Summary: Part 3 of the series Getting a Grip on My Finances focuses on warning signs over overextending one’s finances.

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A recent government report with a boatload of statistics reveals people owe for a lot of big things other than houses.

These debts all need to be repaid, and meanwhile finance companies are pulling in a lot of interest payments from the loans, which total well over a trillion dollars.

Of course, we had seven years of prosperity since the last recession, so there’s no doubt that all debts will be settled, right? But last year set a record for the number of personal bankruptcies filed! This year may break that record.

So what do these statistics say to you?


In the American religion of materialism, there are two words more sacred than any other: "Charge it!" Yet, consider the following two scenarios in evaluating the intelligence of using plastic:

1. Ellin is 30 years old. She has a $3,500 balance on her Citibank credit card at 18% interest. She makes the minimum payment each month. How old will she be when she has her credit card paid off? [70 years old]

2. Susan and Tom needed a new washing machine, so they went to Sears and found one for $299. They got a Sears charge card and made the minimum payment each month. By the time the washing machine was paid off, how much did Susan and Tom actually pay for that washing machine? [$1,199]

Debt has become as American as apple pie.

According to one bank’s research of 1996 applicants for home loans, they found that:

· 90 % of applicants had a minimum of 4 credit cards

· 3 of the 4 cards were at the maximum allowable limit

· 82 % of the applicants had 2 car payments; the average payment was $326 for 48 months

· 70% of all applicants showed some late payments on their credit reports

· When faced with the decision to keep a new car or sell it in order to qualify for a home loan, 50% of young adult 1st time home buyers chose to keep the car and continue renting

· and 32% of the young adults applying had overdrawn their checking account less than 90 days prior to the date of application

(source: Bob Russell, preaching minister at the SouthEast Christian Church in Louisville, KY)

It reminds me of the true story a meat store owner told some time back:

The owner said: “one day a customer informed me she had gotten some unexpected money and wanted to fill her freezer. She picked out about $200 worth of meat and handed me her credit card."

Laughing, the owner said: "I thought you got some unexpected money."

"I did," she replied. "They raised the limit on my credit card."

We live in a culture based on instant gratification. Buy now – pay later. Of course, this causes enormous problems not only in culture but also in our individual families and lives. Consumer debt in America now stands at trillions of dollars. That’s not what the government owes. That’s what you and I owe.

So today I’m continuing the series “Getting a Grip on My Finances”. I want us to look at the warning signs of entering the debt zone.


The debt zone is a trap because it enslaves you. When you go in debt, you loose your freedom. The Bible tells us in Proverbs 22:7 “The borrower is the servant to the lender.” Any time you take a loan, any time you go in debt to someone or some company, you are, in a sense, becoming a servant to them because you’re obligated to those people. It becomes a very major trap that many people can never get out of.


Here is a stack of the credit card and loan applications that I received in the mail just this week. Each of them has some specific way of trying to entice me to apply for their card. [give examples of some of them]

Whenever you read one of these ads, there’s one word you’ll never find in any credit application or credit advertisement. It a word that we don’t like in credit ads. It’s the word “debt”.


In Roget’s Thesaurus: Here are the synonyms for debt:


o to owe,

o to be obligated,

o liable,

o in deficit,

o in default

o insolvent,

o encumbered

o in over one’s head

o tied up

o out of pocket


o in arrears,

o indigent

o paupered

o destitute,

o penniless

o needy,

o lacking

o distressed

o in difficulty,

o a deadbeat


o having a wolf at your door,

o living hand to mouth

o beggarly,

o emptied

o having seen better days,

o gone to the dogs

o racked and ruined,

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