In God We Trust

Teaching You How to Get OUT of Debt and Live Debt-Free

Archive for the ‘Basics’ Category


Your Bank Account just bubbles right along, deposits and withdrawals taking care of themselves. You check the balance online now and then, but other than that – what you don’t know is vital!

Your Bank Checking Account doesn’t take care of itself. You need to be in charge and in control. you do that by Reconciling your account – every month.

Here are 5 Reasons you need to do this:

1. You Make Mistakes.

Well, maybe you don’t, but I know I do. If I don’t Reconcile my account now and then, I never discover those errors without pain.

I remember one time as I was paying my bills, I ended up with a couple hundred dollars I did not expect to have. I re-checked my figures, they were right, so I wrote a few more checks for bills that I had been avoiding. Problem was… I forgot to enter my Mortgage Payment! You know what happened next – Bounced Checks, Service Fees, a Big Mess.

Reconcile so you can catch your mistakes and make corrections.

2. The Bank Makes Mistakes.

Yeah they do. Not very often, that’s for sure, but every now and then… And if they do, you can catch them and get it fixed – up to a point. Generally, if you fail to find and correct an error in your account, after a period of time, say 90-days, the error is counted as good. (Unless the error favors THEM, of course…)

So, check them out to avoid their errors costing you money.

3. You Can Avoid Service Fees.

If your account balance is unknown, you can accidentally (you would never Deliberately run your balance negative…) fall below your account minimums and incur fees you didn’t intend.

4. You Can’t Control What You Don’t Know.

How do you keep your budget in line if you don’t know ExActly what your bank balance is? The key concept in money management is to know status at all times. What you spend is the most important variable in the equation of keeping more of your money yours.

Your bank balance is a living, breathing amount, changing by the hour. The Reconciliation is a snapshot of your recent activity. Taking and knowing this snapshot is your vital control measure.

5. Account Activities Get Out of Sync.

Every transaction jiggles your balance. You know most of what YOU do to the account. But, because of timing, your Bank might not know just yet about that credit card payment you made. you might not be aware that your Actual balance dipped negative and the bank is assessing you multiple NSF fees. Just checking your online balance at the ATM is just not enough.

How to Reconcile

Reconciliation takes your balance, and adds deposits your bank knows about but you didn’t, and subtracts charges they know about but you didn’t. That gives you a stable and timely balance you can work with.

Then, you take the Bank balance and add deposits you know about but that have not yet cleared the bank and subtract checks, charges, and withdrawals you know about but have not yet hit the bank. This is another stable balance.

The account is Reconciled if both the balances match.

If they don’t match, then you can begin to track down the culprits. That’s a topic for another post.

The Secret to Reconciliation

The secret to a flawless Reconciliation is implied in adjusting the bank balance step. I mentioned deposits and charges that “You Know About”. You need to keep good track of those deposits and charges. It is easiest using one of those manual Check Registers you get with your Checking Account. Mark down every charge to your account, especially Debit and ATM transactions.

Calculate and Adjust your balance after every few transactions just to be sure your balance is positive.

The Benefits?

You get peace of mind knowing you KNOW how much money is in your account. No more head-scratching about whether you understand the balance number you see on that ATM Cash Withdrawal slip.

The biggest Benefit? YOU are in control of your Money, not the other way around. You can only serve ONE Master. Make Money your Slave.


You have a SPENDING Problem.

Ecclesiastes 5:10 – Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.

In all our counseling with couples and individuals in debt trouble, we find that most had simply spent their way into a precarious credit situation. They were not thoughtful about how they spent their income. They had no budget, no discipline, no good habits, no plan. They spent themselves into trouble.

When trouble came in the form of illness, or accident, or layoffs, their financial indiscretions came due. They were “upside down” and did not have enough current income to cover past-due bills.

It seemed like an income problem, but its roots were in past spending.

Spend Less Than You Earn

This is the key to any financial plan. You MUST have a surplus each month, or you will end up in debt. I like to have any Spending Plan end up with “Plus 1”. If you end up the month with only $1 ahead, you are ahead for sure.

The problem with most people is that they count their credit card Payments as spending. They forgot that they Charged MORE than they had. If you can’t pay off your Credit Card bill – in full – each month, you are spending more than you earn.

