Debt Archives - Page 41 of 44

Sin Debt and the Payment For Sin

04.16.2009 by Matt Jabs //

Since we are always talking about debt and the repayment thereof, I would like to spend a little time today discussing the debt our sin creates, if that debt can be paid, and more importantly how that debt can be paid.

Whether you are a Christian or not history shows that a man named Jesus of Nazareth lived and died around year zero. History also shows that Jesus was a great prophet who performed many miracles, has many faithful followers, and did indeed disappear from the tomb on the 3rd day after His death (Happy belated Easter).

Let us now examine His life, His death, and this notion that He died as payment for our sin debt.

The Debt Owed

In the Old Testament Eve was tempted by the serpent into eating from the tree of knowledge of good and evil. Eve ate of the tree, then gave to Adam to eat and sin occurred. Sin occurred because God had told Adam he could eat of all trees except the tree of knowledge of good and evil (Genesis 2:16-17). The disobedience of Adam & Eve was sin. Sin caused the fall of man and created separation between man and God.

This establishes that even one sin in the life of any man will cause him to become separated from God. This separation exists because God is Holy and cannot have fellowship in the presence of sin. Thus our fellowship with God is broken and the separation is created. The bible rightfully states that all have sinned. Let’s take a moment to consider our own lives, examine our own sin, and understand that according to the bible we are all indeed separated from God because of our sin. That separation caused by sin is the debt owed.

Following the fall of man through sin, the Old Testament delivers a clear message that a blood sacrifice is needed for the atonement of sin and for the reconciliation of man to God. This is why the Jewish people practiced animal sacrifice in their temple.

The Foreshadowing of Payment

Since God requires a blood sacrifice for the atonement of sin, He instituted the rituals of animal sacrifice through the law He delivered to Moses. Does the blood of animals cover the sin of man? Simply put, no, it does not. The rituals of animal sacrifice The Lord instituted through the law of Moses were only meant to be a picture of the necessary sacrifice yet to come. That necessary sacrifice was the blood sacrifice of a man. However, since God cannot accept the blood sacrifice of a man who has sinned even once, therein lies the problem that no son of Adam can bridge this gap between man and God.

Enter Jesus of Nazareth.

Who Can Make Payment?

As told by the Holy Bible, Jesus had no human father but His Father is the Spirit of God Himself as told in Luke 1:34-35:

“Then said Mary unto the angel, How shall this be, seeing I know not a man? And the angel answered and said unto her, The Holy Ghost shall come upon thee, and the power of the Highest shall overshadow thee: therefore also that holy thing which shall be born of thee shall be called the Son of God.”

Jesus existed long before He was born of Mary, in fact the bible says that He has always existed. He was simply incarnated when He was born of Mary. Jesus is then both God and human. His Father is God Almighty, and His mother is Mary; because Jesus had no earthly father He is not of the seed or race of Adam, but is still a man because He was born of a woman. Jesus then is of the race of God the Father, making it possible for Him to live life without sin. The Godly heritage of Jesus is what makes Him the only one whose blood can atone for the sin of man.

The animal sacrifice introduced in the law of the Old Testament was always a picture (a foreshadowing) of how Jesus would come to this earth, would bleed, and would die as a sacrifice for the sin of all mankind. Jesus is the Lamb of God that taketh away the sin of the world.

The Payment Itself

The most amazing part of the bible, and the part that causes men to flock to Christ once their eyes are open to the sheer depth & breadth of what He accomplished, is His willing & sacrificial, though brutal death.

The scripture & law exist to show us our need for atonement and reconciliation to God. The more we read the bible, the more we will see how far we fall short of the glory of God. However, the good news is that we can be justified freely by his grace through the redemption that is in Christ Jesus

Jesus of Nazareth is indeed Jesus the Christ. He came to this earth and sacrificially gave His life as an atonement for our sin that we may be reconciled to God. Jesus paid the ultimate price for sin when He willingly laid down His life for the sin debt!

That is the good news my friend!

Our Leadership Example

Today we will define true leadership as “the process of social influence in which one person is able to enlist the aid and support of others in the accomplishment of a common task”, and to further define leadership Alan Keith of Genentech said “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.”

In death Jesus showed us how to lead. Consider the type of leader you would follow. I would wager to say you would most passionately follow someone who was willing to die for your common cause. What is your cause? What is your purpose in life? What will people say about you after your life is over?

What About You?

What do you want people to say about you after you die? If you died today, would people say what you want them to say? If not, then use this information as an excuse to reevaluate your purpose in life. Consider your end and come up with a few ultimate goals that you want to accomplish before your life is over, then break those goals down into achievable chunks and pursue them and be willing to die for them!

My goals in life and the things I want said about me long after this life are these:

Matt Jabs loved the Lord his God with all his heart, and with all his soul, and with all his mind.
Matt Jabs loved his neighbor as himself.
Matt Jabs was passionate about helping others love God.

I have broken that down into the following attainable tasks:

Use my God given gifts to introduce and expound the glorious gospel of Christ to as many as possible
Help others become debt free using biblical principles
Help churches & bible non-profits develop a strong web outreach ministry

What are your goals in life? How do you plan to use your gifts to accomplish your goals?

DFA exists to help you become debt free. If there is something you like or dislike; something you would like to see more of or less of, no matter how trivial it may seem to you, please let us know. The best way for us to improve for your liking is to hear it straight from the horse’s mouth. If you have been reading but have never commented, I encourage you to do so now.

Interest Amount Paid – Establish a Proper Relationship with Your Debt

04.15.2009 by Matt Jabs //

Your Debt Costs You More Than You Know

If you want to take a truly sobering look at just how much your debt really costs you, follow this simple guide to figure out what your monthly interest amount paid is. Once you complete the exercise you will have finally developed a proper relationship between you & your debt!

This article will address the following:

What is interest & how destructive is it
How much interest I pay out each month
How I calculated that amount
The anger I gained toward my debt after completing this exercise
The incredible motivation this information gives you
Real steps we can take to lower, reduce, & eventually eliminate the interest we pay

What is Interest & How Destructive is it?

While there are several definitions of “interest”, for the purpose of this article we focus on the interest amount paid toward our debts and will define interest as a fee paid on borrowed assets; and/or the price paid for the use of borrowed money.

Simply put, interest destroys your ability to build wealth by taking your hard earned money and misappropriating it toward paying rich people (the people who loaned you the money.) I will demonstrate this fact by listing my interest amount paid from last month (March of 2009).

How Much Interest I Pay Each Month

Please note that I will have to pay these amounts each & every month until I eliminate the associated debts. However, on the bright side, the amounts will lower each month as I lower the principle debt amounts.

Mortgage 1 (80%) – $592
Mortgage 2 (20%) – $296
Student loan 1 – $165
Student loan 2 – $120
Auto payment – $52
Credit card 1 – $30
Credit card 2 – $19
Credit card 3 – $11
Credit card 4 – $8
- Total interest amount paid for March 2009 – $1,293

Let it be stated that this is approximately 20% of our gross family income (amount after taxes). A convincing explanation of how this interest amount paid greatly hinders our ability to save and become financially free is simply not necessary; the numbers speak for themselves.

How I Arrived at the Above Amounts

Follow these simple steps to find out your monthly interest amount paid:

Write down a list of all your loan amounts including your mortgages, student loans, auto loans, credit cards, etc.
Either look at the statement each account mailed you last month, or log into their associated web sites to find the amount of interest (a.k.a. finance charge) you paid over the past month.
Write down the numbers you find above next to the associated accounts
Calculate your very own monthly interest amount paid.

After completing the above steps, you will most likely be filled with anger! I was.

The Anger I Gained Toward My Debt

Before I completed this exercise I was certainly angry about the amount of debt I had, but now that it has been so plainly laid out in front of me I have entered into an entirely new realm of DEBT HATRED!

Similar to how the bible teaches us to HATE SIN, I am learning more & more to have a righteous hatred toward my debt. It gives new meaning to Proverbs 22:7, “The rich ruleth over the poor, and the borrower is servant to the lender.”

It is important that we use this information as motivation to push us into a much more passionate, much more driven, much more functional stratum of debt repayment & elimination.

How to Channel Your Anger Into Motivation

This step is simple but crucial. You must not allow yourself to slip into the trap of becoming overwhelmed. You must realize that you are the only one who can turn this around. You must stand up and fight. You must take control of your own financial destiny and your own financial freedom!

Consider, meditate, and memorize this quote and use it as a daily battle cry against your debt: “A journey of a thousand miles begins with a single step.” ~ Lao Tzu

Solidify in your mind the realization that you got yourself into this mess & just the same you are the only one who can get yourself out. Now stand up and take responsibility for your own actions and commit to establish a new financial mission of debt free living. A mission that will change your existing relationship with your creditors. A mission that will enable you to take control of your own financial situation. A mission that will allow you to finally begin building your own wealth with the money you have long been squandering on interest and debt. A mission strongly fortified with direction and goals.

Real Steps to Reduce, Lower, and Eliminate Interest & Debt

I would like to start this section by happily reporting that Credit Card 4 from above was eliminated with this past months payment! That means that I will now be paying $8 less interest every month, and when I add in the reduction of principle of the other debts, that number actually grows to $12.

By using a focused, goal oriented approach, in one month I was able to lower my monthly interest amount paid by $12. I will use this amount as motivation and will keep track of how much I reduce my interest amount paid each month. You should do the same.

Hold on to the list you formulated above.
Call each creditor & attempt to get your interest rate lowered. This can give you a HUGE jump start in lowering that initial amount. DO NOT skip this step!
Each & every month record the interest amount paid for each debt.
Calculate your total interest amount paid every month.
Track your progress by listing your lowered amounts.
Place these monthly amounts somewhere you can see them every day, like your refrigerator.
Balance your focus by paying off both small debts & high interest debts. I use both of the following methods in tandom:
- The Dave Ramsey snowball method of paying off small debts first to motivate yourself & see entire debts eliminated
- Focusing on the highest interest debts – doing so will be the fastest way to lower your interest amount paid
Some would say reward yourself once a month by treating yourself to something you want, but for me the lowered amount of interest I’m paying is reward enough. Use what works for you.

The more we eliminate our interest amount paid each month, the more we can use toward paying ourselves. This disciplined approach, if properly employed, enables us to begin building wealth and will help guide us down the road toward our ultimate goal of FINANCIAL FREEDOM.

Help When Overwhelmed by Personal Finances – DFA Tip of the Week – 4/13/2009

04.13.2009 by Matt Jabs //

There are many ways to reduce costs in our every day lives, so to help do just that each Monday I will post a money saving “Tip of the Week”.

“And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities.” Luke 19:17

This weeks tip involves…Getting Started. I want you to consider the following quote, then read the rest of this article. By the end you should be well equipped to get started on your very own Debt Free Adventure!

“A journey of a thousand miles begins with a single step!” ~Lao Tzu

The Trap…

All of this Personal Finance business can be overwhelming! Debt repayment vs. Reduce Monthly Bills vs. Saving & Investing, etc. While all of these topics require your necessary attention, it is important that you do not focus on everything all at once. You need to start somewhere, so here are a few tricks you can employ to get yourself started without falling into the trap of idleness.

Tips to Avoid the Trap…

To get your finances in order break them down into the 3 following main groups:

Debt Repayment – Make a simple list of all the “consumer debt” you have including auto loans, credit cards, department store cards, student loans. Write down each debt, how much you pay toward it each month, and then add the debt of each up to come up with your total debt amount.
Monthly Expenses – Write down all your monthly bills and how much each costs you per month (if amounts vary, come up with a guesstimate average).
Savings and/or Investment Accounts – Make a list of all your savings accounts and investment accounts and write down how much you contribute toward each.

Once you have the above completed you are REALLY CLOSE to having created your very own budget! That is the next step…finish these steps to complete your budget:

Write down your monthly income – Do not budget weekly, bi-weekly, or any other way…budget monthly. Write down how much monthly income you have from all sources.
Write down all outgoing expenses – In a 2nd section, copy the information you compiled above regarding your monthly debt & expense costs and jot them all down and subtract them all from your income.
Add any other expenses – You may have forgotten to write down groceries, gasoline, etc. Figure any other expenses you have each month and add them to your “outgoing expenses” section to arrive at the total amount you spend each month.

Now that you have your first rough draft budget done, go celebrate by eating a cookie, dancing the jig, or doing anything else to express the joy you feel that comes from getting started on the path toward financial freedom! When you are done dancing and eating dessert, look over you budget one last time to make sure you didn’t forget anything. Ask your spouse to proof-read it as an additional check to see if you have left anything out.

Now commit to the following…

Now that you have your budget, you have your expenses, debt, income, & savings all written down and can start to wrangle everything in. Commit to the following:

Give 10% to the Lord – Read my Testimony to the Tithe and see how the Lord promises to bless you if you give, but also promises your indebtedness will continue if you do not.
Contribute any amount to savings automatically – Transfer any amount, no matter how small, into your savings each month. Even if it is just $20/month, make a promise to yourself that you will pay yourself that $20 instead of paying it in interest to some big bank. Try to make this an automatic thing. I HIGHLY recommend switching your banking to Capital One 360 to make all this easier. Read about how I use Capital One 360 for debt repayment and emergency fund savings…and remember…this is all spoken from personal experience!
Reduce your monthly expenses – follow my advice and work to reduce each of your monthly expenses, but do so one at a time. Commit to calling one service provider a week to see about either switching, reducing your plan, or discontinuing that service altogether if possible.
Tweak your budget – Your budget is a “living document” and should be given attention on a weekly basis. Think about how you can reallocate your money after you reduce your monthly bills as we discussed above. Continue to contribute more and more toward your debt repayment, and I advise you to focus the majority of your funds on this until your debt is greatly reduced. Once your debt is considerably lower, begin contributing more toward your savings each month. I currently employ a 75/25 plan where 75% of my available funds go toward debt repayment and 25% go toward savings. Do what works for you, but again…I urge you to focus the majority on debt repayment!

Follow these simple steps to get started and remember to break tasks into their respective groups and tackle things one at a time.

Memorize the following quote:

“A journey of a thousand miles begins with a single step!” ~Lao Tzu

Click here to see all our past DFA Tips of the Week.