20 Ways to Waste Your Money - An Excerpt

20 Ways to Waste Your Money - by Erin Burt
Thursday, July 23, 2009
Whether a newbie or seasoned budgeter, nearly everyone has spending holes -- leaks in your budget that drain money with you hardly noticing.

These small drips can add up to big bucks. Once you find the holes and plug them, you'll keep more money in your pocket. That spare cash could be the ticket to finally being able to save, invest, or break your cycle of living paycheck to paycheck.

Here are 20 common ways people waste money. See if any of these sound familiar, and then look for ways to plug your own leaks.


How to waste your money

1. Buy new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose most of their value in the first few years, meaning thousands of dollars down the drain. However, recent used models -- those that are less than five years old -- can be a real value because you get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.

Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)

2. Carry a credit-card balance. If you have a $1,000 balance on a card charging 18%, you blow $180 every year on interest. That's money you could certainly put to better use elsewhere. Get in the habit of paying off your balance in full each month.


3. Buy on impulse. When you buy before you think, you don't give yourself time to shop around for the best price. Resist the urge to make an impulse purchase by giving yourself a cool-off period. Go home and sleep on the decision. If you still want to make the purchase a day or so later, do your comparison shopping, check your budget and go for it. Oftentimes, though, I bet you'll decide you don't need the item after all.

4. Pay to use an ATM. A buck or two here and there may not seem like a big deal. But if you're frequenting ATMs outside your bank's network, the surcharges can add up quickly. Put that money back in your pocket by using ATMs in a surcharge-free network such as Allpoint or Money Pass.

5. Dine out frequently. A habit of spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch and a $4 latte in the morning, and you've got quite a leak. Learn to cook, pack your lunch and brew your coffee at home and you could save a couple hundred bucks each month.

6. Let your money wallow. If you are stashing your savings in your checking account or a traditional bank account, you are wasting money. You could put it in a high-interest online savings account and get paid to save. You can even get an interest-bearing checking account through such reputable companies as Everbank, Charles Schwab, E*Trade and ING Direct.

7. Pay an upfront fee for a mutual fund. Selecting no-load funds can save you more than 5% in sales charges. Of course, no matter how well a fund has done in the past, you can't be sure how it will perform in the future. But if you pay a load, you'll begin the performance derby in the hole to the tune of the load. See the Kiplinger 25 for our favorite no-load funds.

8. Pay too much in taxes on investments. Are you investing in a tax-sheltered 401(k) or Roth IRA? If you're not maxing out those accounts before you invest in a taxable account, you're spending too much.

9. Buy brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands (see Similar Products, Different Prices).

10. Waste electricity. Of the total energy used to run home electronics, 40% is consumed when the appliances are turned off. Appliances with a clock or that operate by remote are typical culprits. The obvious way to pull the plug on your energy vampires is to do just that -- pull the plug. Or buy a device to do it for you, such as a Smart Power Strip ($31 to $44 at www.smarthomeusa.com, which will stop drawing electricity when the gadgets are turned off and pay for itself within a few months.

11. Pay banking fees. Overdraw your checking account and you'll pay $20 to $30 a pop, so it pays to keep tabs on your balance. Plus, are you still paying for a checking account? Free deals abound -- but make sure they're really free. For instance, will the bank charge a fee if your balance drops below a certain level or if you download your info into a personal-finance software program? That's not free.

12. Buy things you don't use. This sounds like a no-brainer to avoid, but how many times have you seen something on sale and thought you couldn't pass it up? Even if something is 50% off, you're spending too much if you don't use it. href=Couponing, for instance, can be a great way to save on your grocery bills. But if you buy things you wouldn't have purchased in the first place simply for the sake of using the coupon, you're wasting your money. The same goes for buying in bulk. A bargain is no bargain if it sits unused on your shelf or gets thrown away.

13. Own an extra car. Okay, so a car is a necessity for most people. But face it -- cars are a huge drain, from their loan payments to insurance fees to gas and maintenance costs. Own more than one car and you'll double or triple those expenses. Ask yourself if that second or third car is really necessary. Are you holding on to an old car for sentimental reasons? Can you or your spouse carpool, take public transportation or bike to work?

14. Ignore your local dollar store. Shopping at the dollar store can be hit-and-miss, but it's not all kitsch or junk. If you know what to buy, you can find some real bargains. For instance, my local dollar store charges 50 cents for greeting cards versus the $3-plus at a drug store or gift shop. (I have a big extended family so I figure this saves me more than $100 per year.) You can also score a deal on cleaning supplies, small kitchen tools, shampoos and soaps, holiday decorations, gift wrap and balloon bouquets.

