Posts Tagged ‘debt’

Deuteronomy 24:10-15

Treating the Poor & Needy with Dignity

How close are you to being on the street? Some are closer than others but we all could be there in short order. Some of us having savings that will last us a period of time. Some of us do not. All it takes is the loss of your job or an extended illness that consumes your money like it does your body.

 

According to research that was mentioned in an article that I read at the Huffington Post website, over ¾ of Americans have less than six month’s worth of savings (i.e., enough in savings to pay their bills for six months). About ¼ of Americans have no savings at all. The article also said that even though we are now about six years beyond the end of the deepest recession since the 1930’s and people began to see the necessity of savings, not much has changed in America’s savings habits since then. There has been little change in the level of savings by Americans. Look at your take home pay the next time you get paid. Say for example if you get paid twice a month like me, take that take-home pay amount and multiply it by 12 (the number of bi-monthly pay periods in 6 months). If you get paid monthly, that multiplier is 6, of course. If you get paid bi-weekly, that multiplier is 13. If you get paid weekly, that multiplier is 26. Family financial advisors recommend that you have six months worth of savings built up at all times so that you can survive a temporary job loss or survive a temporary medical condition that causes you to be unable to work. You know your bills. They keep coming relentlessly. It is almost a certainty that each one of us will suffer a job loss on at least one occasion during our working careers. The typical American worker will suffer at least two job losses during his working career. In a recent research study, the typical American worker when unemployed will be out of work for at least 10 weeks. Other research also shows that the typical American worker will most likely accept a job making less than they were making before their job loss. Think about that. It is a statistical certainty that we will lose our job at some point in our working years. On average, when we do lose our job, we will be out of work for 10 weeks in the best of economic times. In the most recent recession that average job loss period skyrocketed to 22 weeks. And, then, to top it all off, when you finally do find a job, it is also a high statistical probability that you will accept a job making less money that you were making before you became unemployed. Think about that. We can no longer be blind to the facts. Do you want that boat that you may use 20 times in a year, if that, or do you need to build up your savings. Our economy and our culture is built on credit and buying things rather than saving. But we must resist the culture here.

 

If we have another deep recession like the one from 2008-2011, you and I could easily be on the street in short order. Average unemployment duration during that recession was 22 weeks. Some people were out of work much longer than that during the Great Recession. During that time, I knew people who had been out of work for as much as a year. Can you and I survive that? Sadly, though, I pride myself for the place that I have gotten from a financial stability standpoint, I still have a ways to go when it comes to an emergency fund. Based on what I take home each pay period, I have built up savings for about 3 months worth of take home pay. Since Elena and I have purposely been on a mission for the last few years to reduce our expenses, when I look at it from an expense perspective (eliminating tithes, contributions, and other spending that would go away if unemployed), I think we could make it maybe 4.5 or 5 months without income. However, if a job loss lasted longer than that, we would be in trouble. How ‘bout you?

 

How close are you to being on the street? It is like the gorilla in the room that nobody wants to talk about. We all see the gorilla but if we ignore it maybe it will go away. Guess what? The gorilla never goes away. It’s there. It will always be there. What are you and your spouse, if married, doing to ensure that you can survive a loss of a job and reduced income after re-employment. How important is it to have that fancy vacation every year? How important is it to have that house is above the recommended percentage of your gross salary (investment counselors recommend no more than 25% of our gross income should go toward a house payment)? How important is it to have that big fine car with its big fine car payment? Savings is not sexy but essential. Savings can be sexy if you let it be. Setting savings goals and creating margin in our budgets to do so and achieving our goals for savings can be sexy! It will be very sexy to you when you lose your job. How close are you to being on the street?

 

When I read today’s passage about treatment of the poor and needy just impressed upon me how close each one of us is from being that guy on a street corner with the sign, “will work for food!” and how that compares to our view of the man that is already there. Let’s read Deuteronomy 24:10-15 together now:

 

10 When you make a loan of any kind to your neighbor, do not go into their house to get what is offered to you as a pledge. 11 Stay outside and let the neighbor to whom you are making the loan bring the pledge out to you. 12 If the neighbor is poor, do not go to sleep with their pledge in your possession. 13 Return their cloak by sunset so that your neighbor may sleep in it. Then they will thank you, and it will be regarded as a righteous act in the sight of the Lord your God.

