principles.
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Do you see what I'm saying?
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And, of course, that
would include tithing.
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This is a good question
because you don't tithe to get
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blessings, you tithe the
blessings you already have.
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So you're going to say, I'm
going to start with what you're
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giving me, and
I'm going to faithful.
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But God has promised that He
will rebuke the devourer for our
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sake and open the windows
of heaven, and you know, all of
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these things.
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Put Me first and I'll bless
all the work of your hands,
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and so on.
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There's many, many
promises in the Bible.
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So I would just say
establish that principle.
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And someone comes to me and
says, Well, I can barely make my
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house payment.
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How could I start tithing?
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I say, well, you know, you're
the kind of person that needs
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God's help more
than most anybody.
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Amen.
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So put God first and
then He'll bless you.
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There's many, many
testimonies that that is true.
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I mean this is
antidotal, as we say.
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There are many stories
that would confirm that that's
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the case.
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It wouldn't make sense to a
CPA, by the way, unless he was
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a Christian.
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Do you understand?
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But you start there.
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That's the foundation.
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Then there are basically
three principles that I'll share
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with you.
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The first one is
declare a moratorium on debt.
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You're just going to say, I'm
not going to buy anything more
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on credit.
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That starts there because
even if you started paying off
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the other ones, if you kept
going in debt you never would
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catch up.
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Exactly.
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So you just say, I'm not
going to buy anything on credit.
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That's the first one.
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I say a moratorium on debt.
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The second one
is very interesting.
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That is to make a covenant
with God that from this point on
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any unexpected blessings
that you get you will know
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what it's for.
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It will be to put on your debts.
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Now this is real interesting
because most of us know
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pretty much, in fact, we
have our check direct deposited,
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but it's the same every month.
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So even before we get the stub
Kathy can put in the checkbook
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how much it is.
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So if we got money we weren't
expecting, that would be what
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most of us call a windfall.
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You know, some money
you weren't expecting.
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That happens to
people occasionally.
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Even like your
income tax, or whatever.
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You're expecting that, but
it's beyond your normal budget.
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I would just tell people
make a covenant with God.
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Sometimes people actually write
it out, or they make a prayer.
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Kathy and I did this.
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We knelt down beside our bed.
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It was in April of 1987.
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We were living in Georgia,
and the dogwoods were blooming
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around our yard.
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I can remember the very day.
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We knelt down and we said
to God, We don't think it's
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honoring You for us to
be paying all this interest.
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So what we're going to do is
we're going to make a covenant
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with You.
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We're going to promise You that
any extra money we get from any
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source, we're going to put it on
our debts until we're debt free.
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Now I believe that's very,
very important for this reason.
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This is the first principle.
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No more credit spending.
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The second one, make a
covenant or promise with God.
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This is amazing now,
what I'm going to ask you.
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Do you think God
wants your family in debt?
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Absolutely not.
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No!
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So once you make the covenant,
would it be logical for Him
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to want to bless you because
He knows what your plan will be
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with the extra funds?
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Lots of people have said, You
know, when we made the promise
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we were getting blessings.
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Here's the problem though, see,
if you don't make the promise.
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A man told me one time, We
got $2500 we weren't expecting
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and I said to my wife, How
did God know we needed a new
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riding lawn mower?
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So he just went out and
bought himself something else.
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Do you see what I'm saying?
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Yes.
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But if you'd made the covenant,
and you got $2500, you'd pay
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one of your credit cards off.
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Do you see what I'm saying?
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That's the way it is.
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So you tell God any extra money
from any source beyond what
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I normally spend for my living
expenses, I'm going to put it on
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debt till we're debt free.
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That's the second one.
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That's the covenant.
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The most interesting thing
is there's just so many stories.
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I could tell you stories
that when I do it brings tears
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eyes, what God
did for our family.
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A year and a half after we made
the promise we were debt free
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except for our home mortgage.
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All of our consumer
debt was completely paid off.
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Before long we
even paid our house off.
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Now this is amazing
because when we moved to
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Washington, D. C., it's
so much more expensive there,
00:10:13.27\00:10:15.31
we had to get a second mortgage.
00:10:15.87\00:10:16.84
I mean a mortgage again.
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The first mortgage up there.
00:10:18.57\00:10:19.60
But we've since paid that
one off because we know how
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to do it now.
00:10:22.11\00:10:23.08
Do you see what I'm saying?
00:10:23.09\00:10:24.06
Now that's the incredible.
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So the first one: moratorium;
no more credit spending.
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The second one
the covenant with God.
00:10:27.52\00:10:28.74
The third one is very
interesting, and that is list
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all of your debts.
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I encourage people to make
an inverted triangle, you know,
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with the point at the bottom.
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Put the largest debt at the top.
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For most people that
would be their home mortgage.
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But the amazing thing about this
is, this is really incredible
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to me, I've counseled many
couples when one of them was the
00:10:45.96\00:10:51.00
manager.