15. Keep unhealthy habits. Smoking is not only bad for your health, it burns up your cash. A pack-a-day habit at $6 a pack costs $180 a month and $2,190 a year. A junk-food or tanning-bed habit can be costly as well. Not to mention the money you'll waste on medical bills down the road.

16. Be complacent about insurance. Your bill arrives and you pay it without a second thought. When was the last time you shopped around to determine whether you're getting the best deal? Rates vary widely from insurer to insurer and year to year. Reshopping your auto, home or renters insurance might save you hundreds of dollars.

It also pays to evaluate your insurance needs. For instance, upping your out-of-pocket deductible from $250 to $1,000 can save you 15% or more on your car insurance. Consider using the same insurer for your home and auto insurance -- you could snag up to 15% off for a multiple-line policy. And make sure you're not paying for insurance you don't need. For instance, you need life insurance only if someone is financially dependent upon you (such as a child).

17. Give Uncle Sam an interest-free loan. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket -- and put it to work for you -- by adjusting your tax withholding. With a little discipline, you can use that extra cash each month to get started saving or pay down debt (or make ends meet to avoid going into debt in the first place). You can file a new Form W-4 with your employer at any time.

18. Pay for something you can get for free. Dust off your library card and check out books, music and movies for free (or dirt-cheap). Don't pay to receive your credit report when you're allowed to get it at no charge by law. Take advantage of kids-eat-free promotions. And dial 1-800-FREE-411 for free directory assistance.

19. Don't use a flexible-spending account. Your employer may allow you to set aside pretax dollars to pay for medical costs not covered by insurance. You can use the money for expenses such as therapy, contact lenses, insurance co-payments and over-the-counter drugs. You may be able to do the same for child-care costs.

20. Pay for unnecessary services. How many cable channels can a person watch? Do you really need all those extra features for your cell phone? Are you getting your money's worth out of that gym membership? Are you taking full advantage of your subscriptions (such as Netflix, TiVo or magazines)? Take a look at what you're paying for and what your family is actually using. Trim accordingly.

: An Excerpt

How to Spend Like a Frugal Millionaire - An Excerpt

How to Spend Like a Frugal Millionaire

by : Kimberly Palmer,Wednesday May 27, 2009, 10:04 am EDT

Today's guest post comes from Jeff Lehman, author of The Frugal Millionaires.

Saving thousands while still spending.

Millionaires make up just 2 percent of the American (US)population. They get a bad rap during recessions for being wasteful with their money and are frequently used as examples of excess. It's the millionaires that you don't see that you can learn from in times like these. I call them the frugal millionaires and interviewed 70 of them to uncover ways we can all be smarter with money.

Nearly 70 percent of the economy is based on consumer spending. To keep the economy going we need to keep spending but not waste money in the process. This is where the frugal millionaires come in. They've been smart with their money all along and haven't lost it all and had to remake it. These are the kind of people you want to learn from when it comes to spending your money.

Spending philosophy.

Frugal millionaires are unique thinkers when it comes to spending money: 1) they can easily delay their need for gratification when purchasing; 2) they are resourceful in getting what they want by carefully timing their consumer purchases; 3) they make living below their means painless; 4) they don't like wasting anything (especially money); 5) their sense of "self-entitlement" is highly minimized: and 6) spending is OK with them...depending on what they are buying (think: appreciating vs. depreciating assets).


Buying tips.

These millionaires keep more money than they spend, that's why they are rich. Their tactics work for them so they'll work even better for you. Key Point: They don't view shopping as a sport. They shop efficiently and spend their time doing more important things with their lives. Here are their tips that will help you save while spending:

Cars: Buy used (or off lease) fuel-efficient cars, often with "certified pre-owned" warranties. This warranty can be better than a new car, plus the initial depreciation hit is avoided. Drive the car for a long time and never lease it.

Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Bring wine from home and skip dessert. Value food quality over expensive ambience.

Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. Bonus: You can have that extra drink without worrying about getting busted for driving under the influence. Also: buy day-old bread at the best bakery in town and freeze it. Eat oatmeal, because it's the most cost-effective breakfast food. Get a supermarket "club card" and buy food on special. Play the game of trying to see how much of a discount can be saved off the total food bill.

Clothes: When you buy something new donate something used to charity. Buy traditional clothes, but wait for the off-season to acquire them. Go for high quality - not high price. Buy vintage clothing and avoid logo clothing and keep people guessing who the designer might be. Hint: There shouldn't be one!


Consumer Electronics: Buy low-end gear that has the basic functionality of the more expensive stuff. Don't be the first to buy new technology. Wait at least one lifecycle so the bugs are worked out. Buy refurbished electronics whenever possible.