 

14 Do not take advantage of a hired worker who is poor and needy, whether that worker is a fellow Israelite or a foreigner residing in one of your towns. 15 Pay them their wages each day before sunset, because they are poor and are counting on it. Otherwise they may cry to the Lord against you, and you will be guilty of sin.

 

Certainly, the Bible teaches us to honor the pledges that we make and that if we are a lender we certainly have the right to enforce debt agreements. However, God calls for mercy when a person is in our debt. We should not treat those who owe us money poorly. We should not take advantage of the poor in our employment practices either. Just because a person is poor and will do anything for money, we are not to take advantage. We are give the poor and needy the dignity that they deserve as children made in the image of our Creator. If we are all made in the image of God, that means that we have the dignity of a child of a king. We should not treat the poor and needy as something less than us or less than human.

 

How many times do you and I avoid the uncomfort of homeless people? How many times do you think, “you worthless bum! Get a job!” How many times do we really treat a homeless person with dignity? How many times will we ignore them? How many times will we think poorly of them as we walk past them? How many times do you look the other way as we pass a homeless shelter? How many times do you and I drive past a food pantry and roll our eyes up in our head as we see the long line of people that look like they have been wearing the same clothes for three days?

 

This is where I get back to my opening observations. How close are you and I to being on the street? How close are you and I to being that person at the food pantry looking like we haven’t changed clothes in 3 days? How close are you and I to being the “will work for food” guy on the street corner? Every homeless person has a back story. Not all homeless people are drug addicts and dope heads. Some are people that have been out of work for a while. You try being homeless for a while. It may well drive you to drinking or drugs. Think about how close you and I are to homelessness. It’s just an extended period of unemployment away my friend. If we want to avoid living on the street. We must begin saving. We must begin living beneath our means. We need to learn to live on less so that (1) we can be generous and (2) save for a rainy day.

 

Given the fact that any of us could be on the street in short order, maybe we, too, should consider giving the poor and needy more dignity than we do. It could be us. We should have no pride. We should be willing to help the poor and needy. Jesus called us to help the poor and needy, not feel prideful and disdainful. Just think of it as it could easily be me on the side of the road. It is a very real possibility and no matter how hard you work or how much you don’t want to be on the street, it could happen to you! Would you not want to be treated with dignity. You would not have planned to be on the street?

 

Amen and Amen.

 

Deuteronomy 24:5-7 (Part 3 of 4)

Miscellaneous Regulations

Sometimes, we want something so bad that we will do anything to get it. We used to do that as kids. We would trade away something that belonged to us to another kid who had something that we wanted more than anything. Then, we got what we wanted. Then, we longed for the things that we gave up. We realized that what we got for our trade deprived us of the things that we valued and gave us no greater happiness.

 

We are sometimes like that as adults. Are we not? I know for a fact from my own life. Now, due to being smarter with my money and less enamored with appearances, my financial situation is the best that it has ever been. However, it has not always been so. There was a time in my life when I wanted all that was new and flashy.

 

Fancy vacation homes on the beach would be the way that I used my tax refunds instead of paying off debt is an example. Now, for example, this year, I had to replace by old truck, finally, because it gave up its life when the engine finally blew. I had been without a car payment for five years but had to go in debt to replace it with a newer car, an SUV, back in November. In February when I got my tax refunds from the Fed and the state, instead of blowing it like I would have a decade or more ago, I paid off almost all of the debt on my Toyota 4-Runner. I still owe about 4 grand on it out the original 12 grand. The old me would have thought, why pay it off when you can’t pay it off in full.  That would have been my logic as to why I could go blow 8 grand something new and flashy.

 

In an earlier time in my life, after the bad credit disaster that was my second marriage, child support from my first marriage, and a second divorce, my credit rating was ugly. But I still wanted to keep up appearances. I was a single again. I wanted to look the part. Dodge made a vehicle, at that time, that would make me look the part. I wanted that vehicle and I let a high-pressure salesman at local car dealership in Greenville, SC play on those desires. My credit rating was so poor that no major bank would touch me. Only Chrysler Financial would at a high rate of interest. You know you want it. But man that payment’s too high. I love that car but I can’t afford a $646 a month car payment. You know you want it. No, I can’t afford it. You know you want it. We’ve been here for hours trying to figure out a way to get you in that car. You know you want it. Finally, against all common sense, I agreed. Over the next three years with all the obligations that I had (on a much lower salary that I have now), that SRT4 was pretty but it was such a great burden on me. That was no way to save with that burden. Ironically, a decade or more later after wise financial decisions and saving and being smart with money, when we downsized our house and our mortgage this past year, my current house payment is less than what my car payment was for that SRT4 back in the day. Talk about trading your soul for a bright, shiny toy. That SRT4 was fun to drive. It would go 120 mph and still have pedal left. It was small but fast. Turbo-charged and pretty. That thing would fly and looked good doing it. However, that car almost broke me with the payment each month. Not to mention the higher car insurance because of the risk of high speed and small car made insurance companies nervous for some reason. Not to mention that insurance rates are based not only on driving experience, the type of car you are insuring but also on your credit rating too. I wanted new, shiny, and flashy and was willing to do anything for it. Then, after getting what I wanted, I found that it was more than I bargained for.