00:10:51.03\00:10:52.00
Let's just say the wife
was the manager, as Kathy is
00:10:52.01\00:10:54.27
in our case.
00:10:54.30\00:10:55.27
Or the husband's the manager.
00:10:55.28\00:10:56.32
I find frequently the other
spouse doesn't even know what
00:10:56.35\00:10:59.47
the money situation is.
00:10:59.50\00:11:00.73
They don't even talk about it.
00:11:00.76\00:11:02.28
Isn't that incredible?
00:11:02.31\00:11:03.31
It's, it's, I'm shaking my head
that it's incredible, but in our
00:11:03.34\00:11:07.15
family I'm the money manager.
00:11:07.19\00:11:08.71
Especially when we first married
we had a huge business debt
00:11:08.74\00:11:13.59
that we brought in.
00:11:13.60\00:11:14.57
J. D., it was just...
00:11:14.58\00:11:15.72
I was trying to figure
out how to overcome this debt.
00:11:15.75\00:11:19.75
He wasn't
really that interested.
00:11:19.79\00:11:21.06
So it's really very common.
00:11:21.09\00:11:22.95
It's very important though
that people put things together.
00:11:22.96\00:11:25.79
I tell people that want to
talk with me, if you're married,
00:11:25.82\00:11:29.07
I expect your
spouse to be there.
00:11:29.10\00:11:30.35
Well, she doesn't
know anything about money.
00:11:30.38\00:11:32.24
I say, but listen, whoever
you're married to, God gave you
00:11:32.27\00:11:35.93
that person to keep you
from doing stupid things,
00:11:35.96\00:11:38.24
so you should
counsel with them regularly.
00:11:38.27\00:11:40.10
It's just really amazing
how, you know, check and balance
00:11:40.13\00:11:43.21
a couple can be when
they're working together.
00:11:43.24\00:11:45.26
Now obviously one of them is the
one that manages the checkbook,
00:11:45.29\00:11:48.12
writes the
checks, and all of that.
00:11:48.15\00:11:49.40
But if they talk
about it, at least monthly,
00:11:49.43\00:11:51.79
you know, what our situation
is, and what we should do here,
00:11:51.80\00:11:53.51
what should we do there,
it really, really helped.
00:11:53.54\00:11:55.97
So the third one is list all
of your debts from the largest
00:11:56.00\00:11:58.83
to the smallest.
00:11:58.87\00:11:59.84
So the largest one up here would
be like your home mortgage,
00:11:59.85\00:12:01.85
or your student loans, or
your car loans, or whatever.
00:12:01.88\00:12:03.83
The ones at the bottom would
probably be the credit card
00:12:03.86\00:12:05.97
debts, because frequently people
are maybe a month or two behind
00:12:06.00\00:12:08.97
or whatever, but they could
pay them off if they had a plan.
00:12:09.00\00:12:11.97
So I tell people this is
just what we call the snowball
00:12:12.00\00:12:15.41
effect, the
ticket off, or whatever.
00:12:15.44\00:12:17.49
But you have to make the
minimum payment on every one
00:12:17.52\00:12:21.35
every month.
00:12:21.38\00:12:22.35
This is important to know.
00:12:22.36\00:12:23.33
I've talked to people, ah
well, this month I can't make my
00:12:23.34\00:12:26.02
Sears payment, or whatever,
you see, and they'll skip
00:12:26.05\00:12:29.09
something.
00:12:29.12\00:12:30.09
You can't do that.
00:12:30.10\00:12:31.07
You're ruining your credit.
00:12:31.08\00:12:32.05
Exactly right.
00:12:32.06\00:12:33.03
So I tell people, make the
minimum payment on every debt
00:12:33.04\00:12:35.58
every month.
00:12:35.61\00:12:36.58
But the one at the bottom,
any extra money that you get
00:12:36.59\00:12:39.63
from any source, maybe extra
working, selling off some unused
00:12:39.66\00:12:42.63
items...
00:12:42.66\00:12:43.63
We had a yard sale.
00:12:43.64\00:12:44.61
The only one we've
ever had in our lives.
00:12:44.62\00:12:46.13
It brought in enough money to
make a whole bunch of payments
00:12:46.16\00:12:49.15
on our house, because
those were principal payments,
00:12:49.18\00:12:51.45
you know.
00:12:51.48\00:12:52.45
It's incredible what happens.
00:12:52.46\00:12:53.46
But at any rate, sell
off stuff you don't need.
00:12:53.49\00:12:56.32
And I ask people, How many of
you think you have stuff in your
00:12:56.35\00:12:58.83
possession
you'll never use again?
00:12:58.86\00:13:00.17
Well, most everybody will raise
their hand because they do.
00:13:00.20\00:13:02.47
We save stuff.
00:13:02.50\00:13:03.94
Get rid of stuff you don't need.
00:13:03.97\00:13:05.20
Put the money on your debts.
