Living in an economic downturn
Today we’re going to talk about the economy. How many of you have been thinking about this current economic downturn? Anybody worried?
ILL: Rick Majerus, former men’s basketball coach at the University of Utah, expressed what lots of people feel: “Everyone’s worried about the economy this year. Hey, my hairline is in recession, my waistline is in inflation, and altogether, I’m in depression.”
Yesterday’s paper said that the drop in the GNP indicates we’re in the worst recession in 25 years. As this economic downturn worsens, what does God want us to learn, and how does He want us to live?
Offering and announcements:
Life Group sign-ups today-please bring completed form to the umbrella cart in the Commons or the Info Center.
Nicaragua Mission Trip – info meeting on Tuesday night.
Chosen to Lead-orientations next Sunday, February 8, for men’s discipleship program.
It’s been another week of dismal economic news. The jobless and homeless rates are climbing while the Dow is dropping. The House approved an $800 billion stimulus package and the Senate is considering a larger one. No one knows if it will jump start the economy and turn things around. But everyone is talking. Everyone is concerned. How long will this recession last? How deep will it go? And of course, the big question on everyone’s mind, “How will this affect me? Will I lose my job? My house? My retirement?” What is going to happen?
I thought it might be helpful if we talked about this. What can we learn from the current economic downturn? How does God want us to live in an economic downturn? (The word “can” shouldn’t be in there-“how can does”-sheesh!)
Recently, I was listening to a talk Bill Hybels gave to his church on this subject. I found it very helpful, and I’m indebted to him for several of the ideas that I’m about to share with you. So with that tip of the hat to Bill, here we go…
1. Economic downturns are inevitable.
There is an economic cycle: boom then bust, bull then bear, up then down, fat then lean. The economy is not and will never be a static reality. It is always fluctuating, like the tides. Always. Therefore economic downturns are inevitable. They are to be expected.
According to economists, since 1854, the U.S. has encountered 32 cycles of expansions and contractions, with an average of 17 months of contraction and 38 months of expansion. Since 1980, we’ve been through four recessions in the U.S. We’ve also been through some astonishing periods of economic growth. From 1991 to 2000, the U.S. experienced 37 quarters of economic expansion, the longest period of expansion on record.
The economy is not and never has been a static reality. It goes up and down.
Listen to Paul’s words to Timothy:
1 Timothy 6:17 Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.
Don’t put your hope in wealth which is “so uncertain.” The only thing certain about the economy is its uncertainty. The only constant is change. So we ought to expect the change. This change, this cycle has been true in every culture in history.
ILL: Remember the story of Joseph in the book of Genesis. He oversaw the Egyptian economy during one of these cycles: seven years of plenty followed by seven years of want. What happened after the seven years of want? I think it’s safe to assume that the cycle swung back; the lean years ended.
The Great Depression was the worst economic downturn in modern history: personal income, prices and profits all fell by half to two-thirds. What preceded the Great Depression? The Roaring Twenties-a time of unprecedented growth. What followed it? More growth through the 40’s and 50’s.
All through history, economies have cycled through up and down seasons, so downturns are inevitable.
Why is this important? Often when the economy is booming as ours has been, we are lulled into thinking that the boom will last forever, that the line will always go up and to the right, that we’ll always have more tomorrow than today. We enjoy the boom so much that we think it will never end. It always does. Always. What does this suggest? We ought to anticipate the downturn and be ready.
ILL: Think again about Joseph during the seven years of plenty-they were years of great abundance: 28 quarters of economic expansion. It would have been easy to be lulled into thinking, “It will always be like this.” But Joseph knew the downturn was coming and planned accordingly. During each year of the seven years of abundance, he set aside at least 20% of the harvest for the downturn. In other words, he didn’t let Egypt spend all it made or more. He forced them to save for the downturn.
Shortly after the Wall Street Crash of 1929, John D. Rockefeller said, “These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.”
We need to remember during the boom that a bust will come and be ready. We need to remember during the bust that a boom will come and be encouraged.
Economic downturns are inevitable.
2. Economic downturns reveal any weakness in your financial strategies.
ILL: During the big snowfall last month, at least 28 buildings had roofs that collapsed, and many more were damaged. These roofs were fine when the weather was good-no problem last summer when the sun was shining or this fall when it rained a little. But when they got almost six feet of snow on them, when they were put under a load, they gave way. Pressure reveals weakness.