How does this work?

The credit card companies will gladly extend “credit” to you in exchange for you paying them “interest”. That is their business – earning interest on your purchases. You gladly let them charge you interest because you WANT that something more than you want the money it costs.

Each Billing Cycle, your bill arrives with a Minimum Payment listed for you to pay. In fact, it might be hard for you to locate your actual total due. You THINK that the Credit Card company is giving you a financial break by only making you pay 2-2-1/2% of your balance each month.

“WhooPEE! I have extra money to spend this month!!!”

No. You don’t.

The Penalty of Interest

If you can track down the figures on the bill, you’ll find the “Monthly Service Charge” for the month. If you do some simple arithmetic, and subtract that Service Charge from the Minimum Payment, you’ll be astounded to find that nearly ALL of your minimum payment is in this Interest or Service Charge.


The Credit Card companies are in business to make money. They make it by charging you Interest. They know how to make a LOT of money. When you pay just the minimums, THEY make lots and lots – from YOU. And you LET THEM!

Many studies show that just paying the minimums – without making any more purchases – will take 18-30 years to pay off. Do you even remember what you bought 20 years ago? You’ll be paying for THIS thing for another 20. Is it REALLY Worth it?

AND, you keep on buying and buying and buying, because the Payments are affordable!

As long as you keep on buying, charging, and paying the minimums, you are the Credit Card companies’ FAVORITE Customer. They’ll give you Preferred Status, enlarge your credit limit, give you incentives and gifts and prizes. And YOU love this and keep on doing what THEY want you to do – Buy – Pay Minimums.

The ONLY Way Out

Well, you’ve probably figured out what I am going to say. But, It needs to be said. You can’t keep doing what you’ve always done and expect to get different results.

  1. Stop Adding Purchases to your Credit Cards.
  2. Pay Cash for what you need to buy.
  3. Pay MORE than the Minimum payments on your Credit Card Bills.
  4. Spend Less Than You Earn.

We’ll discuss ways to do all this in future posts.

In the meantime, become aware of just how much you are spending by keeping track for a month. Take a pocket notebook, or piece of paper and just write down Everything you spend for a month. When you are done, add it all up. Did you KNOW this was how much you were spending? YIKES!

Keep your eye on what is going OUT.


I like to keep things simple and straightforward. I usually study a subject for a long time, and then extract the salient principles that sum up the topic. Here is what I’ve learned about managing money, and what I’ll be spending plenty of time expanding upon in the coming months, years, or however long the Lord lets me do this.

  1. Honor God With Your Life.
  2. Spend Less Than You Earn.
  3. Avoid Debt.
  4. Prepare for the Future.

These simple principles have helped countless people gain freedom and control of their finances. You can, too.

1. Honor God with Your Life. Live For the King. If you profess to be a Christian, and Jesus is your Lord, then your life should show the fruit. Your words and deeds should align and be evident to all around you. You can’t serve both God and Money. Choose this day to Serve the Lord.

2. Spend Less Than You Earn. Live FOR the King, not Like a King. The fundamental principle of spending is that if you spend more than you earn, you’ll have trouble. Learn how to live within your means. In money terms, “Faking It Until You Make It” is a recipe for bondage. Adjust your lifestyle to reflect your income, not your outgo.

3. Avoid Debt. Contrary to what some might say, Debt isn’t evil. However, Debt is always a problem. The Borrower is Servant to the Lender. If you are in debt, the lender is in control, not you. You are serving Money, not the Lord. So, if you can avoid debt through prudent planning and saving, hooray. If you can’t, then get OUT as soon as you can. Debt is Never Good.

4. Prepare for the Future. That’s where we’ll be spending the rest of our lives. Yes, this moment in time is NOW, but NOW disappears into the Past. Only the Future lies ahead. Get yourself ready for whatever your future will bring. You can make your own future if you Plan and Act.

Breaking Free from the bondage of Debt is one of the most exhilarating experiences you can have. Knowing that you are debt-free means that you don’t have to fear losing a job, or your house, or your marriage. Being a good steward means that your 90% goes much farther than your previous 110%. This is what you were meant to be – Debt-Free.

You can do it. We can help.