Debt: dangers in trying to escape...

Having said early on in this series that I would not be telling anyone what to do, I will now say this to anyone who has a store card - If you would like to bring it to me I will cut it up for you. They are nuts! You are paying 28% to 30% interest on any balances owed on those cards – that’s madness! Such easy credit can lead you into trouble – you need to know yourself and your own level of self-control. Some people make this self-assessment and decide to have only a debit card and then only spend what they have in the bank.


To get out of debt and reduce your expenditure by £100 a month is really going to bite. But in order to pay off your debts, though you have cut back, clearing it can take longer than you think. A plan is essential – ask someone who is experienced and trustworthy to sit down with you to help you put a plan together if you are in that situation. You will have to make some tough choices – generally you will either need to make some more income or you will have to cut back on your spending - or maybe both!

My experience in handling money is that to do so at all well takes time. It takes more time than you think. I would advise that each week you set aside time to deal with your finances. So - in any week, when is your money moment? Sometimes you might need to set aside two hours, other times it could be less. But the important thing is - do not leave things to accumulate. Deal with bills, bank statements or financial matters in the moment otherwise they will build up and will cause you unnecessary worry.

This series is based on the content of the annual Stewardship seminar from King's

The danger of debt...

We have to consider the dangers of debt. For some this is a painful reminder of reality and how difficult it can be to get out of debt because it has to be paid for. If you don’t step in quickly, debt can spiral, so it’s important to open your eyes, take responsibility and plan to get out of debt.

Monthly income - £1580. Monthly expenditure - £1650. Overspend - £70. When I moved from my big salary to a small salary I found that because there are amounts going out all the time it is difficult to know exactly where you are at any point in the month. You can be overspending and not realise for a couple of months if you don’t keep a close eye on things. Let say this pattern carried on for 6 months. At the end of each month you realise the monthly trend but it is steadily going the wrong way - and at this point it starts to touch our emotions because making tough choices to not buy things starts to impact us – and family members. Without clear action, six months later it would be possible to be around £400 in debt. We have had people in our church who have been thousands in debt, some to the tune of tens of thousands, so this example is not unrealistic.

If you are in debt, at this point it is time to decide that you want to do something about it. You don’t want to live like this anymore, but if you have been paying for items on your credit card you now have to pay interest on that debt. By the way, the credit card is the worst way to manage debt because of the high rates of interest that are charged. The cheapest way is to get a bank loan - if it’s possible - or transfer to a 0% rate credit card company who are keen to have your business, and then ensure that you pay off the debt in the relevant period. Otherwise you will be paying somewhere around % for your debt on a credit card. And you need to be paying more than the minimum monthly payment in order to make clear inroads into the actual debt.

This series is based on the content of the annual Stewardship seminar from King's

Budgeting...

Let’s consider budgeting. There are different ways to do this but this is how I do it. (I am amazed at just how many people don’t do it at all, so this approach will be basic!) I use a spread sheet on the computer and before such devices came along I used a calculator and a pencil and paper! Either works!


You need to write down all your income and expenditure – the first mistake that most people make is not to do that! By not tracking everything you won’t know where you are financially, so write down everything that you spend so you really do know what your income and your expenditure is each month. Note - not what you think you spend, but what you actually spend. Most people are good at this to a certain degree – but when you get down to the fine detail, that’s another matter. It’s the 20% that you don’t record that’s the problem and will continuously take you into the red – these are normally not your set costs, not the regular payments that go out each month but those day-to-day spending decisions. That Starbucks that you buy each day...

Most of my income is spoken for. I receive my salary from the church – it comes in to our bank account and then monthly commitments go out. Most people ‘back plan’, (that’s recording everything as you spend) few ‘forward plan’ and decide ‘I have this amount to spend on that area – and only that amount’! Christmas can then come as a bit of a shock - and rather than having planned for it, they decide to have a ‘good’ Christmas and then pay off the debts afterwards. Rather than thinking ahead earlier in the year and making provision for Christmas shopping by setting an amount aside each month throughout the whole year they plough on into debt. The same principles would apply to financing our eldest son going to university – I thought ahead and planned financially more than a year ago rather than crashing into the harsh reality! Financially I have a monthly plan, an annual plan and a 5 year plan. Then there’s my 25-year plan. I do this because I am aware that the decisions I make today impact what will happen in the future.

Reconciling your bank statement with your recorded expenditure is important – to regularly check what is actually in the account and see if spending is on track. And if the bank has made an error (it does happen!) – the earlier you raise the issue with them, the better!

Content taken from King's Stewardship Seminar...

Take responsibility!

When we look at personal finances there is a general principle from the Bible that if you are able, you are expected to work – I would suggest that is assumed in the story we read from Matthew 25. The responsibility is yours and no-one else’s and balancing the books at the end of the month or the end of the year is also your responsibility.


We have to recognise that it is possible to go through some life challenges that make managing money a really difficult thing to do – unemployment among other things – so I am not unaware of the real pressures that some of us face. In the current economic climate there are difficult decisions to be made for those who have been made redundant. Church leaders would want to be there to give pastoral support through that time and advise on priorities. But in the end it is each person’s responsibility before God as to the decisions made and actions followed, both with talents and money.

As in most churches, among King’s people there will be a whole range of very differing personal circumstances. Some may be in debt, some may be on benefits, some may be earning over £50,000. Some will be single, some might be students, some might have four children, and we recognise that there are differing ages and stages of life that make greater financial demands. I have three sons and in recent years my wife has been able to return to work but we have one son at university and investing in his future is costing me an arm and a leg! I am in that season. Furthermore, I am also in that season where my pension is becoming more important to me – much more than it was in my 20s. My advice is that you should prepare in your 20s for your future.

Content taken from King's Stewardship Seminar...

Don't be an ostrich!

Many people are not familiar with handling money. They get overwhelmed by it and when problems start to loom, like the final servant in the parable of the talents in Matthew 25, they then put their head in the sand! I want to challenge that ineffective approach.


Many others handle money well already but are interested in picking up some tips to do even better and maybe get a greater return. Among those who attend King’s we have people from all sorts of work settings including some in the financial industry. Over the entire church there will be differing skill sets and levels of financial ability – for some the whole thing is a bit of a blur, for others it is all too clear. And we have among us single parents trying to make ends meet – different personal circumstances give us particular insights.

When it comes to stewardship some people feel threatened by money and just avoid the issue and hope it will go away. Of course, it doesn’t! Denial sets in – this is a massive issue in respect to problems with money, the consequence of denial is that it results in people becoming fearful about finance and they are then vulnerable to falling into a snare.

At King’s we work on the principle of choice – I will not give advice on how anyone should spend their money. There will be no comment on how big their house should be and whether they have one or more of them. In a church like King’s we have a huge cross-section of people, including one person who owns ten properties. We are not looking at forcing equality of ownership. Some people like to spend lots of money on a car, others on holidays, and others on private education. Some of us like to have insurance, while yet others don’t think it is appropriate for a Christian. Everyone has a choice on how to spend the money they have earned.

Content taken from the King's Stewardship Seminar...