When does the air conditioner in your car go out? Not during the winter when you don’t need it. It’s during the summer when it’s 102 and you’re cooking. It fails when it’s under a load. Pressure reveals weakness.
This is true of almost anything. If you want to test something, put it under a load. Pressure reveals our weaknesses. This is true of our finances as well.
ILL: My bank, Washington Mutual, failed. Do you know why? They created a real estate loan that they advertised as “the only loan you’ll ever need.” Instead of a fixed monthly payment designed to retire the loan, you could adjust your payment each month, choosing one of four payments:
- A fixed 15 year payment: the most.
- A fixed 30 year payment: less.
- An interest only payment: less again.
- A minimum payment (you weren’t even paying off all the interest; what you owed was growing): the least.
Guess what most people did? They bought more house than they could afford, paid the minimum payment, and when house values dropped, they owed more than their house was worth. So they defaulted on the loan. Washington Mutual made 15 million of these loans. Fifteen million stupid loans! This was a fat-years only loan that ignored the fact that downturns are inevitable, that lean years come.
Pressure reveals our weakness. It did it to WaMu and other banks; it will do it to you.
When the economy is good, when your business is growing, the profits are climbing, the stock is rising, the lines are all going up and to the right, your personal financial strategy can look pretty good. You can buy the bigger house with the interest only mortgage, get the new car with that $700 a month payment, and rack up credit card debt like there’s no tomorrow. You can do all that and get away with it in the 7 years of plenty.
But when the downturn hits, the pressure reveals any weaknesses in your financial strategy. Your company downsizes, and you lose your job that your lifestyle depends on. The whole housing market goes upside down, and your house value drops and is now worth less than what you owe on it. Suddenly that interest only or minimum payment loan doesn’t seem like such a great idea. You’re leveraged to the hilt and can’t keep up with the old school loans, the new car loan, the bigger house loan, and several credit cards that are maxed.
Pressure reveals our weaknesses. What we thought we could get away with in the years of plenty often comes home to roost in the years of want.
Economic downturns are inevitable and reveal any weakness in your financial strategy. So let me be Joseph for a moment and suggest a better way.
3. Those who follow God’s financial strategies weather downturns well.
In the Bible, God gives some very simple and sensible strategies for managing your resources. And when we follow God’s financial strategies, we will be able to weather the downturns well. God’s financial strategies work well in any economy. What are these strategies? I’m going to list them and make some brief remarks, but if you want to know more, I recommend that you sign up for Crown Financial Seminar, or Financial Peace University; check at the info center. Or go to our website or to iTunes and download “Blingonomics”. You can subscribe to our podcast. Here are God’s financial strategies.
- Earn honestly. God expects us to earn our living. Proverbs 14:23 says, “All hard work brings a profit.” 1 Timothy 5:18 “The worker deserves his wages.” 2 Thessalonians 3 says we should “earn the bread we eat”. We’re supposed to acquire money the old fashioned way: earn it. The Bible doesn’t put any limit on the amount one can or should earn, as long you earn it honestly. There are many verses that discourage ill-gotten gain, dishonest gain, or unjust gain. Earn as much as you want, but earn it honestly. John Wesley put it this way:
- Get all you can without hurting your soul, your body, or your neighbor. Save all you can, cutting off every needless expense. Give all you can. Be glad to give, and ready to distribute; laying up in store for yourselves a good foundation against the time to come, that you may attain eternal life.
Get all you can without hurting your soul, your body, or your neighbor. That is great advice. Earn honestly.
- Save as much you can. The Bible doesn’t encourage saving in the sense of selfish or fearful hoarding, but it does encourage wise forethought and planning for the future.
Proverbs 6:6-8 Go to the ant, you sluggard; consider its ways and be wise! 7 It has no commander, no overseer or ruler, 8 yet it stores its provisions in summer and gathers its food at harvest.
Learn from the ants! They store up for the lean times. You see this all over in the animal kingdom: squirrels putting away nuts; bears eating 10,000 calories a day before hibernating. The clue phone is ringing! Joseph saved as much as he could during every year of plenty. Look at that Wesley quote again:
o Save all you can, cutting off every needless expense.
You don’t have to spend it all! Save as much as you can.