Computers: Buy more mainstream computers with proven technology. Select higher capacity hard drives, a decent amount of RAM (the memory that the program runs in) and a cost effective processor. Super fast doesn't always equal super good...unless you are building airplanes or bridges. Laptops are a good compromise between desktops and netbooks. Don't go through the pain of upgrading operating systems on existing computers, it's not time efficient and you will probably go insane trying.

Going green: Being green and frugal go hand-in-hand. Yet frugal millionaires don't readily fall for the trendy green hype machine. They typically buy green if it helps the environment and lowers their costs. They look at the timeframe when a product can pay for itself. They do use compact fluorescent lighting, turn off lights and equipment that isn't being used, monitor AC and heat usage (with programmable thermostats), drive efficiently, live in "right-sized" homes and turn off the water when they aren't brushing their teeth or washing dishes. Because they have trained themselves to not waste money they won't waste anything else either. They get into good habits and keep them going. You can, too.

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10 Secrets of Millionaires' Money Management
Start early, create a vision, and live frugally
By Kimberly Palmer - Posted April 14, 2009

It turns out millionaires are just like us—but they have a lot more money. When asked about their secrets to success, they don't cite anything magical or rare, but rather the steady application of wise investing strategies, hard work, and, believe it or not, a degree of frugality. Here are 10 secrets of millionaires' money management:

Start early to avoid financial pitfalls.
Adrian Cartwood, 49, author of the blog How to Make 7 Million in 7 Years, made his fortune by living frugally while he built his technology-related business. People often get into trouble, he says, by racking up personal debt early on, which acts as a big drag on their earnings. "Learn how to live within your means and how to delay gratification; these are the habits that you need to maintain on the way up, so you can keep your millions when you get there," he says.

Believe that you can do it.
Before investing in real estate and becoming a millionaire, Alan Corey, author of A Million Bucks by 30, read as many biographies and autobiographies of millionaires as he could find. He says he was searching for a common characteristic that could help him in his own quest. "What I found was they all had an incredible self-belief that they would be financially successful," he says. Corey says that embracing that level of self-confidence helped him get to the top.

Articulate your vision for success.
Jen Smith, author of the Millionaire Mommy Next Door blog, says that the saying, "I want to be rich," is too vague. Instead, she recommends imagining what your ideal life as a millionaire will look like. Smith offers this example: “I want to have $2,000,000 invested so that I can live off of the interest. Then I will quit my job so that I can volunteer, travel, learn to play tennis and watercolor, and enjoy picnics at the beach with my family.”

Smith's vision involved becoming financially-free before becoming a parent. She cut out images from magazines of beautiful places she wanted to visit and people doing fun things and put them near her desk to help her keep that vision in mind.
Insure against life's risks. Bankruptcy is often caused by divorce, a death in the family, or a disability that renders someone unable to work. Conversely, protecting against those risks through insurance protects wealth. In The Quiet Millionaire, financial planner Brett Wilder writes that many people either fail to get adequate insurance or pay too much for it because they don’t understand it.

Work hard—and you'll get lucky.
In his new book, Think Like a Champion, Donald Trump attributes his success to his hard work, which to outsiders often appears to be luck. But Trump says luck only comes from working hard. "If your work pays off, which it most likely will, people might say you're just lucky. Maybe so, because you're lucky enough to have the brains to work hard!" he says. That same concept, of course, was advocated by Benjamin Franklin in the 18th century. He said, "The harder I work, the luckier I get."

Practice smart budgeting.
Smith recommends tracking how much you spend each month, something she does religiously. Every month, she downloads her transactions into a spreadsheet to keep her spending on track. Smith also says that, as prosaic as it sounds, maintaining a good credit score is essential to becoming and staying a millionaire. "A good credit score can save you thousands of dollars over the course of your lifetime," she says.

Do what you love.
Sure, a career in finance might come with a hefty annual salary, but you probably won't excel at something you don't enjoy. That's why Corey recommends going into the field that you find yourself reading about in your spare time. He asks, "Do you read fashion magazines? Get a job in fashion. Do you read gossip blogs? Get a job in celebrity-based enterprises. Do you read Car & Driver? ESPN.com? Yahoo Pets Forum?" Even if the field doesn't seem lucrative, there are ways to make it to the top—something that's more likely to happen if you love it.

Decide how much money you really want.
For many people, $1 million won't be enough. "For most Gen-X and Gen-Yers, retiring with a couple million when they are 65 won't be anywhere near enough to maintain even an average lifestyle, because that little pup called inflation is constantly nipping at your heels as you try to run towards building your own retirement nest-egg," says Cartwood. A more reasonable goal might be $3 million— an amount that Cartwood considers the minimum to be a "bare bones millionaire" these days. Consider your ideal lifestyle and what you would like to be able to fund. A mortgage of a certain size? Exotic vacations? College tuition for your children? Having a concrete goal in mind makes it easier to get there, says Cartwood.

