Budgeting and Debt Reduction

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Budgeting and Debt Reduction

• Responsible Stewardship of
• Gods Great Gifts

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Personal Finance Workshops

• Budgeting and Debt Reduction
• Saving and Investing
• Personal Financial Management
• Stewardship
• Charitable Giving

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Our time today

• Consumer Trends
• The debt crisis
• Causes of debt
• Budgeting
• Budgeting and debt reduction tips

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Consumer Trends Today

• 10 years general prosperity up to Sept. 2008
• 70,000 full time jobs disappeared in Dec alone
• Canadians are awash in debt
• Canadian household debt at all-time high at 1
  trillion in 2006
• Interest on debt 1984 6 billion
• 2003 22 billion
• Average total household debt 127 of household
  income
• Savings 1980s 20.2 at highest point
  2005 1.2

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How has Debt gotten so out of control?

• Confusion between our needs and wants
• Driven by fear
• Generosity
• Circumstances beyond our control

Toronto Star Canadians starting to save cash,
shun debt Jan. 9/09
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Reversing the trend

• Recognize it is not how much you make
• Philosophy of all is a gift from God
• Trust in God that HE provides
• We cant take it with us
• Good stewardship

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Reversing the trend

• Live within our means use debt wisely
• Prioritize our life decisions
• Limit borrowing to appreciating assets
• Understand risks
• Develop a financial plan and use a budget

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What is a Budget?

• Budget Spending plan
• It helps you
• see where money comes from and where it goes
• communicate with loved ones
• set and achieve your goals
• take advantage of opportunities
• be a good steward of Gods great gifts

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Budgeting Myths

• Budgeting is painful
• You only need to budget if you are in financial
  crisis
• Budgeting requires long hours and lots of
  paperwork
• Source http//www.tuliptreepress.com/myths.htm

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The Three Steps of Budgeting

• List available monthly income
• List monthly expenses
• Compare income vs expenses

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Tracking is key
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Budget Example
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Some budgeting tips

• Jar principle
• Use credit cards with caution - freezer
• Pay mortgage bi-weekly and pay more towards the
  principal
• Car pool/eliminate 1 car
• Pack a lunch
• Start cooking/plan meals
• Buy bulk

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Debt Elimination Worksheet Conventional
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Debt Elimination Worksheet Snowball Effect
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Make the Commitment

• To yourself, in Gods presence
• As a family state your goals
• Consult a trusted advisor
• Create a plan a commitment to action

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What the Bible says about debt

• The rich rule over the poor, the borrower is
  servant to the lender
• Proverbs 227

You are bought at a price, do not become slaves
of men 1 Corinthians 723
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Questions?

• If you have any questions or want to start the
  process of getting your financial house in order
  consider FaithLife Financial
• Want to know more.
• www.faithlifefinancial.ca