Tackling Student Loan Debt

The Bible does not tell us that it is a wrong to borrow or that it is wise. But it also does not tell us that God will bail us out of our debt either. So how do we handle debt?

Debt can fell like a never-ending cycle leaving us feeling stuck. In other words, debt is just a distraction. Jesus wants so much more for our lives. Debt dictates to us what we have to do instead of what we are called to do.

Today, student loans are one of the largest debts that hang over many Americans causing so much unwanted stress in households. Most student loans are multiple loans all wrapped up under one statement. If you don’t know where to begin, breaking down the statement can feel a little overwhelming. Normally we pay the amount the loan provider tells us to. Minimum payments are mostly interest paid to the highest rate loan first then a few dollars to principal.

3 Ways to Tackle Student Loan Debt

Take time to review your budget

Check to see what is left over after all bills are paid so you know how much extra can be used to pay down your debt. 

Review your student loan statement

Write out each loan with the amount owed and the interest rate on that loan. Add this to your budget each month. Keep a focus on what debt you are trying to eliminate. 

Sign into your student loan account online

Each month make the minimum that is asked from the provider. Then with the extra you have in your budget each month set an amount you will use to pay towards the principal to one of the student loans. Start with the smallest loan amount first. This will allow you to see debt decreasing faster which will keep you motivated to eliminate the rest. 

These also work if you are in school and have deferred loans. Your loans are incurring interest daily. Even though you are not receiving a bill each month, you can still sign in to your online portal. Since the loan is deferred, each payment can be applied to principal decreasing interest cost and the amount that you owe. 

Give to everyone what you owe them: Pay your taxes and government fees to those who collect them, and give respect and honor to those who are in authority. Owe nothing to anyone – except for your obligation to love one another. Romans 13:7-8 (NLT)

No matter what type of debt` you have, these same principles can help you eliminate what you owe. As we make decisions throughout our life God does not want us to trust in our own understanding. Instead He asks for us to lean into Him with reflection and prayer, transforming our hearts so we can change the way we think.

Do you have tips that may help others pay off their student loan debts? Share in the comments!

Resource Transformation

Romans 12:2 (NLT) – Don’t copy the behavior and custom of this world but let God transform you in a new person by changing the way you think. 

Resources are a set of supplies provided by God to help us operate our daily lives. As Christians, this can seem to be a difficult task while trying to be a good steward of these resources.

The dictionary defines resources as a stock or supply of money, materials, staff and other assets that can be drawn on by one person or organization in order to function effectively. The definition does leave out a crucial resource, the giving of time. God truly wants to transform how we see and utilize the supply of resources that He provides. For God is the one who provides seed for the farmer and then bread to eat. In the same way, He will provide and increase your resources and then produce a great harvest of generosity in you. 2 Corinthians 9:10 (NLT)

The question is what steps can we take to be a better steward of these resources? Let’s take a look at four steps to help us think about this in a new way.   

Budget/Plan

It all begins with a plan. We need to know how much income is coming in, what expenses we owe, and be ready for those unexpected bills we might not see coming. An option for getting started is to break up your monthly income into percentages; this will guide how the resources will be utilized. For the main household expenses set aside 50-60% of your monthly income. Use this to pay for rent, mortgage, utilities, food, car note, cell phone, car insurance and student loans. It is possible that your initial percentage of expenses could reach up to 70% of the household income. As you pay down expenses, the percentages will decrease allowing you to shift the budget creating new opportunities for that income.     

Tithing

We all should have a heart to invest in Christ and the Church. It is one action to be faithful in giving 10% of our income to God, but as we deepen our walk with Christ, he also teaches us to share with each other. Yes, you will be enriched in every way so that you can always be generous. And when we take your gifts to those who need them, they will thank God. 2 Corinthians 9:11 (NLT) Tithing is important to the movement of the Church, but let’s also not forget about two other resources that can help our community. Our time and skills can be donated for the work of the ministry and for building up the body of Christ.    

Retirement 

Retirement may seem like a long time from now and preparing for it may seem like a heavy task. A good plan to reach for is setting back 10% of your income. That might seem like a big stretch today so until you can achieve that, a good starting point could be your employer’s retirement match program. Some companies offer 4-6% match as long as you invest 4-6% into your retirement. It is a great starting point to maximize your retirement planning. Each year you can reassess your budget and determine if you can increase your retirement giving in increments of 1% to help you prepare for the future.   

Reserve/Emergency Savings 

What happens with the other 20-30% of my monthly income? These funds can be set aside for unexpected expense, planning a family trip, supporting a cause that you believe in, paying down debt, an evening out with friends or investing in your education to learn a new skill. Taking these steps to create and review the household budget each month allows you a new perspective of managing your resources. 

