MONDAY MANNA
A service to the business communit June 26, 2006

HOW TO DEAL WITH A PERSONAL FINANCIAL CRISIS
By: Austin Pryor

In assessing the credit health of consumers, a major business publication stated earlier this year:
"…consumers have run up the highest debt in…history, both in absolute terms and relative to income.... We believe most (consumers) will be able to meet their debt service payments. However, a minority of households whose debts are high (that) will be in more difficulty, especially if the economy falters as interest rates rise."

You don't want to be in that vulnerable minority during a time of rising rates. If the economy "falters,” are you ready? How a recession would affect you depends to a large extent on where you live, the industry you work in, and above all, your financial preparedness. Even people with high-paying jobs can be vulnerable. As the Bible says, “The rich rule over the poor, and the borrower is servant to the lender” (Proverbs 22:7).

If you see potential trouble ahead, don't panic. There are steps you can take to reduce your vulnerability if you start immediately. Here are 10 suggestions:

1. Absolutely, positively, do not increase your present level of consumer debt. No more credit cards, no matter what. Stop buying non-essentials. Cut back on optional lifestyle spending. Quit carrying your ATM card with you. Place a priority on your mortgage payment and various insurance premiums.
2. Run toward your creditors, not away from them. Contact each one, explaining your budget situation and how much you have available. Be realistic. Show them a list of your other creditors, and how you are dividing your available money among them. Once you've made a promise to them, honor it at all cost.
3. Think twice before putting your house up for sale. The cost of real estate commissions, moving, and replacement housing often adds up to more than you're presently paying. Instead, contact your mortgage lender. They will generally work with people who display a responsible attitude. Ask for partial payments for a time, or to extend the loan to permanently lower the monthly payment.
4. Protect your career. Raise your on-the-job performance to new heights, and consider adding new skills. Cutbacks are more likely to affect the "average" worker. This is probably not the time to switch jobs; you don't want to be one of a company’s last hired employees if the economy worsens.
5. Raise cash by selectively selling assets. Every house is filled with items that are no longer used but in good condition. Advertise in "bargain mart"-type classified newspapers or online. Bicycles, boats, electronic and computer items sell quickly if priced right. If you have investments to sell, first sell the ones in which you have a loss. You can often use losses to offset your other income and reduce income tax obligations.
6. Borrow from your life insurance. Policies that build cash values allow you to borrow up to the "surrender value." If you don't pay it back (or die while the loan is still unpaid), the amount of insurance paid to your beneficiary will be reduced by the amount of the loan.
7. Borrow from the college fund. This is a decision for the whole family. If college is years away, you can work on replenishing the fund after your debt crisis is over. If college is coming up soon, your child might qualify for financial aid and government loans.
8. To conserve cash, temporarily stop funding your retirement plans. While many company plans allow you to borrow against your vested benefit, we would advise against it. This is truly a "last resort" measure.
9. Once a bill is paid off, don't reduce your debt-retirement budget. Take the money that you were using on that bill and put it toward your remaining highest interest rate debt.
10. Avoid bankruptcy. This should not be considered an option. It is a matter of personal and Christian integrity to pay your debts in full. The stigma of bankruptcy stays with you a long time and could affect future applications for employment and housing for years.

Austin Pryor is publisher of Sound Mind Investing, America's best-selling financial newsletter written from a biblical perspective. He has written the book, Sound Mind Investing. Read his investment advice at www.soundmindinvesting.com.

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Reflection/Discussion Questions

1. Why do you think people find themselves deeply in debt? Who is to blame, do you think, for this growing and seemingly pervasive dilemma?

2. Have you ever personally experienced a financial crisis? If so, what steps did you take to resolve it? If you are currently facing substantial indebtedness, have you considered seeking advice or other forms of assistance to ease your problem?

3. Which of the 10 suggested steps in this “Monday Manna” do you think seems most helpful? Are there any ideas that you had never considered before?

4. What difference could it mean, do you believe, if people were consider the warning from Proverbs that “the borrower is servant to the lender” before they accumulated large credit obligations?