00:13:05.23\00:13:06.78
That's things that
you can do as well.
00:13:06.81\00:13:08.89
But I'm just going to
share with you those principles.
00:13:08.92\00:13:11.83
Once a single debt is paid
off then what you used to pay on
00:13:11.86\00:13:16.44
that one you can pay on
the next one along with this
00:13:16.47\00:13:18.98
minimum payment.
00:13:18.99\00:13:19.96
Pretty soon you can sing
the victory song several times.
00:13:19.97\00:13:23.71
Now there's several reasons why
I say start with the small ones.
00:13:23.74\00:13:26.67
One is so
you're not discouraged.
00:13:26.70\00:13:29.11
You can say, well, man
we got that one paid off.
00:13:29.14\00:13:30.62
We can do this one.
00:13:30.65\00:13:31.62
You see the idea.
00:13:31.63\00:13:32.78
Because if you started on your
home for example, it might take
00:13:32.81\00:13:35.73
you several years to do
that, and you couldn't sing
00:13:35.76\00:13:37.83
the victory song.
00:13:37.86\00:13:38.83
Plus the home mortgage is tax
deductible, or the interest is
00:13:38.84\00:13:42.59
deductible; the
interest is tax deductible.
00:13:42.62\00:13:45.23
Where the interest we
pay on our credit cards isn't
00:13:45.26\00:13:47.76
tax deductible.
00:13:47.79\00:13:48.76
So you'd want to pay
those kind off first.
00:13:48.77\00:13:51.06
It's very good to pay
one off and then another.
00:13:51.09\00:13:54.53
and another, and another.
00:13:54.56\00:13:55.53
Another interesting thing
is credit cards are typically
00:13:55.54\00:13:59.08
the main reason
people get into debt.
00:13:59.11\00:14:00.86
But I've counseled with
people who had more than thirty
00:14:00.89\00:14:04.37
credit cards.
00:14:04.38\00:14:05.35
I mean they have like Master
Card and Visa, but then they
00:14:05.36\00:14:07.09
has gas cards, and store cards
and all these kind of things.
00:14:07.12\00:14:10.27
My counsel as a financial
counselor is not to have
00:14:10.30\00:14:12.72
more than two cards.
00:14:12.75\00:14:13.72
You know, a personal
one, and a business one,
00:14:13.73\00:14:15.57
or something like that.
00:14:15.60\00:14:16.57
That's what they tell you
when you want to get your credit
00:14:16.58\00:14:19.35
in good shape too.
00:14:19.38\00:14:20.35
The more credit cards you
have the worse your credit score
00:14:20.36\00:14:22.74
is going to be typically.
00:14:22.77\00:14:23.81
Even if you pay
them off every month.
00:14:23.84\00:14:25.57
And even if you, you know I
learned that even if you have
00:14:25.60\00:14:29.39
those credit cards, and you're
not using them, if you're not
00:14:29.40\00:14:31.77
carrying a good balance on them,
high balance, it actually lowers
00:14:31.80\00:14:36.15
your credit score.
00:14:36.18\00:14:37.15
Another thing is the more credit
cards you have, even paid off
00:14:37.16\00:14:40.36
credit cards, the more difficult
it is to get a loan because the
00:14:40.39\00:14:42.78
lender can look at
your credit history.
00:14:42.82\00:14:45.91
If you have all these cards you
could easily bankrupt yourself
00:14:45.94\00:14:49.10
and they wouldn't want you
to do that when they're giving
00:14:49.13\00:14:50.91
you a loan.
00:14:50.94\00:14:51.91
So that's kind of an
interesting thing also.
00:14:51.92\00:14:53.77
Well, you know, this is,
what you're saying is exactly,
00:14:53.81\00:14:56.91
without being trained,
but how the Lord led us.
00:14:56.92\00:14:59.48
When we married, as I said,
at first J. D. really wasn't
00:14:59.51\00:15:03.93
interested, well, it's not so
much that he wasn't interested
00:15:03.96\00:15:06.87
as he did not have that
propensity for money management.
00:15:06.90\00:15:11.30
He was a true entrepreneur.
00:15:11.33\00:15:13.28
He was very busy.
00:15:13.31\00:15:14.28
He was happy for
you to take care of it.
00:15:14.31\00:15:15.29
He was happy for
me to take care of it.
00:15:15.32\00:15:16.80
But I would show him at the end
of each month what our debt was,
00:15:16.83\00:15:21.58
and what payments I was making,
so that he would stay apprised
00:15:21.61\00:15:24.85
of the situation.
00:15:24.88\00:15:25.85
I began because I had a certain
amount of money that I would
00:15:25.96\00:15:30.35
budget for paying on
credit card debts and others.
00:15:30.36\00:15:34.14
And say, I forget what it was
now, but it was something like
00:15:34.17\00:15:37.17
$3000 a month.
