Getting God's Army Out of Debt

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Session 2 – Where You Are Today

Review Spending Lists…

Did you do a pretty good job of keeping your Spending Discovery List up to date? Would you like to share any insights you had? You need to keep on tracking what you spend. This is a VERY important step on the road to Financial Freedom.

We’re going to talk about your current situations. You’ll be able to take snapshots of your current situations now, and in the future. Not only will you be able to look at your situation at any time in the future, you will be able to look back to say, “See how far we’ve come!”

Our objective is to become good stewards of the Lord’s property. We have to be able to pay attention to where we are and where we’re going. We need to set goals and make plans so we can be effective. It is hard to make plans and set goals if you don’t know where you are.  Let’s talk about ways we know where we are…

The snapshot of our current situation can be obtained with a few documents we will now discuss. Unfortunately, being a good steward also requires that you be able to give an accounting of your activities and effectiveness – this requires records and math and all that other stuff you’ve been avoiding. We’ll try to simplify and make these records clear and useful.

The Snapshot Tools

  1. Checkbook Register & Bank Statement
  2. Bill Place and Bills-to-Pay Record
  3. Paid Bills File (Credit Card Statements, Financial Institutions Statements.)
  4. Investment Record
  5. Financial Health Statement

What do these documents represent?

1. Checkbook Register is your record of your cash flow – cash that comes into your checking account, and cash that leaves. As a good steward, this is the most important item to keep up-to-date. You need to keep track of all the pennies that come and go. If you can’t be faithful in small things – the pennies – what says you will be faithful in greater thngs?

The best check record is not your duplicate checks or stubs, but an old-fashioned register where you can write and make notes about your checks. Pre-number the register to cut down on un-recorded checks.

The best way to manage your cash is with the checkbook. It is not as convenient as an ATM or Debit card – and that’s part of the point. Immediate Gratification leads to indulging your fleshly desires and gets you in trouble. ATM and Debit cards are actually harder, because you have to collect and save those receipts, and then record them somewhere, sometime in order to keep accurate records. Get as close to your cash as you can.

The Bank Statement is the bank’s record of your cash flow. The Bank Statement and your Checkbook Register were snapshots taken at different times and places, and they are rarely the same. The process of making both pictures look alike is known as Reconciling, and we’ll cover that later.

2. Bill Place and Bills-to-Pay Record – this is a safe place to keep all of your bills so they don’t get mis-placed – so you can pay them on time and avoid late fees, etc. The Bills-to-Pay Record is a list of all your bills, their amounts, due dates, and other details that help you get them paid on time.

3. Paid Bill File – this is to organize your paid bills to minimize you overpaying a duplicate, or to reconstruct your history with this company in case there is a dispute.

4. Investment Records – your bank statements, savings bonds, retirement plan statements, stocks & bonds, other forms of money, etc. You need to keep track of these assets as thoroughly as your checkbook.

5. Financial Health Statement – this is a snapshot that compares what you have with what you owe, and it measures progress towards goals.

Using the Tools

We’ve talked about these important documents, now let’s talk about effective methods to deal with these documents. Let’s start with your bills and a simple way to keep track of them.

You may already have an effective method – as long as it is simple, safe, and lets you analyze and pay the bills on time, keep on using it. If it gets you in trouble, change it.

Checkbook Register and Bank Statement – Reconciliation

            Your checkbook and bank statement will almost never agree with one another. You write checks that don’t make it to the statement. The banks charges you for something you forgot about. The check you wrote last month STILL hasn’t been cashed… There are so many ways that your two checking account documents can get out of sync.

But if you don’t do a monthly reconciliation, you will not know how much is REALLY in the bank. You run the risk of writing bad checks and paying the resulting insufficient funds fees. How in the world do you ever get the two to match?

Usually, on the back of all bank checking account statements, there will be a reconciliation form with instructions. All you really need to do is to read and follow those instructions. What do those instructions mean?

What you will do is to first check off all the entries for checks and deposits that appear on BOTH the check register AND the bank statement. These are entries that both the bank AND you know about.

You will find checks and deposits in your register that haven’t been checked off. These are items that YOU know about, but that the bank doesn’t. On the bank statement, there will be entries that you didn’t check off. These are items that the BANK knows about, but that you don’t. (You should now enter these the bank knows into your register.)

The sample bank reconciliation form at the end of this chapter uses those designations to help you make the entries and do the math. By taking the respective last balances of the register and statement, adding or subtracting the identified amounts, you will come up with two adjusted balances. They should match.

If they do, then you and the bank are in sync. Your checkbook register shows an accurate balance. You can write checks with confidence.

