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: