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World Bank chief warns of financial crisis World Bank chief Robert Zoellick on Saturday warned of a "new and more dangerous" time in the global economy...
US Recession Risks Rises The threat of a new recession is rising in the United States, economists say, as they slash their ..
Unsafe US debt remains safe haven US Treasury bonds remain a hot ticket for investors looking for a low risk investment in a volatile market despite the unprecedented ...
US borrowing tops 100% of GDP US DEBT shot up US$238 billion (S$287.2 billion) to reach 100 per cent of gross domestic project after the government's debt ceiling was lifted
Consumers consumed by debt The average consumer may feel far removed from the heated debates concerning the $14.3 trillion debt ceiling. But the truth is...
Financial Crisis II. Get out of debt now There is increasing talk among traders and financial analysts that the latest slump in global share markets
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Tax for dinner, Debt for breakfast.


Scriptural Financial Freedom Obtaining God's blessings






Tax for dinner, Debt for breakfast.

Finance can be such a thriller. Action-packed and full of bills. Money makes the world go round. And even with that, the world is not enough. Money has become the agent of change. "M" (for money) is now your boss.

The average consumer may feel far removed from the unrealistic world of the media. But the truth is, American households are dealing with plenty of their own action, and the issues weighing down the economy are similar to those facing consumers like you.

According to Federal Reserve data, total household debt in the nation at the end of 2010 amounted to about $13.4 trillion, which means consumers owe almost as much as the federal government. The conclusion to be drawn is the U.S. population (as well as the government), is addicted to debt.


Unlike the US Government (who collects your tax dollars), credit card companies and other lenders are not inclined to solve consumer overspending by raising the credit limit. While some card issuers may raise limits in some cases for their best customers, most will simply cancel the card or close the account and demand full payment.

Compounded interest on your credit card debt are always working against you. Logically, living with high debt can create a cash poor situation. Unfortunately, debt and lifestyle go hand in hand in American society. When you use debt to fund a consumptive lifestyle, not only do you have the consumptive lifestyle working against you financially, but you also have the additional burden of debt working against you financially. Both should be avoided like the plague!

Avoiding the use of debt is incredibly difficult because the promotion of credit card use has made any household item so easy to obtain and the temptation to use credit or debt so overwhelmingly difficult to resist. Credit card companies are spending hundreds of billions of dollars to entice each of us to spend and to use credit with cards that make spending "easier", and those amounts are a pittance when compared to additional advertising dollars of retailers.

Keeping your debt burden as light and as cheap as possible is the key to a more secure financial freedom. Are borrowed money a good investment. Almost never. Currency may or may not increase in value, but inflation and interest, borrowed money is hardly a good choice. If you have to repay your credit interest, then certainly not.

Likewise, debt on a house should be paid off as fast as possible, because that amount of interest you’re paying over time is huge. If you paid only your minimum payment for the 30 years on your mortgage, you'll pay twice as much as that loan just in interest!

If you buy a big house with so large a mortgage payment that you don’t have any money left over for other expenses you are also cash-poor. The house might appreciate more than a smaller house but all that money tied up in a non liquid asset doesn’t help you pay the doctor bills.

But having said that, let's come back again to consumer debt. For most people, when it comes to consumer spending and when emotion and logic are at odds, emotion usually wins. You will always feel the urge to buy on impulse. Maybe it’s on sale, maybe you think there won’t be any later, or maybe you’ve just convinced yourself that it’s a super smart purchase. Awful, isn’t it? And that's why it is practical to have a controlled shopping list. Buy only what you need, and make sure that when the credit card bill arrives, you can pay it off in full.



Remember, credit card companies charge a high interest rate (between 18% to 24% interest) on all those purchases if its not repaid immediately.


Today's Bottom Line

According to a banker in the banking industry, a person who uses his or her credit card for convenience sake and pays the debt off each month is known as a "deadbeat".

The Bible does show many ways to overcome any financial crisis. Many of these principles are laid out in our successful course, the Scriptural Financial Freedom series. To learn more, you can download the Small Groups kit from our estore.

Calculate your mortgage, credit card repayment, loan interest as well as your compounding interest and more with our 25 calculators!

This article is from financial articles

Financial Freedom Tips & Toolbox

Today's Pick: The dangers of Debt The Dangers of Debt by [Stacy Johnson]



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