Church Helps Money Crunch Problem Solving
Life or Debt Program Offers Guidelines for Those Facing Debt
Nov 3, 2008
Reacting to a 70% increase in its website traffic by people facing financial difficulty, the Anglican Church in England came up with a set of guidelines to assist people in debt analysis, problem solving and averting serious financial failure.
The church believes close to seven million people in England face the risk of problem-generating debt.
The church already had at hand the expertise of an expert on money use. John Preston, author of The Money Revolution, is its National Stewardship and Resources Officer.
Debt Spiral Analysis Tool
A key ingredient of the new Life or Debt Program is a tool for determining whether you are on the “debt spiral”. The first question asks if a person has enough savings to survive three weeks if they lose their job. (A surprising corollary is that about 52% of the population could not survive for 17 days without income.)
The next question asks if a person could not afford more than £500 to meet a household emergency without borrowing money. (The statistic: 45% of people say this applies to them in the negative aspect.)
The questions go on:
- Does a person owe money to an energy supplier?
- Is more than 30p of every £1 earned going to debt re-payments?
- Is money being borrowed to help meet housing costs?
Tips for Minimizing Debt Offered
Adding fuel to the problem is, of course, the inflation of fuel and food costs. These unforeseen costs are partially responsible for the fact that regular savings has fallen to a long-term low just at the point where many families are going to need a money cushion.
Several tips are offered. They include:
- Prepare for household emergencies by spending a little now to avoid too much later by repairing rather than replacing broken items; purchase second hand rather than going in debt to purchase new.
- Avoid going into bank account overdraft and expensive fees; try to arrange for overdraft protection in advance unless there is a large fee for this now that credit markets have tightened.
- Check where you are using electricity and gas; try to reduce consumption.
- Add up your debts. It is essential to know where you stand, painful as that may be; you can’t take action until you do this.
- Set spending priorities, making essentials come first, and cut wherever you can.
- Get free advice from consumer credit counseling services.
Debt Relief Ministry
The Church of England is now engaging in debt ministry. Churches interested in developing their own debt ministry can receive from the national church instruction on how to teach debt issues, a Powerpoint presentation of common sense advice, links to organisations that help set up local debt advice centres, and worship service prayers and related materials.
Resources for helping parishioners and other people who have insurmountable debt are available on a special section of the church website.
(A companion article discusses prayers focussed upon debt and financial stewardship.)
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