Invest against the grain.
Corey recommends making investment decisions based on the exact opposite of what everyone else is doing. Right now, for example, stocks are relatively cheap because so many people have sold off shares, which means anyone buying can get them at a discount to their values from a year ago. Corey's rule of thumb doesn't just apply to stocks. "Buy a foreclosed house, fill it up with roommates, and you can get a pretty good passive income," he suggests.

Live below your means.
Even Eminem, a celebrity and millionaire, scales back his purchases out of concern for frugality. In February, London's Independent newspaper reported that as Eminem considered buying a $15,000 watch he liked, he started worrying that he should save his money instead. Eminem reportedly said, "I don't want to run out of money; I want my daughter to be able to go to college." And so far, at least, Eminem hasn't fallen victim to the financial challenges so many other stars, from Aretha Franklin to Annie Leibovitz, have faced.

On the same note, Smith says that even though she's a millionaire, no one would know it—and that's the point. She recommends saving at least 10 to 25 percent of your income. She also suggests avoiding buying "status" items, such as fancy sports cars or mansions. After all, bling doesn't make a millionaire—and in fact, too much of it can prevent you from ever becoming one.

How to Save Money When Money Is Tight - Yahoo Finance Excerpt

How to Save Money When Money Is Tight
by Jonathan Burton
Tuesday, March 31, 2009provided byMarketWatch (Yahoo ! Finance)

You can have that latte -- and your cake -- if you make smart spending choices

Like many people nowadays, Christopher Pollard is facing some tough financial challenges. For one, his fiancée recently got laid off. Still, they're both excited about their coming European vacation.

How are they managing that luxury even in these difficult times? Pollard is choosy. A partner in a Minneapolis design studio, he's creative when it comes to saving money. He takes advantage of discounts and deals, thinks about what he's buying and why, itemizes expenses and talks with his fiancée and teenage daughter about their spending and his own.

"Once you get hold of where your money is going, then you can have a better handle on where you want it to go," Pollard said. "It's a mindset. You try to do your best to spend wisely and waste as little as you can."

Becoming a better saver is more than just cutting out the morning latte. It's changing your entire relationship to money. Some 12.5 million Americans were unemployed at the end of February, including 2.9 million who've been jobless for six months or more. From the market's October 2007 peak through January, U.S. shareholders lost almost 85% of the capital gains they'd amassed in stock mutual-funds since 1990. And while stocks rallied in March, we're not out of the woods yet.

It's time to get a grip on your money. Here are five suggestions on where to start:

1. Prioritize

Understandably, it's hard for many families to make ends meet, let alone save. But you might be surprised at what you can accomplish.

Take control of your household budget by logging every dollar you spend in a 30-day period. Once you face a month's worth of grocery receipts, lunch tabs, parking charges, highway tolls, cell-phone and utility bills, mortgage payments, insurance statements and impulsive splurges, you can begin to prioritize expenses and find ways to save.

Think big-ticket. Here's how to save hundreds of dollars a month: Set a higher deductible for home, automobile and health insurance. Refinance your mortgage. If you get a pay raise, use the windfall to trim debt and boost your bank account. After you've established priorities, that $4 latte might be worth it after all.

"At virtually every income level, every lifestyle, there's room for adjustment," said Brian Kompelien, a financial adviser in Minneapolis. "It may not be a quality of life adjustment, but more of a habit change. It's not easy to change habits, but focusing on what you're doing with your money can reveal opportunities to save."

2. Build an emergency fund

Put savings into a special account to be tapped only in a crisis, such as losing a job. You'll want quick access in a pinch, so stick to a high-yield savings account, not a locked-in CD or the stock market. A list of banks offering the nation's highest savings yields is at personal-finance Web site Bankrate.com.

This safety net brings peace of mind and can soothe other parts of your life. How much do you stuff into this cushion? Six months of living expenses is a rule of thumb -- longer if you're self-employed or the family's sole breadwinner, said Greg McBride, a Bankrate.com senior financial analyst.

3. Be creative

"When times get challenging, people get more creative," said Nathan Dungan, founder of Share Save Spend, an educational program that encourages healthy financial habits. "Be more attentive not only to how much you're saving, but where."

The Internet is a great resource. Take advantage of online retailers' discounts posted on shopping Web sites such as CouponCabin.com, DailyDeals.com, RetailMeNot.com and CoolSavings.com. Visit price-comparison sites including Bizrate.com, Shopzilla.com, PriceGrabber.com, BillShrink.com and Google.com's "Product Search" function to find bargains.