It was like that old show, Fantasy Island. If you remember that show from the late-70’s-early 80’s, people would come to the Island to experience their dreams, the things that they could never do in real life back home. The show was kind of a morality play on the premise of “be careful what you wish for.” At the beginning of each show, the person would really be enjoying their fantasy (sometimes it would be a homely girl getting to experience the life of a jet set model, sometimes it would be a guy imagining himself an athletic superstar when in real life he was a nobody in a cubicle farm living a life in anonymity). Somewhere around the midpoint of each installment of the show things would turn sour with the fantasy because there would have to be some choice made between good and evil. The person would have to choose between selling their soul for their fantasy or doing the right thing. Ultimately, by the end of the show, the person would realize that our fantasies are not all they are cracked up to be and that we should appreciate the life that we live now. That was my SRT4. It was my Fantasy Island. It was living the dream, but the reality is that I could not afford the dream and it became an albatross around my neck to the point that I had to let the car go back to the bank – which further exacerbated my poor credit rating.

 

It was only through the wise counsel of the woman who became my third and final wife, Elena, that I needed to quit chasing the American dream and chasing financial windmills and work on my credit. Through paying of old debts, making settlements on repossession, and using refunds and bonuses to fix my credit that I now stand before you as a man with an excellent credit rating. It was a long hard road I will tell you. But, now, with the help of my wife, we live simply and would rather own nice and functional rather than sell our souls for bright and shiny. We would rather have no debt and no worries than the newest, brightest, shiniest.

 

God does not want us to be slaves to our debts caused by unwise desires. With that in mind, let’s read the passage, Deuteronomy 24:5-7, and for this morning let’s concentrate on Verse 6:

 

5 If a man has recently married, he must not be sent to war or have any other duty laid on him. For one year he is to be free to stay at home and bring happiness to the wife he has married.

 

6 Do not take a pair of millstones—not even the upper one—as security for a debt, because that would be taking a person’s livelihood as security.

 

7 If someone is caught kidnapping a fellow Israelite and treating or selling them as a slave, the kidnapper must die. You must purge the evil from among you.

 

God provides a law here that is meant to protect us from ourselves. God knows that we like bright and shiny. Sometimes to the point that we are willing to sell our financial future to get what we want. How many times do we increase our spending when we get a raise instead of saving? How many times do we go next level on the purchase of a new home instead of downsizing to what we can afford? How many times do we buy more than we need in a car? How many times are we slaves to our debt? How many times are we in a situation where we have more month than we have money?

 

Financial pressure robs us of our joy. Financial obligations beyond what we can do causes despair. God does not want that for us. He wants us to live with margin in our lives. He wants us to learn to live on less than we make. He wants us to know begin making idols of our debt – anything that gets in the way of our relationship with Him. Don’t get me wrong. God is not against us being wealthy. He just does not want us to become beholden to and make gods out of our money or lack of it. He wants us to use our wealth to impact the world for Jesus Christ. He wants us to have margin in our finances such that we can be generous people. He wants us not to make to make a choice between our car payment and helping our fellow man. He wants us to be able to be generous for eternal things not earthly things. Does moving into a bigger house that you can barely afford make a statement in eternity? Or does it rob you of your joy and your ability to assist God in the work of the Kingdom.

 

God wants to protect us from ourselves and foolish worldly desires. He does not want us to sell our soul to the bank. He wants us to be people with wisdom. He wants us to realize that we cannot take our toys with us so why let our toys rule us. Live simply. Be generous. Have margin so that you can breathe! Live so that you can help your neighbor! Live so that you can help expand God’s kingdom! Live with financial margin in your life! No greater joy is there when you are not constantly worrying about how to pay your bills! Enjoy life, not things! Enjoy having the freedom to be generous without thinking about! God wants that freedom for you! Let’s start today to live that way!