Above all, look to God’s plan for budgeting your resources and seek His wisdom in your finances.

Six Ways to Stretch Your Budget

Together we face an unexpected time which can seem unclear and may cause us to rethink or question what we know, especially the way we handle our finances. The world tends to think that money can meet all of our needs. They utilize clever marketing so we keep spending and believing that money can fulfill all of our desires. In reality, truth reminds us that wisdom and money can get you almost anything, but only wisdom can save your life (Ecclesiastes 7:12). Scripture recognizes that money is necessary for survival but warns us against the love for money. God calls us to be content with what He has blessed us with. 

Hebrews 13:5 states, “Don’t love money; be satisfied with what you have. For God has said, ‘I will never fail you. I will never abandon you.’” 

God reminds us in this passage that He is always with us each step of the way. He is like the wind. We cannot physically see the wind, but we can feel the presence of the wind and how it moves around us just like God does in our own lives. As we face Covid-19, we might find ourselves with more time and less income on our hands than what we are used to. 

1 Thessalonians 5:18 tells us, “Be thankful in all circumstances, take time to reflect on the good things in your life that God has provided.” The question is, how do we stretch our budget during this time and maximize our resources?

Tips to Stretching Your Budget

1. Budget/Plan

Take a moment to write out a monthly budget. Place all of your bills/expenses on the left-hand side of the page, and on the right-hand side, write your household income. This allows a clear view of where your money is going each month. You can also use a monthly budget app for this task. 

2. Recurring payments

Examine if these payments are still necessary today. It is so easy to overlook recurring payments that we might think were canceled. 

3. Grocery Shopping

Take the time to make a list. Use digital and physical coupons. Anytime you do not have a coupon, consider a similar sale item. You will be surprised by how much you can save. 

4. Are your cell phone and cable bills hogging your finances? 

Today we are using more wifi and streaming options than ever before. Check your cell phone provider to review new plans that are easier on the budget. Great TV alternatives that are budget-friendly are programs like Hulu TV, YouTube, AT&T TV and PlayStation TV. See what fits best with your household. 

5. Mortgage

If you are experiencing a decreased budget due to Covid-19 check with your mortgage company for forbearance options. They have skilled representatives to help you choose which is the right option for your household. Sign into their website for all of the details.

6. Auto Loan or Lease

Contact your loan or leasing company for a deferment option on the vehicle loan. Sign into their website for easier deferment application process. 

What other tips have you found to be helpful in stretching your budget? Share in the comments!

Managing Your Money

A couple of years ago, our staff was getting ready to go through the Financial Peace University class together. My mom was leading the class and wanted me to go, but I really didn’t want to go because I didn’t see the point in it for me. I was only twenty years old at the time with no debt and no mortgage payment, so I thought that the class didn’t really apply to my life. I thought it would be a waste of time, but I went anyways… Every week, they would ask what our takeaway was from the class, and I usually felt like I didn’t learn anything. I knew the principles, but I just wasn’t applying them.

In the last week of the class, Dave Ramsey talks about how if you live differently than everyone now, one day you’ll be able to live and give differently than everyone else in the future. I started thinking about all of the things that I would like to accomplish one day…like supporting missionaries, giving more to the church, traveling…and it really made me think about that statement. The choices that I’m making now are affecting my future and whether or not those things will actually be a reality for me one day.

From then on I really just surrendered my finances to God and decided that I wanted to start managing my money in a way that honors Him. I’ve worked very hard to save. I’m saving for a down payment on a house, investing into retirement, and giving more. I’ve even been able to just take my friends out and do fun things without having to worry about living paycheck to paycheck.

It’s definitely hard to manage your money well if you’ve had bad spending habits in the past. I used to go out and spend money randomly, especially on clothes, name brand things, and going out to eat with my friends. But it’s a shift in your mindset to understand how the money that you’re spending now could be used for something better in the future. It takes fighting against instant gratification and knowing that it may not be worth it, knowing that it could be used better in another way. It just took committing to God that I want to manage my money better for Him, and if I have to say no to things, then that’s what I’ll have to do.

My mom definitely helped me by holding me accountable and has steered me in the right direction by opening my eyes to saving for retirement and other things that will be beneficial to my future. I also started meeting with a financial advisor. He helps me understand what investments to make and in a way that will glorify God. He helps people realize things that we can invest our money in as Christians to honor God that will be a good investment as well.

If you’re younger, it’s never too early to start managing your money in a way that honors God, but it’s also never too late. We all have a future that we hope to have, and there’s things that we want to be able to do. But it’s really the choices that we make now that determine whether or not those things will be a reality.