If they don’t match, that means that someone made a mistake. The most likely culprit would be mistakes in the arithmetic of adding and subtracting deposits and checks. The next likely would be past entries that you forgot to make, or that the bank made, but you didn’t enter. The least likely reason would be an error the bank made.

If you haven’t done a reconciliation in a long time (or EVER) then you should probably accept the bank’s version of reality. Enter the NEW balance you calculated that the bank should be. Mark it and make an entry (plus or minus) that will bring your balance in line with the bank’s new one.

If you just have to know, then you need to go back to the last known good balance and compare all the bank entries on all the banks statements since then with all the entries in your register. Recalculate all the running balances. Do this until you find the one or ten or one hundred errors – correct them, and then your balance should match.

See? I told you that if it’s been a long time or never, to take the bank balance and correct to it. If you reconcile regularly, you will catch errors faster, and you’ll avoid surprises.

Reconcile every month. Balance to the penny. Remember that the good steward is found faithful in small things.

Bill Place and List of Bills Owed

You need a Bill Place or a Bill File. Every day when the mail comes – every time – take all of the bills out of the mail and put them into the Bill Place. Don’t open them or try to deal with them – just put them all in the Bill Place. This way, you’ll always know where to find any unpaid bills. You won’t have to search under stacks of papers or dirty laundry. Just go to the Bill Place and there you will find your bills.

Take all of the wonderful, “Gee-I-Can’t-Resist” offers and put them in the Offer Place. That would be your round file. If it doesn’t have a first class stamp on it, it is a sales pitch of some sort for something you don’t need. Save the wasted time, don’t open it, and send it to its final reward.

Your Bill Place could be a store-bought file, a shoe box, a manila folder, a desk drawer – it doesn’t matter, as long as the only thing in this Bill Place is Bills, and they all go Only here. I prefer an old manila folder. THIS one has been our Bill Place for over 10 years. You might take one of those very large envelopes that Offers sometimes come in – empty it out, and use the envelope. Be sure to thank that company for their generosity…

You can also find several commercial organizing doo-dads to help you keep your bills and budgets in order. If you absolutely feel you need one of these, then make sure it is inexpensive and effective. Be sure you can find it when you need it. Make sure you use it.

Go home and make a Bill Place, and collect all of your bills and put them in it. Every day, put in the bills that arrive in the mail.

Inside this Bill Place, you will also keep copies of your Bills-to-Pay Record. You should also have a supply of envelopes and stamps on hand. Have more stamps and envelopes than you will need at a single bill-paying session, and then replenish them as you use them. You don’t need to buy a roll of 100 stamps, but buy a couple of books from the Post Office or your local supermarket, and then buy a new one when the first one is gone.

Use the Bill Place and Bills-to-Pay Record every time you pay bills. Paying Bills needs to be a scheduled and practiced routine, not a hurried and random event. If you pay at random, you are not practicing or exhibiting discipline, and discipline is what you need. Routine payment is practiced and disciplined.

When to pay – The “When Pay-ed, Pay-Out” plan.

To develop a routine, you need to make a plan that will work. Every Payday, you could sit down, open the bills, enter them on the Record, and pay the bills that are there, or until the planned money is spent. Bills that come later can probably wait until the next payday to handle. Since you have money every payday, you should pay some bills every payday.

A major point is that you enter the bills in the Bills-to-Pay Record. This Record should be kept for a LONG time. It is part of your history – it will document how you became a good steward and got out of dept. your homework will be to fill this out for all of the bills you find in your Bill Place.

Paid Bills File

There are many great and fancy ways to file your bills. The simplest way is just a box or a drawer where all of your paid bills go. You can set up a filing system if you like, but in reality, only some of your bills are important enough to save for any length of time.

I use a desk drawer. In it I keep permanent records of investments, credit cards, contract purchases and related documents, tax documents, and agreements. I also keep, temporarily, routine monthly bills such as utilities, phone, cable, etc. – these can get tossed after a few months as long as they are current and there are no outstanding disputes.

I also have a special folder for tax-related papers and receipts. It is our Christian duty to pay our taxes, “Render unto Caesar what is Caesar’s…” but we are not obligated  to pay more than we owe. By keeping tax-related documents corralled in one place, you will have at hand what you need to complete you annual tax computations. Receipts from real estate taxes, medical bills, mortgage statements, w-2’s, etc all go in here. At tax time, it is easy to gather them all up and complete your tax returns.

In here you should also keep track of long-term things like home-improvement receipts, insurance documents, job reviews, retirement plans, etc.

Investment Documents

These end up in the Paid Bills File. But, each month, they first go into the Bill Place because you will want to take a look at them every month. When you pay your bills, you will record the Investment information and file it permanently in the Paid Bills File.