You can also save and give at the same time. BiddingforGood.com runs online charity auctions for schools and nonprofit groups nationwide. Donated items often sell well below retail.

4. Pay yourself first

You can't spend what you don't see. Send automatic deductions from your paycheck directly to a savings account -- one not linked to a checking account -- and cover monthly bills with electronic transfers. Even $50 a month of forced savings pads that emergency fund.

Moreover, do all you can to reduce household debt. Eliminating a 14% credit-card interest payment is like getting a 14% risk-free investment return, and lifts a heavy emotional weight as well.

5. Walk the talk

Live by example. Recession sales are everywhere, but you don't have to buy. "You're up against a consumer culture telling you to spend money you don't have," Dungan noted. "Make sure your actions support what you're saying."

Communication is key, especially in these trying, tense times. Talk with your spouse and family about money values and short-term and long-term savings goals, then decide how to fulfill them. These discussions don't have to be lengthy -- just regular. Review expenses and look for new savings avenues every month. Be open and honest, and you'll build a strong base for more than just family finances.
Copyrighted, MarketWatch. All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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Avoiding Recession-Era Faux Pas
by Lauren Sherman - Thursday, April 2, 2009provided byForbes

What not to talk about during the downturn

John Scally isn't a cheapskate, but he felt like one last week.

While visiting an old friend in Portland, Ore., the 39-year-old communications consultant rejected the idea of dining at Ruth's Chris Steakhouse, the restaurant chain where a T-Bone will set you back $41. Instead, Scally suggested a less expensive Italian joint. Afterward, there was a feeling of awkwardness between the two men.

"With times being the way they are and no job safe, I didn't feel right dropping over $100 on dinner," says Scally. His reasoning backfired. "I felt like my friend thought I was being cheap or that I didn't want to have a good time."

Hoang-Uyen N., a 28-year-old advertising executive in Minneapolis, says she's often made to feel uncomfortable by a longtime acquaintance who constantly talks about how much money she makes. "She's always bragging about her latest work bonus, or how she spends without limits," says Hoang-Uyen. "I always wonder, 'Does she even know that we're in a recession?'"

In times of financial trial, socializing gets tricky. Whether you're on Scally's end, trying to save while not looking stingy, or you are one of the fortunate who still has the freedom to spend, it's tough to determine what's appropriate to discuss openly. Indeed, discretionary spending might be down, but it's not dead. There are people out there spending money on everything from beauty creams to eight-course tasting menus. For example, 12.1 million cosmetic plastic surgery procedures were performed in 2008, up 3% from 2007, according to the Arlington Heights, Ill.-based American Society of Plastic Surgeons.

But how do you know what's OK to talk about and what's not?

"Etiquette is really about making people feel comfortable, which means we all have to be a bit more sensitive when talking about money and spending right now," says Cynthia Lett, executive director of the International Society of Protocol and Etiquette Professionals in Silver Spring, Md. "If you're flush enough to go get a facial once a month, that's not something you should discuss, unless you're absolutely positive that the other person is in the same boat."

It's fair to say that recession-era cocktail party conversation should be conducted differently than the banter of the boom years. Casually mentioning that you and your wife recently closed on a second summer home, that you've joined a fractional jet ownership club or that you're planning a private $50,000 African safari vacation this autumn should be avoided.

Unfortunately, for some, that leaves little to say. "Before, everyone was constantly discussing upcoming trips, or how much they were spending on home renovations," says Peter Post, a director at the Emily Post Institute in Burlington, Vt., and author of five books on etiquette.

If you find yourself at a loss for words, Post advises, focus on those around you. Ask them how they're doing, what they've been up to, instead of injecting an anecdote from your latest shopping spree into the conversation.

Regardless of your situation, try not to feel bad about your circumstances. Scally, in eschewing the pricey steakhouse and opting for affordable Italian, did what was right for him, and that's more than acceptable, says Post. "We all have to make choices, and we should try to be a little more understanding in times like these."

Purchases You Shouldn't Talk About Right Now

1. Summer Rentals

Demand is down for summer rentals, which means many properties will be discounted. For example, in parts of Cape Cod, four-bedroom homes that last year went for $15,000 a week can be had for 15% to 20% less. If you plan on taking advantage of the reduced prices, don't make a big deal out of it. Instead, invite your less-fortunate friends down for a weekend of relaxation and inexpensive recreation.

2. Vacations

You're probably still planning at least one vacation for 2009. In fact, 82% of Americans with annual household incomes over $75,000 intend to travel during the first half of 2009, according to a December 2008 survey conducted by marketing firm Y Partnership. However, it's important to be sensitive around those who might be cutting back or skipping a holiday altogether. Only discuss the basic plans for your trip.

