3/30/08 Finding Financial Freedom

I know we’re involved in a study on Spiritual Growth,

and until a few days ago

I had made plans to get us back into that study this morning.

But I’ve decided to keep us out of the study one more week

because there is a Biblical concept I want to share with you

that has tremendous relevance to some things going on in our nation right now.

It is impossible to pick up a newspaper

or listen to a news broadcast these days

without seeing a head line

or hearing another lead story on the chaotic financial mess in our nation at present.

Just this past week I read an article that began...

NEW YORK (AP) - For months, Americans have been subjected to a sort of economic water torture - a maddening drip of bad news about jobs, gas prices, sagging home values, creeping inflation, the slouching dollar and a stock market in bumpy descent...

As economists and Wall Street types grope for historical perspective - which is another way of saying a road map out of this mess - Americans are nervously wondering about retirement savings, interest rates, jobs that had seemed safe. They are surveying the economic landscape and asking: Just how bad is it?

They are peering over the edge and asking: How far down?

And the scariest part of all? No one can say for sure...

The article then went on to give an overview on how we got into this mess

and what might be done about it.

Nine years ago I took two weeks

to share with you

two Biblical principles about money

that, taken together form what I believe to be the foundation

for the kind of financial freedom God wants His people to know.

One of those principles,

the one I’ll share with you in the next few minutes,

could not be more relevant to what we face in our nation today.

In fact it is so relevant

that this past week I have felt compelled to share it with you once again.

I am not a prophet.

I make no claims at being one.

But I am a man who knows

that the basic life principles God shares with us work.

They work whether we are Christians or not,

they work because they’re true.

And the thing that has fascinated me so much

about the current economic turmoil in our nation

is the realization that it has come about to a great degree

because our nation as a whole utterly rejected the principle I will share with you this morning

and chose, instead, to do exactly the opposite.

When I taught this principle nine years ago

there were some who felt I should not waste our valuable time together talking about money.

There were some who heard what I said

and suggested that it was simply one of several equally valid financial philosophies.

There were a number of folks who got very excited about the concept

for a few weeks or a few months,

and then went back to their old patterns.

But there were also a few who heard,

and then chose to incorporate the principles into their life.

And now, nine years later,

when they read the headlines

it causes them no anxiety,

no fear,

no personal turmoil.

So, with that as background,

let me take you back to that Biblical concept I shared with you nearly a decade ago,

with the hope that it might help lead others into freedom.

And we need to start with a little background

that will help us

better appreciate why this principle

is in some ways uniquely critical

to our point in human history.

We have undergone a dramatic change

in our culture during the past 30 or 40 years,

a change that has profoundly altered

our cultural understanding of

and relationship to debt.

Lack of as much money

as we would like to have

has always been a characteristic

of most people

in most cultures

for most of human history.

But up until about 30 or 40 years ago

most people would end their month

with all their money gone

and a debt load limited to

their house mortgage

and possibly their car.

And if we were to back up 40 years earlier than that,

there would, of course, not have been a car debt,

and most families would not have had a mortgage, either.

But then during the mid 60’s

through the introduction of VISA and MasterCard

and a strong push on the part of many other organizations,

and businesses,

and financial institutions

to encourage the use of time payments

and credit cards,

for the first time in history

wide-spread,

easily accessible,

long-term credit

became available to virtually all of the

wage earners in our country.

This accessible credit base has broadened

throughout the past 30 years

until now you don’t even need

a visible source of income to get credit.

Several months before my daughter graduated from high school

she began receiving a series of pre-approved VISA and MasterCard applications in the mail.

A number of them promised her ‟financial freedom!” with credit lines of from 3 to 5 thousand dollars.

During a period of about a year and a half

I think she must have received

at least 20 such applications.

If she had wanted to,

at nineteen years old

she could have had more than $50,000.00

in VISA and MasterCard credit available.

And she didn’t have a job at the time - she was a student.

Along with this credit-oriented revolution

has come a strong push to educate the buying public

in a whole new way of approaching purchases.

Whereas in the past

people would be chiefly concerned

with the exact price of an item,

and whether or not they had the money to pay for it,

now we are trained to think in terms of

‟how much the monthly payments will be”

or what the minimum payment on our balance is.