Financial Health Worksheet (Net Worth Statement)

This is a snapshot of what you have compared to what you owe. If you have more than you owe – that’s good – if you owe more than you have – that’s bad.

You begin by listing your assets. Assets are things you have that have value. For this worksheet, assets will be limited to your cash and bank balances, the value of your investments and other cash-things, your cars, boats, planes, and real estate. You won’t be listing your furniture, household goods, collectibles (unless you have a LOT of collectibles) jewels, furs, computers, stereos, etc. They are only worth what someone will pay for them in a garage sale – not much. Your collections and household items are personal indulgences and if the Lord wants you to go… It isn’t our intention to judge whether you are imitating Christ – that’s between you and God – just asking the question, “How much is enough?”

You then list the assets’ values – not its sentimental value, but its market value – you should be able to gauge market value by checking the respective statements, the newspaper ads and listings, or through a calculation. Total them all up – that’s what you have, or your Total Assets.

Now, list all of your debts. It isn’t necessary to distinguish between short-term and long-term debt – just list all your debts. Include here loans from parents or other family, credit cards, car loans or leases, house mortgages and equity loans, store contracts, cell-phone contracts, balloon payments, school loans, money borrowed against your life insurance or 401k plans, any past-due taxes. Here, you list the total amount owed, not the periodic payments due.

Add up all of these debts and total them up. This is your Total Liabilities.

Subtract the Liabilities from your Assets and put that amount here.

If this is a negative number, that means you have negative net worth – you are net-worthless. If the number is positive, you have net worth.

What this roughly represents, ignoring any tax implications, is that if you sold all you owned and then applied all of the proceeds to your debts, what is left over is your value. If you died today, this value would go to your children.

As you can see, you don’t want to leave your children a negative amount – then they will have to get you out of debt after you die… With a negative amount, you are technically bankrupt.

Our goal is to move you to a positive net worth with little or no debt associated with it.


1.      Balance Your Checkbook

2.      Create or find a Bill Place – fill it with your existing bills.

3.      Make a list of your existing bills.

4.      Create or find a Paid Bills Place or File

5.      Fill out the Financial Health Worksheet

6.      Continue recording your purchases on the Spending List.

7.      Bring them all back with you next week.


Questions? Call John or Sandi Larson at: 503-644-0502 for a private consultation.

(Or, contact John & Sandi Larson via email at:

Copyright 2001, 2002, Visions Business Development, Beaverton, Oregon - ALL RIGHTS RESERVED

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Becoming Debt-Free Worksheet


Outstanding Debts for Month of: ________________________


Total Debt – Beginning of Month: _________________________________________


Total Minimum Payments: _________________________


Total Paid Towards Interest: _________________________


Total Paid Towards Principal: ________________________


Total New Purchases: _______________________________


Total Progress towards being Debt-Free: _____________________

(Amount Paid Towards Principal minus New Purchases)


Total Debt – Ending of Month: _____________________________________




Total $ Owed

Monthly Payment $

Interest $

Principal $

Past Due?



















































Page 2, Month of: ____________________



Total $ Owed

Monthly Payment $

Interest $

Principal $

Past Due?









































































































Financial Health Worksheet


As of: _____________



Cash:                                        ___________________

Checkbooks:                            ___________________

Savings:                                    ___________________

Investments:                              ___________________

401k, IRA, etc:                        ___________________

Value of House:                        ___________________

Value of Vehicles:                     ___________________

Other Assets:                            ___________________


Total Assets:                             ______________________



Credit Cards:                            ___________________

Vehicle Loans & Leases:          ___________________

Home Mortgage:                      ___________________

Home Equity Loans:                 ___________________

Cell Phone Plans:                      ___________________

Other Loans:                            ___________________

Taxes Due:                               ___________________


Total Liabilities:                         ______________________


Net Worth

            Total Assets:                             ______________________


            Total Liabilities:                         ______________________



Total Net Worth          _____________________


Bank / Checkbook Reconciliation


As of: _____________


Bank Says:

Ending Statement Balance


(A): _____________________


Plus - Deposits I Made – Entered in my Checkbook but Not shown on Statement:





Total (B): _______________


Minus - Checks, Debits, or ATM’s I’ve used – Entered in Checkbook - Not shown on Statement:









Total (C): ____________


What Bank Says my Checkbook balance Should be:


A plus B minus C: ______________

I Say:

Ending Checkbook Balance


(D): _____________________


Plus - Deposits I Made - Forgot to Enter in my Checkbook - Shown on Statement:





Total (E): _________________


Minus - Checks, Debits, or ATM’s I’ve used - Forgot to Enter in Checkbook - Shown on Statement:










Total (F): ________________


What I say my Checkbook balance Should be:


D plus E minus F: ___________



Difference between Bank and Me: ________________





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