1. Budgeting and Debt Reduction Responsible Stewardship of God’s Great Gifts

2. Personal Finance Workshops A.Budgeting and Debt Reduction B.Saving and Investing C.Personal Financial Management D.Stewardship E.Charitable Giving

3. Our time today… Consumer Trends The debt crisis Causes of debt Budgeting Budgeting and debt reduction tips

4. 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: 1980’s =20.2% at highest point; 2005 = 1.2%

5. 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

6. Reversing the trend 1.Recognize it is not how much you make 2.Philosophy of “all is a gift from God” 3.Trust in God that HE provides 4.We can’t take it with us 5.Good stewardship

7. Reversing the trend 6.Live within our means – use debt wisely 7.Prioritize our life decisions 8.Limit borrowing to appreciating assets 9.Understand risks 10.Develop a financial plan and use a budget

8. 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 God’s great gifts

9. Budgeting Myths 1.Budgeting is painful 2.You only need to budget if you are in financial crisis 3.Budgeting requires long hours and lots of paperwork Source: http://www.tuliptreepress.com/myths.htmhttp://www.tuliptreepress.com/myths.htm

10. The Three Steps of Budgeting 1.List available monthly income 2.List monthly expenses 3.Compare income vs expenses

11. Tracking is key

12. Budget Example

13. 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

14. Efficient steps for Debt Reduction

15. Debt Elimination Worksheet Conventional Item Amount Owed Interest Rate Months to Pay Off Car Loan$6,000 9.2%22 Credit Card 3$1,000 28.8%25 Credit Card 1$2,00011.5%26 Credit Card 2$1,60018.5%27 Family$ 900 0.0%27 Line of Credit$9,550 8.9%95

16. Debt Elimination Worksheet Snowball Effect Item Amount Owed Interest Rate Months to Pay Off Family$9000.0%5 Credit Card 3$1,00028.8% 9 Credit Card 2$1,60018.5% 13 Credit Card 1$2,00011.5% 17 Car Loan$6,0009.2% 20 Line of Credit $9,5508.9% 33

17. Make the Commitment To yourself, in God’s presence As a family – state your goals Consult a trusted advisor Create a plan – a commitment to action

18. What the Bible says about debt “The rich rule over the poor, the borrower is servant to the lender” Proverbs 22:7 “You are bought at a price, do not become slaves of men” 1 Corinthians 7:23

19. Want to go deeper? To review or start your plan – consider FaithLife Financial Go Green - www.faithlifefinancial.ca download financial tools view seminars calculators great financial articles