3. Spa Treatments

Manicures, pedicures and facials are still popular, according to the International Spa Association, which says that the number of spas operating in the U.S. grew 24%, from 14,600 in 2007 to 18,100 in 2008. However, many consumers have scaled back, visiting the aesthetician every three months instead of once a month. It's best to keep your indulgences to yourself.

4. Jewelry

While some companies in the jewelry industry are faltering--Tiffany, for example, saw a 20% decrease in sales in the last quarter of 2008--the very high end continues to succeed. If a friend inquires about your latest purchase, play down its lavishness.

5. Cars

U.S. sales for Rolls Royce increased by 26.6% over 2008, which means that more of us than ever are investing in these six-figure vehicles. But bragging about your new ride is no longer kosher, because it's likely that many of your friends have traded down in terms of luxury.

Usury - The Bible Version ( An Excerpt)

No Usury to God�s People

Exodus 22:25 says, "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury."

Leviticus 25:35-38 is more specific. It states that we are to relieve our poor brethren, taking no usury or increase from them. Verse 37: "Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase." Why? Verses 38-39, because God brought Israel out of Egyptian slavery. Therefore, we are not to put our brothers into slavery to us. There is to be no increase at all when we loan to our brethren.

You May Lend With Usury to Strangers

However, Deuteronomy 23:19-20 adds another dimension: "Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury. Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury; that the LORD thy God may bless thee in all that thou settest thy hand to in the land whither thou goest to possess it."

Who is your stranger? Who is your brother? In the physical nation of Israel, the Israelites were brothers and Gentiles were strangers. Today, it applies in the spiritual sense: fellow believers are brethren and non-believers are strangers.

Lending can be a blessing, Deuteronomy 28:12, and borrowing a curse, Deuteronomy 28:43-44. Those who are blessed of God will be lending interest-free to their brethren, and even at times with usury to strangers.

Proverbs 28:8, "He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor." Even though some pray and fast, and seem to be following God, they exact all their labor, Isaiah 58:3.

Because people have transgressed God�s laws, the land shall be utterly emptied and spoiled, "as with the lender, so with the borrower; as with the taker of usury, so with the giver of usury to him" Isaiah 24:1-6.

Usury creates ill feeling: "I have neither lent on usury, nor men have lent to me on usury; yet every one of them doth curse me" Jeremiah 15:10.

A mark of a just man is one that "hath not oppressed any, but hath restored to the debtor his pledge, hath spoiled none by violence, hath given his bread to the hungry, and hath covered the naked with a garment; He that hath not given forth upon usury, neither hath taken any increase, that hath withdrawn his hand from iniquity, hath executed true judgment between man and man" Ezekiel 18:7, 8, and also 16-17.

Contrariwise, a mark of an unjust man is one that "hath given forth upon usury, and hath taken increase: shall he then live? he shall not live; he hath done all these abominations; he shall surely die; his blood shall be upon him" Ezekiel 18:13.

In Ezekiel 22, those that have taken usury and increase (verse 12) are placed in the same category as Sabbath breakers, adulterers, those that engage in bribery, and extortion.

Jesus told the publicans to "exact no more than that which is appointed you" Luke 3:12-13.

Does God Require Interest?

The parable of the talents (Matthew 25) and pounds (Luke 19) show the Lord telling the wicked servant, who did nothing with what was given to him, "Thou oughtest therefore [at least] to have put my money to the exchangers, and then at my coming I should have received mine own with usury" Matthew 25:27, and "Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?" Luke 19:23. Modern translations render "usury" as "interest."

Does this mean that God requires interest? In the spiritual sense, yes indeed! The "talents," spiritual gifts given to us from God, are not given for nothing. He expects a return on His investment. God has chosen us and ordained us that we should go and bring forth fruit that remains and lasts, John 15:16.

Mortgage Usury Produces Bondage

Peloubet�s Bible Dictionary, article "Usury" states that the "practice of mortgaging land, sometimes at exorbitant interest grew up among the Jews during the [Babylonian] captivity in direct violation of the law [of God]."

Nehemiah 5:1-13 shows the effect of mortgage usury. Some of the Jews who returned from captivity, had mortgaged their property so that they could buy corn during a drought, and others had borrowed money to pay the King�s tribute, with their property held on mortgage. Those under the yoke of mortgage were under bondage and many had lost their property. Truly as Proverbs 22:7 says, "the borrower is servant to the lender."

Nehemiah was angry when he heard about this. He said "ye exact usury, every one of his brother" Nehemiah 5:7. Calling an assembly to stop this practice, Nehemiah demanded the restoration of foreclosed property, the 1% interest on money charged, along with the produce counted as interest. To do these things to the brethren is a great sin! There should be no increase required.