- Live on less than you make. Obviously, if you are saving all you can and giving all you can, you are living on less than you make. The problem for many of us is that we are not just spending all we make, but we are spending more than we make, and are accumulating debt. A good first step would be to limit your spending to your income: live within your means. But then go a step further and wiser and spend less than what you make: live below your means. By the end of his life, John Wesley earned 1400 pounds a year, a huge amount. He lived on 30 pounds a year and gave the rest away. Live on less than you make. This is the only way you can save for the future and be able to give to others. To do this, you have to say no to yourself sometimes-not always, but sometimes. You have to resist the urge to buy everything you can. Just because I can afford to buy something doesn’t mean I should.
- You don’t have to drive a brand new car.
- You don’t have to have the latest gadget.
- You don’t have to build a bigger house (unless you’re the family who had octuplets…and already had six small kids!).
- You don’t have to eat out every night.
- You don’t have wear the latest fashion.
Just say no! Develop your no muscle! Again, you don’t have to say no all the time, but sometimes you do. If you don’t develop some self-discipline, you may be ok in the years of plenty, but you’ll be in trouble in the years of want. Live on less than you make.
- Avoid debt like the plague. Ann Landers said, “Most of us would be willing to pay as we go if we could just finish paying for where we’ve been.” I’m amazed how many people have mortgaged their future by financing their consumptive lifestyles with credit card debt. It’s not uncommon for people to have several cards maxed out and owe $20, $30, $40,000 or more. We buy things we don’t need with money we don’t have and accumulate debt we can’t pay. Debt has a stranglehold on millions of Americans. They can barely survive in the years of plenty, but they don’t stand a chance in the years of want. Romans 13:8 says, “Owe no one anything except to love one another.” Avoid debt like the plague, except the debt to love others. If you’re going to use credit cards, pay them off every month; otherwise, cut them up. Save and pay cash for that next car; avoid those huge car payments. Avoid debt like the plague.
- Give generously to the poor. Let’s go back to John Wesley once more:
- Give all you can. Be glad to give, and ready to distribute; laying up in store for yourselves a good foundation against the time to come, that you may attain eternal life.
Give all you can. The Bible says this over and over, and has special promises for those who give to the poor.
- Proverbs 19:17 says “He who is kind to the poor lends to the Lord, and he will reward him for what he has done.”
- Proverbs 28:27 says “He who gives to the poor will lack nothing, but he who closes his eyes to them receives many curses.”
- Deuteronomy 15:7 “If there is a poor man among your brothers in any of the towns of the land that the Lord your God is giving you, do not be hardhearted or tightfisted toward your poor brother.”
- Deuteronomy 15:10 “Give generously to him and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to.”
- Jesus often told people to give to the poor, and in Matthew 25 Jesus said that at the final judgment, He will separate the sheep from the goats based on what we did for the least of these.
Give generously to the poor. The only way you can give is if you haven’t spent it all!
- Honor God with your tithe and offering. In both Old and New Testaments, believers honored God by giving him the first tenth of their income, and an offering above and beyond that. There is a wonderful promise attached to honoring God in this way.
- Malachi 3:10-12 “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. 11 I will prevent pests from devouring your crops, and the vines in your fields will not cast their fruit,” says the Lord Almighty. 12 “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty.”
When we honor God by giving to Him first, it is a statement of faith. We are saying, “God, you are my provider. Everything I have is yours. I trust you, and give this back as an expression of my trust, my thanks, and my love.” When the economy goes in the tank, God is still in control and worth trusting. It’s not time to pull back and stop giving, but it’s an opportunity to express your faith in the face of difficulties. Honor God with your tithe and offering.
- Love God and people more than money and things. This deals with attitudes and values. Jesus clearly said that the most important thing in life is to love God with all you’ve got and to love your neighbor as yourself. Love God and love people-that’s most important. More important than money or things. In fact, we are warned against loving money.
- Matthew 6:24 “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.”
You can’t love both God and money. We are to love God and people and use money-never the other way around.
o 1 Timothy 6:9-10 “People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.”
The love of money is a root of all kinds of trouble. Love God and people, not money and things.
- Trust God to provide. Jesus talked about this in Matthew 6:25-33. I think because of all the anxiety people are feeling, it’s important to read this passage. Would you read it out loud with me?
- “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? 26 Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? 27 Who of you by worrying can add a single hour to his life?”