00:15:37.20\00:15:38.68
So I started paying off
the smallest one, and I would
00:15:38.71\00:15:41.98
take that money and add it
to the next one, just ticking
00:15:42.01\00:15:44.99
those things off.
00:15:45.02\00:15:45.99
And it was amazing how rapidly
things started coming into...
00:15:46.00\00:15:49.84
Now this is incredible
what I'm going to tell you next.
00:15:49.87\00:15:52.52
Systematic approach to paying
off debt, just like for savings,
00:15:52.55\00:15:56.39
is incredible what it will do
because you know the investment
00:15:56.42\00:16:00.29
put in your debt is going to be
100% successful because you're
00:16:00.32\00:16:03.29
paying off the debt and
saving the interest, you see.
00:16:03.32\00:16:05.94
That's incredible.
00:16:05.97\00:16:07.14
But what we're talking about
now adds one other element,
00:16:07.17\00:16:10.31
and that's when you have
the Christian experience,
00:16:10.34\00:16:12.58
the Christian principles.
00:16:12.61\00:16:13.58
I'm not sure about your
past history, whether or not you
00:16:13.59\00:16:15.66
were involved in it with
the Lord at that time or not,
00:16:15.69\00:16:17.27
but the fact is it worked
because you were systematic.
00:16:17.30\00:16:19.77
But if you're systematic and
committed to a principle that
00:16:19.80\00:16:23.96
you've told the Lord, I'm going
to put You first, then you have
00:16:23.99\00:16:26.37
even blessings added to that.
00:16:26.40\00:16:28.43
Do you see what I'm saying?
00:16:28.46\00:16:29.43
It's almost a
multiplication table.
00:16:29.44\00:16:31.77
Well, since ours was business
debt, and we were each month
00:16:31.80\00:16:36.05
so far beyond what we thought
we could, I mean there was no
00:16:36.08\00:16:39.45
increase because
of the business debt.
00:16:39.48\00:16:41.39
We were saying we can't tithe
because there's no increase.
00:16:41.42\00:16:44.57
Basically after living for
about a year like that realized
00:16:44.60\00:16:48.83
this isn't working.
00:16:49.42\00:16:50.39
So we decided to just sit down,
and even though there was no
00:16:50.40\00:16:53.38
increase we said, okay, we
are going to give to the Lord
00:16:53.41\00:16:57.18
a certain amount of money each
month, to return this money.
00:16:57.21\00:17:00.48
And He did amazing things.
00:17:00.51\00:17:03.10
We'll talk about that
during another program.
00:17:03.13\00:17:04.88
So basically we're looking at...
00:17:04.91\00:17:07.63
Let's go over those
three principles one more time.
00:17:07.66\00:17:10.44
First is no
more credit spending.
00:17:10.48\00:17:12.26
No more credit spending.
00:17:12.29\00:17:13.79
Yeah.
00:17:13.82\00:17:14.79
Say there's a
moratorium on debt.
00:17:14.80\00:17:15.77
That's right.
00:17:15.80\00:17:16.77
I don't care if I
need a new washing machine.
00:17:16.78\00:17:18.71
I'm going to save the money
until I have the money to buy
00:17:18.74\00:17:21.17
that washing machine.
00:17:21.20\00:17:22.17
Yep.
00:17:22.18\00:17:23.15
Okay.
00:17:23.16\00:17:24.13
The second thing...
00:17:24.14\00:17:25.11
By the way,
that's not easy to do.
00:17:25.12\00:17:26.09
No.
00:17:26.10\00:17:27.07
You understand
what I'm talking about.
00:17:27.08\00:17:28.05
Credit is almost like an
addiction because whenever you
00:17:28.06\00:17:30.18
need something you just use
your credit card and get it.
00:17:30.21\00:17:32.13
But studies have shown
that sometimes people who don't
00:17:32.16\00:17:35.53
pay their credit card off every
month end up paying almost twice
00:17:35.54\00:17:39.28
what they paid for the thing
when they add all the interest
00:17:39.31\00:17:41.81
that's added each time.
00:17:41.84\00:17:42.93
Do you see what I'm saying?
00:17:42.96\00:17:43.93
Especially if you're
paying just minimum payments.
00:17:43.94\00:17:45.22
Uh huh.
00:17:45.25\00:17:46.22
It's pitiful.
00:17:46.23\00:17:47.20
But now the second thing
was to make an inverted...
00:17:47.21\00:17:50.27
No, no, that's the third one.
00:17:50.30\00:17:51.28
Oh, excuse me.
00:17:51.31\00:17:52.28
The covenant, remember?
00:17:52.29\00:17:53.26
The covenant.
00:17:53.27\00:17:54.24
Yeah, that's important.
00:17:54.25\00:17:55.22
Make this promise with God.
00:17:55.23\00:17:56.20
As you bless me any extra income
that I get from any source
00:17:56.21\00:17:59.79
will go on those debts.
00:17:59.80\00:18:00.99
That's good.