Is a Little Interest Not Usury?

There are some who say that God only condemns excessive interest. Until recently, laws of several states forbid interest rates above 12%. Anyone who charged more was guilty of "usury."

Even Adam Clarke in his famous Bible Commentary agrees with this view. In his note under Exodus 22:25 he states, "It is evident that what is here said must be understood of accumulated usury, or what we call �compound interest� only; and accordingly neshech is mentioned with and distinguished from tarbith and marbith . . . . �interest� or �simple interest� . . . . Perhaps usury may be more properly defined �unlawful interest,� receiving more for the loan of money than it is really worth and more than the law allows."

Strong�s defines tarbith as "multiplication; i.e., percentage or bonus in addition to principal; increase, unjust gain." The related word marbith can mean "increase, or "interest on capital." Tarbith and marbith do not have the bite or sting as does nashak interest. Tarbith is used along with nashak (usury) in Leviticus 25:36, Proverbs 28:8, Ezekiel 18:8, 13, 17 and 22:12, as is marbith in Leviticus 25:37. The point Clarke misses is that God condemns them both! Any interest or increase from your brother is wrong. However, as we have seen, it is permissible to charge interest to outsiders.

Lend to Your Brother

Because interest or any gain cannot be exacted from one�s brethren, the tendency might be not to lend them anything at all. God commands us to lend to our brethren when they are in need.

Deuteronomy 24:10-13 assumes we will loan [nashak] things to our brethren. When we do, we must not take as pledge anything away from them that will leave them destitute. There is also a responsibility on the borrower to give of some of his time and energy in helping the lender out of thankfulness for the loan.

Deuteronomy 15:1-18 describes the year of release. Every creditor that lends (the word is nashak, "takes usury") unto his neighbor or his brother shall release it at the end of every seven years. If the loan is to a foreigner, it may be exacted again. Verses 7-11 command us to liberally lend to our brethren sufficient for their need, not thinking that we shouldn�t give him anything because the seventh year release is near. This statute adds another dimension to the Bible�s lending law: No loan with a brother is to be for more than a seven year period. It is to be released at the end of the seventh year.

See also Nehemiah 10:31.

A System of Slavery

Debt usury is one of the vilest forms of slavery. Every one that had a creditor (nashak) joined themselves with David, I Samuel 22:1-2. The widow with the oil begged Elisha to help her pay her dead husband�s creditor lest her two sons be taken as bondmen, II Kings 4:1-7.

David prayed that the extortioner (usurer) would seize all that his wicked enemy had, Psalm 109:1-20. On the other hand, God said in a vision to David that his enemy would not exact (extract usury) upon him, Psalm 89:18-24.

The Eternal said to rebellious Judah, "Where is the bill of your mother�s divorcement, whom I have put away? or which of my creditors is it to whom I have sold you? Behold, for your iniquities have ye sold yourselves, and for your transgressions is your mother put away" Isaiah 50:1.

Debt Money the Foundation of Today�s Society

Like Israel of old, today�s Israel has likewise sold herself to her creditors. Interest and debt is the foundation of this world�s economic system, especially the Western world.

Many books and articles have been written about the Federal Reserve system, the Illuminati, the Bilderbergers, Council of Foreign Relations, Tri-Lateral Commission, Rockefeller�s and Rothschild�s, the big bankers who control most of the world through debt money. An excellent simplified short booklet is "Billions For the Bankers � Debts for the People. How Did It Happen?" by Sheldon Emry.

Article 1 of the United States Constitution states that "Congress shall have power to coin money and regulate the value thereof." Instead, since the 1913 Federal Reserve Act, Congress has abdicated this power to a private corporation of bankers, the "Federal" Reserve. No new money ever comes into the economic system without interest and debt.

Here�s how it works: If the Federal Government spends more money than it takes in, say $1,000,000, Congress authorizes the Treasury Department to print $1,000,000 in Federal Reserve notes, which are delivered to the Federal Reserve, which pays the cost of printing, perhaps only $500. The Government receives the paper money in exchange for its agreement to pay it back � with interest.

The government spends the money into circulation which eventually ends up in the hands of banks in the form of deposits. Then the banks of the Federal Reserve System can lend out another $10,000,000 to private and commercial customers with interest. They are required to keep only 10% as reserve. The Federal Reserve Board sets the interest rate charged to the citizens. Neither the chairman nor any of the Reserve Board members are elected. They are appointed by the President. This is an example of how the evil system of usury (debt money) works.

Righteous Lend � At No Interest!