Appliances no longer cost $459.95.

They now cost just $35.00 a month.

I can remember the initial advertising blitz

for MasterCard during the late 60’s in Seattle.

All over the city there were billboards

showing a hand that was holding something,

but during the first phase of the campaign

the hand was holding just an empty white rectangle.

The caption on the ad said something like:

WATCH THIS SPACE...IT WILL CHANGE YOUR LIFE

After a few weeks

the blank spot was then filled in

with a MasterCard.

And the advertising could not have been more true.

Many of you here today

are just enough younger than I am

so that you have never known

anything other than a debt-funded approach to economics.

And then, in the more recent history of our economy

a whole new source of credit has surged into the American system.

As housing values began to increase dramatically around the country

people began viewing the equity in their homes

as a sort of bottomless pool of cash.

Either through refinancing the entire loan every few years

or through huge home equity lines of credit

people kept their mortgages at the highest possible level

while using the cash for everything from groceries to boats, or cars, or vacations, or big screen TV’s.

The assumption was that housing prices would go up forever,

so there would always be more “free” money available.

And before I go any farther

let me assure you that Scripture

does not tell us that borrowing,

or the use of credit,

or credit cards,

or the use of home equity loans is a sin.

Borrowing money

and buying on credit and having debt

is not a sin and it is not forbidden in Scripture.

But at the same time,

once we as a nation bought into this

debt-funded approach to personal finances

we lost sight of several major truths

and it has had a profound affect

on the Christians who have bought into this mainstream philosophy in our society.

First of all, we have lost sight of the truth about the real nature of the

borrower/lender relationship.

Our financial institutions and stores and businesses

try hard to convince us that the use of credit

is just a helpful convenience between two friends.

“We’d love to help you out with this purchase -

just fill out these few simple forms.”

Solomon had a far more accurate perspective on the arrangement

when he tells us in Prov. 22:7

The rich rules over the poor, And the borrower becomes the lender's slave.

Scripture does not tell us that borrowing is wrong,

it simply tells us that when we borrow

we are volunteering for slavery.

Slavery is not a sin.

It is just not the most desirable state

in which to live.

There are times when a brief period of slavery

may be necessary to allow us to pursue other

long-term goals.

But the whole message of Scripture

is that volunteering for slavery

is something we should only do

with full knowledge of what we are doing

and then only when we are convinced

it is a necessary short-term necessity

that must exist

in order to move us toward our long term goals.

Debt is not a sin,

it is rather our choosing to place ourselves

into a slave/master relationship

with the one we borrow from,

with both a legal and moral obligation to repay

all that we owe with interest.

You know how they now have those warning messages

printed on all cigarette packages.

I think there should be one printed on all credit cards and loan applications.

It would read:

WARNING: USE OF THIS CREDIT PLACES THE USER UNDER A SLAVE/MASTER RELATIONSHIP WITH THE LENDER AND LEGALLY OBLIGATES THE USER TO FULL REPAYMENT OF ALL BORROWED FUNDS WITH INTEREST.

And the second,

and by far the greatest loss

that has resulted from our national debt orientation

is the loss of a debt-free mentality.

Which brings us to the principle I want to share with you this morning.

Financial freedom comes from choosing to approach our financial stewardship from a debt-free mentality.

Most people in our society today

never seriously think in terms of being debt-free.

Of course, we would all like to be debt free,

but we have been conditioned into believing

that living with debt

is just a given in life.

If we are going to drive cars

if we are going to live in houses,

if we are going to get furniture

and school clothes for the kids

and go on vacations

and make it through Christmas

there is no other way

except to incur a measure of debt.

3% of the people in our nation

own their own homes without a mortgage.

When we come to Scripture,

we see a very different mentality

and a very different approach to life being offered.

All the way through Scripture

freedom from debt

and freedom from slavery

are held up as both evidences of God’s blessing

and goals to be pursued

by God’s people.

In the 28th chapter of Deuteronomy

Moses is talking to the people of Israel

about the blessings that will come to them

if they are obedient to the Lord,

and about the curses that will come upon them

if they are not.

He is spelling out the terms of the law covenant,

the life-with-God arrangement

based on obedience to the Old Testament law.