28 “And why do you worry about clothes? See how the lilies of the field grow. They do not labor or spin. 29 Yet I tell you that not even Solomon in all his splendor was dressed like one of these. 30 If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, O you of little faith? 31 So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the pagans run after all these things, and your heavenly Father knows that you need them. 33 But seek first his kingdom and his righteousness, and all these things will be given to you as well.”
You have a Father who cares for you. Don’t worry…your Father knows what you need. Don’t worry…He feeds the birds and clothes the grass of field…He will take care of you. Trust God to provide. It works in any economy.
- Be content. Manufacturers and advertisers hire the brightest people they can to make you discontent. Billions of dollars are spent to make you discontent, to motivate you to buy things you don’t need. One of God’s financial strategies is contentment: learn to be content with what you have. Contentment is the opposite of greed. Greed says, “more!” Contentment says, “enough”.
- 1 Timothy 6:6 But godliness with contentment is great gain.
- Hebrews 13:5-6 Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” 6 So we say with confidence, “The Lord is my helper; I will not be afraid. What can man do to me?”
- Philippians 4:10-13 “I rejoice greatly in the Lord that at last you have renewed your concern for me. Indeed, you have been concerned, but you had no opportunity to show it. 11 I am not saying this because I am in need, for I have learned to be content whatever the circumstances. 12 I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. 13 I can do everything through him who gives me strength.”
We all love to quote that last verse: “I can do everything through him who gives me strength.” But notice that Paul is referring to the ability to be content in any and every situation. Maybe the next time you’re tempted to buy something you don’t need, quote this verse. “I can do everything through him who gives me strength.” I can be content.
Big idea: those who follow God’s financial strategies weather economic downturns well. If you’re doing these, you know what I’m talking about. If you’re not, start now. It works in any economy.
4. Be prepared to help others financially. People are affected differently. Some of you have lost income; some have lost jobs; some have lost their retirement, or a sizeable portion of it. Most likely, many people are more adversely affected than you. There are probably others that have been hit harder than you. Be prepared to help them.
1 Timothy 6:17-19 Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. 18 Command them to do good, to be rich in good deeds, and to be generous and willing to share. 19 In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.
If you have a place to live and food to eat, you are the rich. It’s me Paul is speaking to; and it’s you. Put your hope in God, not wealth which is so uncertain. Do good. Be generous and willing to share. Now is not the time to scale back our benevolence; now is the time to ramp it up. In the early years of Christian history, it was the Christians who took care of widows, who fed the hungry, took in the homeless, and visited the sick. It wasn’t just their own-it was anyone who needed help. And it’s one of the reasons the faith swept across the Roman Empire. We have an opportunity in this downturn to help a lot of people. Let’s be prepared to help.
Especially the poorest of the poor who are always the hardest hit. In a worldwide economic downturn, those most deeply affected are the poor, whose meager safety net is swept away. We may not be able to eat out any more; they may not be able to eat…period. They may go from a half cup of rice, to none at all.
ILL: In the last few months, I received letters from the kids I sponsor through World Vision. They thanked me for giving and sponsoring them, and then said that they have heard of the economic difficulties in the U.S. and were especially glad that I would help even though it might be difficult for me. I almost cried when I read that. Here were kids living in poverty expressing concern for my “economic difficulties”. Friends, compared to them, I don’t have any economic difficulties. I was humbled.
Now is not the time to pull in your hand; now is the time to extend it. Let’s be prepared to help others financially. And finally,
5. Be prepared to help others spiritually. God often uses difficulties to do His work in our lives. How many of you came to Christ during a difficult time in your life. Someone you loved died; you lost your job; you contracted a serious illness; your marriage exploded. Often, these catastrophes get our attention and we start searching for God.
Right now, lots of people in our world are searching. They are searching for God, even if they don’t know they are. You can help them. Keep an eye open for hurting, searching people. Offer to help. Offer to pray. Point them to Jesus.
ILL: This past week, my friend Wayne Cordeiro shared devotions at a meeting I was at in Long Beach. He read from Luke 8:40 where it said that all the people had been waiting for Jesus. He reminded us that everyone is waiting for Jesus. There is a hunger in the human heart. We try to mask it or satisfy it with lots of other things, but it is a hunger for Jesus. Everyone is waiting for Jesus.
That’s never been more true than now. Everyone is waiting for Jesus. Don’t leave them waiting. Be ready to help others find Him.