Unlike the usurers who are in charge of this world�s economic system, the righteous will mercifully lend to those in need, expecting no gain or interest. Psalm 37:21, 26 (Living Bible): "Evil men borrow and �cannot pay it back�! But the good man returns what he owes with some extra besides . . . . the godly are able to be generous with their gifts and loans to others, and their children are a blessing." Psalm 112:5, "A good man shows favor, and lends."

Luke 6:27-38 outlines the basic instructions regarding lending: Give to every man that asks of you. If you lend to them of whom you hope to receive, you haven�t performed an act of mercy. As you are merciful to others, God shall be merciful to you. Matthew 5:42, "Give to him that asketh thee, and from him that would borrow of thee turn not thou away." Matthew 6:12, "And forgive us our debts, as we forgive our debtors." Luke 11:4, "And forgive us our sins; for we also forgive every one that is indebted to us." The parable of the unjust steward, Luke 16:1-12, doesn�t show that it is all right to cheat, but that we ought to be faithful in even the little things.

Let us not be like the unmerciful servant, who was forgiven by his master for a huge debt, and refused to forgive a fellowservant who owed him a small debt, Matthew 18:23-35.

Luke 7:41-43 shows that those who are forgiven the most should be the more thankful.

People in Jesus' time tried to get out of debt falsely, saying that unless they swore by the gold of the temple, they didn�t owe a debt, Matthew 23:16.

Those who have pity upon the poor are in reality lending to the Eternal. He will repay them for sure, Proverbs 19:17.

Avoid Debt, or Being Surety For Someone Else�s Debts

Proverbs 22:26-27, "Be not thou one of them that strike hands, or of them that are sureties for debts. If thou hast nothing to pay, why should he take away thy bed from under thee?" See also Proverbs 20:16, 17:18, 6:1-2, 11:15. Judah was surety for Benjamin, Genesis 43:9, 44:32. Job was so down and out that nobody would loan him anything, Job 17:3. We need God to be our surety, Psalms 119:122.

Against Man�s Law Not to Have Interest!

Suppose a Christian brother has a house that he wants to sell to another believer. Attempting to follow God�s law, he wants to sell it under a "no interest" contract. Does the U.S. Internal Revenue Service accept zero interest loans? Believe it or not, NO!

One can initiate a zero interest real estate contract, but the Internal Revenue Service will impute "unstated interest." Recently, the imputed interest rate was ten percent. That is, if you sold a $50,000 house at no stated interest rate and the buyer makes $500 per month payments, you would have to declare interest income at 10% annual rate on the unpaid principal balance.

The Internal Revenue Service under Section 483 of the tax code, says that when there is no stated interest or unreasonably low interest, then in reality there is "interest" that is unstated. Unless one charges the statutory minimum interest rate (recently, 10%) the Internal Revenue Service says you must impute interest up to the minimum. Our whole society is based upon interest. It is illegal NOT to charge interest in today�s society!

Few real estate agents have ever heard of the law forbidding true "no-interest" loans. The fact that such a law exists shows the utter degeneracy of our debt-money society.

Relieving Our Spiritual Debts

Romans 4:4, "Now to him that worketh [tries to gain salvation by works] is the reward not reckoned of grace, but of debt."

Galatians 5:3, "For I testify again to every man that is circumcised, that he is a debtor to do the whole law."

Romans 1:14-15, "I am debtor both to the Greeks, and to the Barbarians; both to the wise, and to the unwise. So, as much as in me is, I am ready to preach the gospel to you that are at Rome also."

Romans 8:12, "Therefore, brethren, we are debtors, not to the flesh, to live after the flesh." Instead, we must be led by the Spirit, verse 14.

The Macedonian and Achaian churches made "a certain contribution for the poor saints which are at Jerusalem. It hath pleased them verily; and their debtors they are. For if the Gentiles have been made partakers of their spiritual things, their duty is also to minister unto them in carnal things" Romans 15:26-27.

We have great spiritual debts that must be paid. Our sins have produced a great liability, or debt: death for all eternity. Unless the penalty is paid, our life will be forever quenched. But, praise the Almighty! The Savior died to set us free from our debt to sin. He rose that we might have a new life free of debt to sin and Satan.

God will forgive us of our debts only as we forgive our debtors, Matthew 6:12. We cannot expect the Eternal to forgive us our debts if we are guilty of usury. Psalms 15 answers the question: who shall dwell in the Lord�s holy hill? He that walks uprightly, does not backbite or do evil to his neighbor, keeps his promises even to his own hurt, puts not his money to usury, nor takes from the needy. He that does these things shall never be moved.

NOTE: We recommend that you obtain the booklet, "Billions For the Bankers: Debts For the People" by Sheldon Emry, by sending $1.50 to: America�s Promise Ministries, P.O. Box 157, Sandpoint, Idaho 83864. W