00:18:01.02\00:18:01.99
So somebody gives you a
gift, or you sell something,
00:18:02.00\00:18:05.42
and get a little more
than you were expecting for it,
00:18:05.45\00:18:07.20
that goes toward your debt.
00:18:07.23\00:18:08.70
Oh, yes.
00:18:08.73\00:18:09.70
And then the third one
is the inverted pyramid.
00:18:09.71\00:18:11.51
That's it,
listing all the debts.
00:18:11.54\00:18:13.16
The largest ones at the
top, listing all the debts,
00:18:13.19\00:18:15.59
bringing it down to
the smallest, and then...
00:18:15.62\00:18:17.98
Starting at the bottom
and working up to it, yeah.
00:18:18.01\00:18:20.69
That's wonderful.
00:18:20.73\00:18:21.96
Now once someone gets out of
debt, I guess the way to stay
00:18:21.99\00:18:27.43
out of debt is to keep following
those first two principles.
00:18:27.46\00:18:31.87
I'm not going to borrow money.
00:18:31.90\00:18:34.79
I'm not going to buy something
unless I have the cash to pay
00:18:34.82\00:18:37.75
for it.
00:18:37.76\00:18:38.73
I think that's true.
00:18:38.74\00:18:39.71
Living within your means.
00:18:39.72\00:18:40.98
Then also, as Christians,
we have another unusual thing,
00:18:41.01\00:18:44.26
and then we can ask God
to providence to help provide
00:18:44.29\00:18:47.19
something within our budget
that would meet our needs.
00:18:47.22\00:18:49.79
See, isn't that awesome?
00:18:49.82\00:18:51.13
I mean when you think about it?
00:18:51.16\00:18:52.13
I've listed a bunch of points
also that I've used before.
00:18:52.14\00:18:56.85
Six things that people could
do once they've established
00:18:56.88\00:19:00.27
the three principles.
00:19:00.30\00:19:01.27
I'll share those with you.
00:19:01.29\00:19:03.19
I think it's valuable to know.
00:19:03.22\00:19:04.55
One of them is
establish a budget.
00:19:04.58\00:19:06.61
This is kind of funny.
00:19:06.64\00:19:07.61
People say, Well, duh,
aren't you on a budget?
00:19:07.62\00:19:09.52
Do you know that many people
just live from month to month
00:19:09.55\00:19:11.88
and pay whatever
debt squeaks the loudest?
00:19:11.91\00:19:13.31
They don't really
have a budget or a plan.
00:19:13.34\00:19:15.19
What worked for you and
what worked for me was because
00:19:15.22\00:19:17.79
we had a plan.
00:19:17.82\00:19:18.79
We had a budget.
00:19:18.80\00:19:19.77
Well, here's what our
income is, and here's what our
00:19:19.78\00:19:20.75
expenses are.
00:19:20.76\00:19:21.73
That's important.
00:19:21.74\00:19:22.92
Another one, I would say,
is set goals for your family.
00:19:22.95\00:19:26.21
A goal, for example, would be
we may use our credit card for
00:19:26.24\00:19:29.86
convenience when we
go on vacation next year,
00:19:29.89\00:19:31.61
but we're going to have
the money saved to pay it
00:19:31.64\00:19:33.18
when we get back.
00:19:33.19\00:19:34.21
Do you see what I'm saying?
00:19:34.24\00:19:35.21
Yes, exactly.
00:19:35.22\00:19:36.19
Instead of paying for it
all year long, or you could say,
00:19:36.20\00:19:38.15
you know, by this time
next year we're going to have
00:19:38.18\00:19:40.29
the car paid off.
00:19:40.32\00:19:41.29
Because most people just pay the
payment one right after another,
00:19:41.30\00:19:44.22
instead of just calling the
bank and saying, You know what,
00:19:44.25\00:19:45.87
if I paid it off next month
I'd save some money, wouldn't I?
00:19:45.90\00:19:48.32
How much would the pay off be?
00:19:48.35\00:19:49.94
You know, make a plan.
00:19:49.97\00:19:51.23
Double up payments on things.
00:19:51.26\00:19:52.57
You know, if you
can, to be debt free.
00:19:52.60\00:19:54.32
Those are important.
00:19:54.35\00:19:55.32
And then another one
is destroy credit cards.
00:19:55.33\00:19:58.73
And then I have a little if
in my presentations, generally.
00:19:58.76\00:20:01.94
I say if you find you're
not paying it off every month,
00:20:01.97\00:20:05.43
or if you're spending on
stuff you wouldn't normally buy,
00:20:05.46\00:20:07.90
except that it's available
on credit, and I would say also
00:20:07.93\00:20:10.88
to use credit cards...
00:20:10.91\00:20:12.06
I mean I have to use a credit
card in traveling, renting cars,
00:20:12.09\00:20:15.30
and various things like
that, but you want to pay it off
00:20:15.33\00:20:17.65
every month.
