Gospel Today Magazine
May - June 2008

In case you haven’t noticed, it’s getting harder to make and keep a dollar these days.  You don’t have to be an economist to see that financially, things are getting worse in this country and that a whole lot of people are hurting. Every time I land in a new city to teach and preach God’s financial principles I hear folks “stressing” over money. I’m sure you’ve seen it too:  

 

• Major financial institutions are closing and losing money
• Fewer dollars and checks are being dropped into church collection plates
• The family and friends you used to think had it goin’ on are hitting you up for loans
• You’re looking sideways at your paycheck because it’s not enough to cover the bills (forget about having enough left over for savings)

It’s getting ugly out there. A whole lot of folks are losing jobs and falling deeper into debt with every passing day. I’ve even noticed that the once-popular “prosperity pep-rallies” have come to a screeching halt. The way I see it, people are tired of that kind of hype. What they really want is a concrete way to earn and hold onto more money.

For starters, let’s look at what God says about making it through rough financial times. We need to be like the sons of Issachar (1 Chronicles 12:32), knowledgeable about the times in which we live. Armed with knowledge, we’ll know what to do, in good times and bad. Unfortunately, too many of us turn a blind eye to what’s going on around us economically and as a result, don’t have a clue what to do.  But you can flip the script in the few minutes it takes to finish reading this article because I’m going to give you the abbreviated version of today’s economic affairs and a few pointers on how to stop the pain.

Here’s the news update:

The Bottom Fell Out of the Housing Market
The average house value in America declined by ten percent in the past year! For the “lucky” homeowner, that means if your house was worth $150,000 last year, you lost $15,000 in equity, making your house worth only $135,000 today.  But that’s just the average decrease; in many parts of the country home prices have plummeted as much as forty percent!  This has placed too many folks in an abysmal “negative equity” situation where they owe more on the house than it’s worth.

Sub-Prime Mortgage Crisis
Just because the sub-prime mortgage crisis has been all over the news lately, doesn’t mean everybody understands what’s really going on.  Here’s a simplified explanation: a sub-prime mortgage is basically a “high-cost / high -risk” mortgage loan usually given to people with low incomes or jacked-up credit (unfortunately, many Blacks and Latinos fall in this category).  These loans start out with low, adjustable rates (also called teaser rates) then they escalate, unlike fixed rates which do not change.  In the past few years the rates on many of these loans have increased, even though homeowners’ incomes have not, making it difficult or even impossible for them to afford the higher monthly mortgage payments. What happens when you can’t pay your mortgage for a few months? The house goes into foreclosure, leaving somebody homeless and the bank or lender holding the bag. This problem has spread across the nation, and has also had a negative impact on the Wall Street companies that packaged the loans to sell to investors.  Hundreds of billions of dollars have been lost because of this sub-prime mortgage mess.  

Record Foreclosures
The drop in home values and the sub-prime mortgage chaos have led to a record number of foreclosures and it looks like the problem will get worse before it gets better.  The government is talking about stepping in and helping out homeowners caught up in the nation's mortgage crisis, but don’t hold your breath.  So far nobody can agree on what to do.

High Oil Prices
Do you remember how much gas $20 would put in your car a year and a half ago? You probably drove twice as far on a tank of gas as you can now. Oil prices continue to rise and recently reached the highest level since 1980. So get ready to spend even more money at the gas pump.  

The Shrinking Dollar
When the American dollar falls it makes buying things abroad more expensive.  For businesses that rely on international trade, changes in the values of foreign currency can decrease their profitability. If your employer is one of those companies, they may have to cut expenses, like payroll, which means your paycheck could be in jeopardy.  Retailers may also choose to raise prices for products you buy here in the United States in order to make up for the fact that they must spend more money on foreign goods.  

Recession Fears and a Declining Stock Market
Whenever people don’t feel good about the economy they stop spending.  Whenever spending declines, economic growth (as measured by the GDP which means Gross Domestic Product) slows.  When economic growth slows significantly, then we are susceptible to a recession.  Anytime people start worrying about a recession, the stock market usually declines.  

Now that you know what’s up on the economic front, let’s talk about what you can do to bolster your personal financial situation.

1.  Get some more knowledge
   Begin subscribing to financial monthlies like Money Magazine and Black Enterprise (you’ll still have time to read Ebony, Essence, and Jet, I promise). While you’re waiting for your new subscriptions to arrive, start reading the business section your local newspaper. You’ll find advice about everything from 401Ks to the stock market. Remember, Hosea 4:6 says, “My people are destroyed for lack of knowledge.”
   
   
2. Identify your financial weak spot, then “cover your butt”.
   “A prudent person foresees the danger ahead and takes precautions; the simpleton goes blindly on and suffers the consequences.” (Proverbs 22:3 NLT)  Just because God can do anything, doesn’t mean He’ll do everything!  This is a team effort - you have a role to play, just as God has a part to play in managing your financial well-being.  Do your part.  
   Find out if you have a sub-prime mortgage.  If you are falling behind on your mortgage payments contact your lender and work something out.  Try to get your interest rates reduced on your credit cards.  In other words, be proactive!
3. Pray and Ask God for wisdom
   There’s always room for God, so don’t let your knowledge or lack thereof fool you into thinking that you don’t also need to pray. Ask your grandmamma, prayer works.  James 1:5 (NLT) says, “If you need wisdom—if you want to know what God wants you to do—ask him, and he will gladly tell you. He will not resent your asking.”
   
   
4. Reexamine Your Lifestyle and Cut Spending.
   Cut corners where you can: brown-bag your lunch instead of going out for lunch every day; switch to basic cable instead of the luxury digital package; decrease your visits to the beauty salon, barber shop, and manicurist.  If your money is funny, now is not the time to splurge on extravagances like a flat screen plasma TV, new car or, or luxury vacation. If you’re in a lean season, don’t try to front like you’ve got money to spare.  Tighten your budget and eliminate unnecessary expenses until things stabilize.
5. Try to Make More money and Save More money
   If shaving your expenses, doesn’t provide enough relief, it may be time to get your “hustle on.” Back in the day, it was normal for our parents to hold more than one job, and there’s nothing wrong with it now. Pick up an extra job or start a business on the side to bring in extra cash.  When you do get a little extra money, save it!
6. Don’t short-change the Lord
   The biggest temptation people face when going through tough economic times is to stop tithing.  That’s a big mistake; it’s like saying, “God, I no longer have faith in your power to change my life.”  Do the best that you can to continue honoring God with your tithes and offerings so that God will rebuke the devourer for you (Malachi 3:11).
7. Realize this too shall pass
   Tough times never last, but tough people do.  You’ll get through this.  Things will get better.  Like famines; bad economies come and go.  America is resilient, and so are you.   “For I know the plans I have for you,” says the LORD. “They are plans for good and not for disaster, to give you a future and a hope.” (Jeremiah 29:11).