 

Amen and Amen.

Deuteronomy 23:19-20

Charging Interest on Loans

 

Although I now have a credit score that I am very proud of, through hard work on my debts and simply being wise about new, bright and shiny, it was not that long ago that my financial situation was a horrid one. Stupid financial decisions in my past, divorces, repossessions and you have a credit score in the 400s. Getting loans for anything was almost impossible and interest rates were high when I was able to get a loan. When I was going through my second divorce in 2004 and from then until say 2007 was my low point from a credit perspective. With all the things that you have to pay for during a divorce combined with maintaining two houses and some stupid purchases, there was time that I had no choice but to get payday loans. You know those places where you get a $300 loan for two weeks and then have to pay them back $315 in two weeks. Sounds innocuous enough. But you get several of those going at one time and living from paycheck to paycheck you can get over your head pretty quickly. You can’t afford to lose $300 out of your next paycheck so you renew the loan and pay back $315 again on the next paycheck. It was a maddening cycle that was hard to get out of. Luckily, it was a cycle that I was eventually able to get out of, but there are those who are not so lucky.

 

If you do the calculations, $15 interest for two weeks is the equivalent of 130% annual interest rate. Payday loans are legal usury because they do not call it interest. The money you have to pay back are called fees, not interest. Call it what you will. It’s interest. Then, there are the lenders in the high-risk loan market. They have 15% interest on loans all the way up to 30% interest. These are what they call predatory lenders. Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower doesn’t need, doesn’t want or can’t afford. These lenders typically service the low-end of the credit market and charge high interest on loans to typically the people that can least afford to pay high interest. They prey upon the poor.

 

It is this type of lending that I thought of when I read this passage today. There were two things that I thought of when I read it. First, how can one work for companies like that and, two, what people must do to get out of these cycles of debt craziness. Let’s read the passage together now:

 

19 Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. 20 You may charge a foreigner interest, but not a fellow Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess.

 

Some recent writers on this law have thought that it forbids the putting out of money to interest. But it is noticeable that in both the previous passages referred to (in Exod. and Lev.) the loan is supposed to be made to a “poor man” in “real distress.” Usury in such cases means oppression; and so it is proved to be by the examples given in Nehemiah 5:2-5; Nehemiah 5:10-12. The Mosaic law against usury does not belong to commerce with other nations; it is part of the protections of the poor that are intrinsic to Mosaic law.

 

When I look back on my time when my credit was lousy and I had to seek business with predatory lenders, it really amazed me how people could, in good conscience, work for such companies that preyed on those who could least afford high interest rates. In these loan houses, you get commission off the number and value of loans you generate for your location. Thus, high pressure and unscrupulous tactics are the norm. These companies reward the most unscrupulous volume generators which reinforces the behavior. High pressure sales tactics, harassment of customers with loans when they get behind, repossession of property. It’s all so ugly. At the same token, those of us who have been customers of such loan vendors have to share the blame as well. These customers want new and shiny things like everybody else has.

 

That factor is not limited to poor folks and/or others with poor credit ratings. Even when we have good credit, our society is built on consumerism. We all want new, bright and shiny. We all want the newest, next thing. The typical American family no matter their social status lives off more than they make. A raise means we spend more. We want the newest house. The newest car. The newest toys. We make fun of those who have to swim at the bottom of the barrel with these predatory lenders. But, all of us are just a couple of missed payments, a repossession away from dealing with them ourselves.

 

Let us become a people who learns that creating margin in our finances is what God wants for us. He wants us not to be a slave to our debtors. He wants money to work for us and not vice versa. Let us become a people who learns to live on 90% or less of what we earn. Let us have that breathing room where we can not have to worry how we are going to pay next week’s bills. Let us find our value not in things but in God. Let us be God’s children who buys what we need instead of everything we want. Let us be a people who can be generous to friends and neighbors and family in need. Maybe, these predatory lenders would be pushed out of business if we were not so much like the culture where we ourselves are slaves to our debt payments. Help us to be that people. Let us be a people who are obedient to God when it comes to our finances. God does not want our finances to rule us. He wants us to be wise with our money so that we will have breathing room in our lives. He wants us to worship Him and not our debt payments.

 

Amen and Amen.