Now that law system itself, of course,

was doomed to failure

because it was rooted

in man’s efforts to perform for God

rather than God’s ability to perform in and through man.

But it is interesting to note the things

that God promised

both for obedience

and for disobedience.

For obedience one of the things He promised was this:

‟The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow.”

Then in verses 43-44 of Deuteronomy chapter 28

when he is telling them of the curses that will come upon them for disobedience,

he says:

The alien who is among you shall rise above you higher and higher, but you shall go down lower and lower. "He shall lend to you, but you shall not lend to him; he shall be the head, and you shall be the tail.

Consistently, Scripture confirms what we all know already

that indebtedness is not the way God

really intends for His people to spend most of their lives.

OK so what?

So in a practical sense, where does that leave us?

As Christians, how are we suppose to relate

to this whole concept of debt?

Our freedom in this area begins with our commitment to an attitude of learning to become debt-free.

Without that goal deeply planted within us

it will never happen.

There is no magic way

of making that goal a living reality in our lives.

It happens only when we choose to

accept it as a goal for our lives.

But in our culture,

I personally believe that

one of the biggest barriers

to God’s people living debt-free is ignorance.

We have been bombarded

with an endless barrage of education

and advertisement

conditioning us to accept

the absolute reasonableness

of living and buying on credit,

with almost no one talking about

the possibility of working toward becoming debt-free.

For some of you,

this is the first time you have ever heard the concept

discussed in a Christian setting

or perhaps in any setting.

So, step #1 is recognizing and accepting the goal of becoming debt-free,

making it a long-term anchor

in all of our financial thinking.

Then, step #2 is establishing a plan

by which that goal

can become a reality in our lives.

I’ll explain that plan in our closing few minutes,

but let me say first that

the greatest hurtle is not the plan,

it is choosing to think differently

about the way we relate to money and the things we buy.

Most families who become serious about pursuing the goal of becoming debt-free can be totally debt-free with the exception of their house in 3 years, and totally debt-free including the house in about ten years.

Now the plan has just two steps to it.

Step #1 is to create a surplus of money each month.

And right here is where I run the risk of losing you.

You say to yourself,

‟Right Larry! I have been trying to create a surplus for years.

Not only can I not create a surplus,

I can’t even make it to the end of the month!”

The truth is,

baring those unusual, temporary, transitional times in our lives

when we may be unemployed,

the surplus really is there.

We just can’t see it

because we have been so conditioned

into thinking in terms

of always being in debt

that we cannot see it.

Once a person begins to think in terms

of becoming debt free

it is amazing what we see

and where we discover money

to move us toward that goal.

With most of us

a lot of that surplus

is in our non-essential impulse buying.

I can show you where some of you

can find $100.00 a month instantly.

If you buy one large mocha or latte a day

five days a week

its costing you $100.00 a month.

And when I say that

there is a terrified little voice inside you

that says, ‟OH NO! He’s going to take all my happy things away! I’m going to have to live on bread and hamburger and water for the rest of my life!”

And in response

the only thing I would say

is that the principles God offers us

are always given out of His love

to bring us into a richer, more fulfilling life.

Any workable plan for financial freedom

must include a reasonable amount for recreation and entertainment.

But the key is that there must be a plan.

The endless, unguided impulse driven approach to spending

that so dominates our society today

will never get us where we want to be

and certainly never bring us into financial freedom.

I know that what I offer you today

is an approach that will only appeal

to those who have grown weary of the slavery.

If you are still at the point

where you don’t really mind

having all of your financial masters

telling you what you must do with your money

and what date it has to be done by

the instant you get your paycheck

then you are not yet hungry for freedom.

God does not demand financial freedom

from His people,

He simply offers it to those

who have grown weary of slavery.

Now for most of us

creating a monthly surplus

cannot be done

without a written budget

that limits our monthly spending

in each of the categories within the budget.

If you’re like we were as a family,

you’ll need some help in the process of establishing that budget.

One excellent resource for that help

is a ministry called Crown Financial Ministries.

You can reach them at 1(800)722-1976.

Tell them you want to establish a family budget

and need some materials to help.