00:20:17.66\00:20:18.63
You know something interesting?
00:20:18.64\00:20:19.78
Studies show that even among
people who pay their credit card
00:20:19.79\00:20:24.19
off every month, they
spend more with the credit card
00:20:24.22\00:20:27.63
than if they didn't have credit.
00:20:27.66\00:20:28.85
Isn't that incredible?
00:20:28.88\00:20:30.76
So I would say destroy credit
cards if you have a problem
00:20:30.79\00:20:33.59
with it like that,
or get down to two.
00:20:33.62\00:20:36.44
The real important thing
is I would use the credit card
00:20:36.48\00:20:40.02
for my advantage, not the
credit card company's advantage.
00:20:40.05\00:20:44.01
Someone asked me this several
years ago, What interest rate
00:20:44.04\00:20:46.69
are you paying
on your credit card?
00:20:46.72\00:20:47.86
Because you know they advertise
these low introductory rates,
00:20:47.89\00:20:50.42
and so on.
00:20:50.45\00:20:51.42
And I, because Kathy was
managing, I said I really
00:20:51.43\00:20:53.80
don't know.
00:20:53.83\00:20:54.80
It doesn't matter to me because
I'm not making any interest
00:20:54.81\00:20:56.79
payment.
00:20:56.82\00:20:57.79
What matters to me is what
benefits I can get, like I'm
00:20:57.80\00:21:00.52
saving up miles so that Kathy
can travel with me when we,
00:21:00.55\00:21:03.54
you know, go on trips and so on.
00:21:03.57\00:21:05.35
So use it for your
benefit not for their benefit.
00:21:05.36\00:21:07.82
And that's the real benefit
I think of the credit card
00:21:07.85\00:21:10.30
situation.
00:21:10.33\00:21:11.30
Another one is to purchase
depreciating items with cash.
00:21:11.31\00:21:16.02
That means things that
lose their value quickly.
00:21:16.05\00:21:18.73
The very best thing you can
do would be to pay cash for it.
00:21:18.76\00:21:21.83
Most people, because of the
housing market could not pay
00:21:21.86\00:21:26.53
cash for a house.
00:21:26.56\00:21:27.53
They say, for example,
that 21/2 to 3 times your annual
00:21:27.54\00:21:33.40
income should be the total
that you have for investing
00:21:33.43\00:21:37.89
in a house, for example.
00:21:37.92\00:21:39.42
But in the D. C. area where I
live, and working for the church
00:21:39.45\00:21:42.54
at a fixed salary, you know,
this is three times more than
00:21:42.57\00:21:45.90
that figure.
00:21:45.93\00:21:46.90
So you have to really,
really be careful when you make
00:21:46.91\00:21:49.02
a purchase.
00:21:49.05\00:21:50.02
You know, ask God's providential
leading for the purchase,
00:21:50.03\00:21:52.56
and that kind of thing.
00:21:52.59\00:21:53.56
But for a house, most people
could not pay cash for it.
00:21:53.57\00:21:58.63
By the way, I ask
people, Do you know why houses
00:21:58.66\00:22:01.00
cost so much?
00:22:01.03\00:22:02.00
The answer is really simple.
00:22:02.01\00:22:04.00
Because credit is available.
00:22:04.03\00:22:05.74
If credit was not
available, no one could sell a
00:22:05.77\00:22:09.19
$700,000 house.
00:22:09.22\00:22:10.67
Do you get the point?
00:22:10.70\00:22:11.95
Because if we had to come
up with cash, houses would be
00:22:11.98\00:22:15.26
down like they were years ago,
under $100,000, or whatever,
00:22:15.29\00:22:18.04
because some would
have to save up for it.
00:22:18.08\00:22:19.37
But because credit is available
they can charge these big high
00:22:19.40\00:22:22.05
prices for things.
00:22:22.08\00:22:23.14
And the amazing thing is we're
so used to paying on credit for
00:22:23.17\00:22:26.74
everything that we do that.
00:22:26.77\00:22:27.86
I mean, think of
how much cars are.
00:22:27.89\00:22:29.54
I mean the average
car is $20,000 or more.
00:22:29.57\00:22:31.82
This is amazing, you
know, when you think about it.
00:22:31.85\00:22:34.96
And, of course, people are
making more money now as well,
00:22:34.99\00:22:37.67
but a lot of people are priced
out of the market who are on the
00:22:37.70\00:22:41.17
lower income levels of
our society, which is really
00:22:41.20\00:22:43.73
something serious.
00:22:43.76\00:22:44.73
And then I thought about
beginning economy measures.
00:22:44.74\00:22:48.46
In other words, there's
many things that you can do:
00:22:48.49\00:22:51.79
energy savings, gas savings,
go on shorter trips, or a lot of
00:22:51.82\00:22:57.75
different things.
