1.  Debt Management Part 1: The foundation Part 2: Elimination!!! 1 W. Tong (082 922 5269 / wtong@vodamail.co.za)

2. Part 1 – The foundation 2

3.  Is your debt managing you? OR Are you managing your debt?  Prov 22:7 “Poor people are slaves of the rich. Borrow money and you are the lender’s slave.” (Good News Bible)  Gal 5:1 For freedom did Christ set us free: stand fast therefore, and be not entangled again in a yoke of bondage. (ASV) 3

4. 1. Debt borrows from the future 2. Debt can add or lead to stress 3. Debt limits freedom – today & in the future 4 “Before it can be solved a problem must be clearly defined” – William Feather

5. 1. You don’t open your “window” mail 2. You roll your debts 3. You are regularly in overdraft 4. You use your credit card to draw cash 5. You never pay at least the minimum 6. You only pay the interest portion on your loans 7. You use one credit card to pay another 8. You max your borrowing facilities 9. You consolidate your debt on your bond facility 5

6. “The whole idea of motivation is a trap. Forget motivation. Just do it. Exercise, lose weight, test your blood sugar, or whatever. Do it without motivation. And then, guess what? After you start doing the thing, that's when the motivation comes and makes it easy for you to keep on doing it.” John Maxwell 6

7. Part 2 – Elimination!!! 7 “Most people spend more time planning their summer holidays than planning their lives” - Unknown

8. Basic rules 1. Stop any new debt! Be content with what you have (Phil 4:11-13)! 2. Stick to the plan! Discipline! 3. Control your expenses! Live within your means! 4. Save for emergencies! 5. Set goals – eg. ± 1 year small debt, 7 years for big debt 8

9. “Yard by yard, life is hard; but inch by inch, it’s a cinch” – Robert Schuller 9 1. Continue paying required minimum on all debts! 2. Free up cash from budget to accelerate pmt of debt OR set an accelerator margin,say +/- 10% of gross 3. List all debts – largest balance to smallest balance 4. Next to each debt enter monthly minimum payment 5. Divide the balance owing by the minimum payment to arrive at the payment ratio 6. Rank the debt balances from lowest payment ratio to highest payment ratio

10. “Yard by yard, life is hard; but inch by inch, it’s a cinch” – Robert Schuller 10 7. Start applying accelerator cash from lowest rank to highest rank 8. Once lowest rank is paid off; Double up / increase payments on the next ranked debt 9. Pay free cash on next target on list – create a snowball effect of money! 10. If an emergency arises attend to it then resume! Or make sure some saving occurs in the mean time!

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15. 15 House loan / bond 1. You can pay a house off in 7 years! 2. Do not over capitalise! Borrow little 3. Your personal house doesn’t generate income 4. Location is important 5. Pay as big a deposit as possible 6. Make use of access bond facilities

16. 16 Interest rate & payments

17. 17 Interest savings by increasing monthly payments

18. 18 Summary: It pays to pay off your bond early! Debt costs a lot – stress, freedom, future potential, interest paid! Endeavour to live debt free!!!

19. BOOKS:  G. Edward Reid, “It’s your money isn’t it?”, Review and Herald Publishing Association, 1993  Larry Burkett, “How to Manage Your Money”, Moody Press, 1991  Larry Burkett, “Debt Free Living”, Moody Publishers, 2001  Larry Burkett, “Complete Financial Guide for Young Couples: A Lifetime Approach to Spending, Saving and Investing”, Chariot Victor Publishers, 1993  Trump University, “Wealth Building 101”, J Wiley & Sons, 2007  Robert Kyosaki with Sharon L Lechter, “Retire Young, Retire Rich”, Warner Books, 2002  Robert Kyosaki with Sharon L Lechter, “Cashflow Quadrant”, Warner Books, 1999 WEBSITES:  Crown Financial Ministries, www.crown.org  http://www.easypersonalfinance.com  www.johnburley.com/trump  http://www.moneybiz.co.za/personal_finance/personal_finance.asp?PersonalFinan ceID=9  http://www.finforum.co.za/perfinan.htm 19

20.  Thank you for your participation My contact details: Cell: 082 922 5269 Email: wtong@vodamail.co.za 20