NOTE: If you have a Bible and would like to read more about this topic, consider the following passages:

Exodus 20:17; Proverbs 13:11, 22:26-27, 28:20, 30:8-9; Luke 16:1-13


週一嗎哪
服事全球工商界
2006.6.26
如何處理個人財務危機
一份發行量很大的商業刊物在今年初評估消費者的信用健康情況，寫下了下面這段話：
「…消費者的債務已創歷史新高，不論是在絕對條件下或相較於收入的條件下…我們相信大部份的消費者可以清償債務。然而有少數家庭的債務高到難以償還，尤其若是經濟不振，利率升高，就更困難。」

當利率上升時，你一定不想成為受害的少數人。若經濟不景氣，你是否已準備好因應之道？經濟衰退會如何影響你，大部份是取決於你所住的區域，你所從事的行業，尤其是你的財務準備工作。即使高薪階級也可能受害。如聖經所說：「富戶管轄窮人，欠債的是債主的僕人」（箴言22章7節）。

若你看到前面可能發生困難，不要驚慌。你若能立刻開始一些步驟，就可減少你的受害程度。以下是10個建議：

1. 絕對不要再增加你目前的消費負債。無論如何，不要再辦信用卡，不買非必需品，減少生活時尚的花費，出門不帶提款卡。將你所有的抵押貸款和各類保險費排出優先順序。

2. 與你的債主聯絡，而不是躲避他們。聯絡你的每個債主，向他們解釋你的預算，以及你現有的資產。要切實際。讓債主知道你還有那些其他的債主，以及你如何分配你所有的給全部的債主。一旦你向債主們作了承諾，就要不計代價地實現諾言。

3. 賣房子前要三思。房地產仲介費、搬遷費用，以及新買的房子通常比現在的花費還高。相反的，你要聯絡你的抵押貸款銀行。他們一般都願意與有負責態度的貸款人配合。你可要求這段時間先償還一部分貸款，或延長貸款期限，以降低每月的還款額度。

4. 保障你現有的工作。提高你的工作表現，使其達到最佳狀態。並考慮增加新技能。裁員比較可能影響「一般」的員工。這時可能不是換工作的好時機。若經濟情況惡化，你不會希望自己是公司中最先被解聘的員工。

5. 選擇性地賣掉一些資產以換取現金。每個家庭都充斥一些自己不再使用，但狀況還很好的東西。可在「二手物品銷售報紙或網站」上登廣告。若價格合適，腳踏車、船、電子產品或電腦，可以很快賣出。若你要賣投資性商品，先賣掉你有損失的商品。你可用這損失來抵銷收入，就可扣抵所得稅。

6. 用壽險質借。增值型的保單可讓你貸提前贖回價值的金額。若你無法還款（或在貸款未還清時死亡），保險公司給付你受益人的保險金就會先扣掉你的貸款。

7. 向大會助學貸款基金借貸。這是一個為全家作的決定。若你的孩子要多年後才會讀大學，當你的財務危機解決後，你可再補充此基金。若你的孩子很快就要讀大學，你們就有資格得到財務補助和政府的貸款。

8. 為保留現金，可暫時不將現金存入退休帳戶。許多公司允許員工從自己的退休帳戶借款。但我們建議不要這麼做，除非真是萬不得已。

9. 一旦付清一項債務，不要減少你的債務清償預算。將原來每月用來償還那債務的錢，用來償還其餘債務中利息最高的債務。

10. 避免破產。不要將破產列入你考慮的選項。將所有債務還清是個人與基督徒的道德義務。破產的污名會跟隨你許多年，且會影響你將來的求職與購屋。

思想 / 討論題目
1. 你認為人們為何會深陷債務？ 你認為這愈來愈多的普遍現象應怪誰？

2. 你個人是否曾經歷財務危機？ 若是，你採取什麼步驟去解決？ 若你現在就面臨龐大的負債，你是否考慮尋求建議或其他形式的幫助來減輕你的問題？

3. 本篇「週一嗎哪」所建議的10個步驟中，你認為那一個似乎最有幫助？ 有沒有那一項建議是你以前從未想到過的？

4. 若人們在累積大量債務前，有想到箴言的警告：「富戶管轄窮人，欠債的是債主的僕人」，你認為這會有什麼不同的結果？

註：若你有聖經且想要看有關此主題的其他章節，請看：
出埃及記20章17；箴言13章11節，22章26-27節，28章20節，30章8-9節；路加福音16章1-13節

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