00:22:57.78\00:22:58.75
If I had my book, I list a whole
bunch of things, but people
00:22:58.76\00:23:00.29
know what those are.
00:23:00.32\00:23:01.29
But just plan on it.
00:23:01.30\00:23:02.61
Then the sixth one that I
have is a follow up to the three
00:23:02.64\00:23:06.28
points, is to have a sale and
sell off stuff you don't need.
00:23:06.29\00:23:09.59
Because lots of people have
lots of things they don't need,
00:23:09.62\00:23:12.60
and it could be valuable.
00:23:12.63\00:23:13.62
You know, somebody's trash
is someone else's treasure.
00:23:13.65\00:23:15.67
That's why they have yard sales.
00:23:15.70\00:23:17.00
We used our trash to make
a significant amount of money
00:23:17.03\00:23:21.56
to go on our debts.
00:23:21.59\00:23:23.01
Kathy says it's time
to do another one just to
00:23:23.04\00:23:25.85
get rid of junk.
00:23:25.88\00:23:26.85
So it's important that you
think about it, and that is
00:23:26.86\00:23:30.57
to pare down.
00:23:30.60\00:23:31.57
Now I want to tell you something
from a Christian perspective
00:23:31.58\00:23:33.95
which is very interesting to me.
00:23:33.98\00:23:35.72
We actually have counsel that
as we near the close of time
00:23:35.75\00:23:41.11
we should be cutting our
possessions smaller and smaller,
00:23:41.12\00:23:43.77
so not much of our stuff
gets burned up at the end.
00:23:43.80\00:23:47.09
Isn't that incredible?
00:23:47.12\00:23:48.56
So you could sell off stuff.
00:23:48.59\00:23:49.83
Put it into advance the cause
of God, or help a young person
00:23:49.86\00:23:52.18
through school, help in a
mission project, or pay for
00:23:52.21\00:23:55.12
an orphans education.
00:23:55.15\00:23:56.12
You know, there's a lot of
different things people can do.
00:23:56.14\00:23:57.91
But then that's satisfactory.
00:23:57.94\00:24:00.70
When you stop and think
back on your life, you know,
00:24:00.73\00:24:02.82
what did I accomplish?
00:24:02.85\00:24:03.82
It wasn't just the things I've
done, it's people I've helped,
00:24:03.83\00:24:06.69
and things that I've
done to make a difference
00:24:06.72\00:24:08.30
in God's cause.
00:24:08.33\00:24:09.30
Isn't that true?
00:24:09.31\00:24:10.28
Yes, absolutely.
00:24:10.29\00:24:11.26
And you know, I was thinking
also one of the things that we
00:24:11.27\00:24:13.74
used, and I know you teach.
00:24:13.77\00:24:14.95
I've heard you teach this before
is that when we, for example,
00:24:14.98\00:24:20.03
with our car, each month,
because I'd got the credit card
00:24:20.06\00:24:23.71
payments, all of our credit
card debt was gone, so each
00:24:23.74\00:24:27.20
month what I would do is
make an extra principal payment
00:24:27.23\00:24:30.07
on the car and made sure that
I could do that in our contract.
00:24:30.10\00:24:32.84
Yes.
00:24:32.87\00:24:33.84
We paid our car off
nearly two years in advance
00:24:33.85\00:24:36.33
by doing that, and the
same applies to the mortgage.
00:24:36.36\00:24:39.19
Oh yes, yes.
00:24:39.22\00:24:40.42
You can really cut that back.
00:24:40.45\00:24:41.78
Really, especially
in the early years.
00:24:41.81\00:24:43.37
In fact almost 20
years in a 30 year mortgage.
00:24:43.40\00:24:46.38
It's very easy to make a second
payment and save lots, and lots
00:24:46.41\00:24:49.37
of interest.
00:24:49.40\00:24:50.37
That's quite an
incredible thing.
00:24:50.38\00:24:52.58
One other thing I wanted to tell
you about, and this is just us
00:24:52.61\00:24:55.54
from a Christian perspective,
is sometimes people will come
00:24:55.57\00:24:59.09
to you or me and want
you to co-sign for them.
00:24:59.12\00:25:02.03
The Bible says you should
never do that, Proverbs 6:1-5.
00:25:02.06\00:25:06.71
It says four times in the book
of Proverbs, which is from the
00:25:06.74\00:25:09.30
wisdom of the wise man,
who was also inspired by God.
00:25:09.33\00:25:12.28
Never co-sign for someone.
00:25:12.31\00:25:14.16
Now I have to always say this.
00:25:14.19\00:25:16.36
It's important as a Christian
that we're willing to help
00:25:16.39\00:25:19.05
people in need, but we
should not become responsible
00:25:19.08\00:25:22.14
for their debts.
00:25:22.17\00:25:23.22
Do you see what
I'm saying there?
00:25:23.25\00:25:24.53
Exactly!
00:25:24.56\00:25:25.53
Sometimes people will come
to you and say, Well, you say
00:25:25.54\00:25:27.83
you're a
Christian and I need help.