Then, once you have established a monthly surplus

the next step is to start putting that surplus onto the highest interest debts you have

which are usually the VISA and MasterCard.

Then when those are paid off

the surplus is shifted to the car loan,

and when the car is paid off

the surplus is shifted to the house.

And here again our conditioned thinking

will blind us to the truth.

We think to ourselves - ‟RIGHT!

As if an extra hundred dollars on my house loan will make any difference!

I owe $220,000.00!”

Well, let me present it differently

and see if it helps.

If someone were to come up to you

and tell you that if you would invest $149.36 with him

he would instantly give you $1,249.07 in return

would you do it?

I want to show you something

that I think may help some of you

think differently about a debt-funded existence.

This overhead is the first page

of an amortization schedule

on a $200,000.00 loan for 30 years

at 7.5% interest.

That’s a pretty good interest rate,

and its kind of an average amount

for a new home loan.

You probably know this,

but an amortization schedule

simply lists each payment,

and tells how much of it goes to reduce the loan balance,

and how much goes to interest.

In this schedule there are a total of 360 payments,

one a month for 30 years.

The monthly payment is $1398.43.

For the first payment,

of that $1398.43

$148.43 goes to pay off the loan,

and $1250.00 goes to interest.

But now look at the second payment.

The total payment amount is the same: $1398.43.

Because your $148.43 principle payment the previous month has reduced your loan balance a little,

$.93 more of the second payment goes to principle reduction.

But, if when you made that first payment

you were to write a second check for $149.36 and mark it to go toward principle reduction,

it would instantly save you $1249.07 in interest

and in effect eliminate that second payment from the schedule.

If you were to do this every month for the first year

you would have paid an additional $1918.00,

but you would save yourself $14,856.00 in interest = 774% return on your money,

and you would have shortened the length of your loan by one full year.

If you were to make an additional $450.00 payment on your house each month

with this particular loan,

you would own your house

in less than 15 years

and save yourself $169,710.00 in interest.

‟So where am I going to get an extra $450.00 a month?”

How much are you paying right now on your credit cards, car payment, and other time payments?

‟But that means I’d have to keep driving this same car for years,

and maybe not ever buy a new car again.”

Possibly, but the key, of course,

is that our hunger for financial freedom,

and our commitment to that goal

must be stronger than our addiction

to debt-funded impulse buying.

This is obviously just a hypothetical example.

The details in each of our lives are different,

but the crucial thing is the attitude

we bring to our stewardship.

And I will say, too, that God has an amazing way of honoring our heart intentions

when those intentions are in line with His truth.

The first time I taught this principle was in 1991.

At that time both Sandee and I

were working part-time jobs

in addition to my work with the church.

We had worked out a payment schedule on our house loan

that would have the house paid off

by the time Joni started college,

when we would then shift the house payment

toward college tuition.

Our required house payment was about $900.00

and we then added an additional $300.00 each month for principle reduction,

which for us, at the time, was a huge amount of money.

Each month I wrote a $300.00 check to the bank that we weren’t required to,

a check for which at the time

it seemed as if we received nothing in return.

We kept that up for about seven years

when unexpectedly

Sandee and I both lost

our part-time jobs

and within 30 days our income dropped

over $1000.00 a month.

But because we had been making

all of those principle reduction payments

we were able to refinance the balance owed on our house

and drop our payments from $1200.00

to $500.00.

If we had not been making those additional payments

our family would have been thrown into tremendous financial stress,

and possibly even lost our house,

as many in our nation today are losing theirs.

Of course in the process we also had to give up our plan of paying off the house

by the time Joni started college.

But then in the spring of Joni’s Senior year my parents sold their home

and in the process chose to make a substantial contribution toward Joni’s college costs.

We had one plan.

God had another.

God wants His children to know

true financial freedom.

There are lots of reasons not to follow

the principles offered to us by our Lord.

‟I don’t want a budget telling me what I can and can’t spend!”

‟I’ll never be able to get this sale price again.”

‟Maybe God doesn’t think I need a new boat.”

But for those of you who might be interested

I just want to say that God offers us

the high privilege

of true financial partnership with Him,

and He delights in showing Himself strong on behalf of those who are willing to trust His leadership.