Friday, April 23, 2010

Thursday, April 15, 2010


We recently watched some Dave Ramsey DVDs in our small groups about being wise with money.  I was surprised at how much he incorporates the Bible into his strategies.  He frequently references Proverbs with passages like, "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has," and "Dishonest money dwindles away, but he who gathers money little by little makes it grow." 

One Proverb he referred to stuck out to me was Proverbs 22:7 - "The rich rules over the poor, and the borrower is the slave of the lender." This caught my attention because it clearly shows the spiritual nature behind borrowing money. Dave went on to say that when someone borrows money, the person/organization that lent the money becomes master over the borrower.  That is why, if someone borrows from a friend or relative, the relationship tends to become awkward, even if the borrower is paying back the loan.  I think the analogy only goes so far; a lender doesn't have ultimate control over your life, but I thought it was an interesting parallel.

Another thing I liked was his debt snowball plan.  It didn't seem to make much sense at first, but the more I look at it, the more it does make sense.  In a nutshell, you pay off your smallest debts first, then use the money from the first debt to pay off the second (plus the extra), and so on.  You do end up with a large payment towards the end, but the increase has been gradual and each debt paid off is a small victory.

We have a couple in our group that were deep in credit card debt and weren't bringing in much money. They found the debt snowball plan, started using it, and now, just a few years later, they're just about free.  They also told us they were able to get several of their credit card companies to settle for less than they owed, which made a huge difference.

It seems to me that getting out of debt is kind of becoming a trend.  Since the 30s, each generation, as a whole, has gradually borrowed more and more money.  And now, I think the debt trend has reached its breaking point.  If our economy holds, we will begin to see a downturn in the number of people who are in over their heads. That's only my opinion, I wouldn't suggest taking it to the bank... Cool picture huh?

    Saturday, April 10, 2010