00:25:27.86\00:25:29.06
The bank has the money but
they won't let me get the money
00:25:29.09\00:25:32.23
unless you sign for me.
00:25:32.26\00:25:33.23
You might be willing to
help them, but do not become
00:25:33.24\00:25:35.99
responsible for their debts.
00:25:36.02\00:25:37.41
You would not believe the
stories that people have told
00:25:37.44\00:25:39.99
me about co-signing for
their kids to go into business,
00:25:40.02\00:25:42.49
or to buy a car for
someone, or whatever.
00:25:42.52\00:25:45.08
Let me encourage you, be
generous, and be willing to help
00:25:45.11\00:25:48.93
people, but do not co-sign
for someone when the Bible says
00:25:48.96\00:25:51.86
do not do that.
00:25:51.89\00:25:52.86
Excellent counsel.
00:25:52.87\00:25:54.20
Very briefly, we just have
a moment left, but what about
00:25:54.23\00:25:57.44
filing of bankruptcy?
00:25:57.47\00:25:58.99
Well, bankruptcy is available
for unusual circumstances.
00:25:59.02\00:26:03.38
Bankruptcy is not in the Bible.
00:26:03.41\00:26:05.36
Sometimes people take
Deuteronomy 15:1 and say,
00:26:05.39\00:26:08.15
you know, at the end of every
seven years you should forgive
00:26:08.16\00:26:09.85
the debt.
00:26:09.86\00:26:10.83
But real simple, the next verse
in verse 2 says that God is
00:26:10.84\00:26:13.24
talking to the creditors, the
lenders, you know, because you
00:26:13.27\00:26:16.53
should not charge interest
for longer than seven years.
00:26:16.56\00:26:19.02
That's very interesting.
00:26:19.05\00:26:20.02
But from the person who borrows
the money, we should do our best
00:26:20.03\00:26:24.33
to pay it back.
00:26:24.36\00:26:25.33
I tell people, don't file for
bankruptcy because it's going
00:26:25.34\00:26:28.19
to ruin your credit.
00:26:28.22\00:26:29.19
It's going to be on your
credit record for ten years.
00:26:29.20\00:26:30.62
Even some things, like you could
read a business application,
00:26:30.65\00:26:35.02
have you ever filed
for bankruptcy protection?
00:26:35.05\00:26:37.21
So that should be a last resort.
00:26:37.24\00:26:38.58
In my counseling, in 15
or 20 years of counseling,
00:26:38.61\00:26:41.69
I've only counseled two
people to file for bankruptcy.
00:26:41.72\00:26:43.61
Both have been single women
who've been left in the lurch
00:26:43.64\00:26:46.08
by a spendthrift husband who
took off to Alaska, or whatever.
00:26:46.11\00:26:48.63
There was no way they could have
paid off the bills that they did
00:26:48.66\00:26:51.65
not personally incur.
00:26:51.68\00:26:52.65
Do you see what I'm saying?
00:26:52.66\00:26:53.84
But just to do it because your
credit cards are high or you've,
00:26:53.87\00:26:56.75
you know, those kinds of things.
00:26:56.78\00:26:58.29
I don't think it would be
appropriate from a Christian
00:26:58.32\00:27:00.46
perspective, or from a moral
perspective, for your fellow men
00:27:00.49\00:27:03.45
who have trusted you.
00:27:03.48\00:27:04.45
Now remember, it's available.
00:27:04.46\00:27:05.93
In certain circumstances
I would recommend it.
00:27:05.96\00:27:08.22
Ed we're already out of time.
00:27:08.25\00:27:10.02
This program just flew by.
00:27:10.05\00:27:11.68
Ed thank you so much for coming
to share what you have learned
00:27:11.71\00:27:15.68
from the Bible, and how
you put it into practice.
00:27:15.71\00:27:18.13
It's been a pleasure to be here
and I hope that the viewers have
00:27:18.16\00:27:20.79
gained some tips that
would be helpful to them.
00:27:20.82\00:27:22.89
I know they have and I
want to invite you back.
00:27:22.92\00:27:25.13
I know you're going to
come back and do a couple more
00:27:25.16\00:27:27.79
programs with us.
00:27:27.82\00:27:28.80
So we encourage you to watch
for some additional programs
00:27:28.83\00:27:32.93
with G. Edward Reid, author
of It's Your Money Isn't It?
00:27:32.96\00:27:36.56
If you'd like to contact him
you can go to our 3ABN website
00:27:36.59\00:27:40.96
and we actually have a link to
his website that you can get on
00:27:40.97\00:27:43.97
to get these money principles.
00:27:44.01\00:27:46.31
Thank you so
much for joining us.
00:27:46.34\00:27:48.06
And now may God's grace be
with you through out the rest
00:27:48.07\00:27:51.66
of the day.
00:27:51.69\00:27:52.70