Ed Bahler’s Blog…To Enhance Ministry

Maybe we shouldn’t be so quick to blame those guys on Wall Street for all of our financial problems. Take a look at these debt statistics for Americans. (Each is inflation-adjusted to 2007 dollars and the total debt includes personal, government & business)

• Our total debt last year was $53 Trillion compared to $4.8 Trillion in 1957. Our debt per person was $175,154 compared to $29,722 back then.
• 85% of today’s domestic debt has been created since 1990.
• Students are graduating with an average of $19,400 in student loans – a 58% increase since 1993.

Imagine the Kingdom work that we could be doing if we weren’t saddled with this massive weight! Of course there is a certain amount of debt that is an inevitable part of most people’s lives. How do you know when to go for it? For starters, check out these helpful tips.

5 dumb ways to get in over your head:

1.) Cash advances on credit cards

Most credit card cash advances carry an up front fee and a higher interest rate. Interest starts accumulating from the second you borrow the money.

The solution: Use an ATM. An ATM is free as long as it is operated by your bank.

2.) Payday loans and tax refund anticipation loans

Frequently pitched as a quick way to get access to your tax refund, they are roughly equivalent to a payday loan in terms of hidden fees and an APR of up to 200%.

The solution: Patience! If you absolutely have to have money, use a credit card.

3.) Rent-to-own Furniture and Appliances

Rent-to-own is not a good route to take because it ultimately results in a cost that is two to five times the department store price. People will see that a couch is only $49 a month but don’t do the math.

The solution: Save up and purchase the item from a store or buy used furniture that can be found easily via the Internet on Web sites like craigslist.

4.) Buying a new car

By buying a new car you pay twice for the asset, first with interest and then again for depreciation when you sell.

The solution: Buy a 3-4 year old car that’s 50% to 60% less expensive. With vehicle history reports, you’ll know exactly what the car has been through.

5.) Taking out 401(k) loans or making early withdrawals

Loans and withdrawals against your 401(k) often carry high fees and must have a definite repayment plan.

The solution: Keep a rainy day fund. If you must take out a loan, make sure it’s for a home or property that will appreciate.

How do you feel about our debt statistics? And What responsibility do we and the church have in mentoring the next generation to live within their means?

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