Participant digital workbook
Study all seven stewardship principles, reflect on what they mean for your church, complete each exercise, assess current practice and prepare your contribution to the church's shared work.
Digital workbook OR-NM-1.0 (prototype) · Seven Principles curriculum version 1.0 — author-review draft pending Leland Rubin's approval prior to publication.
Your progress through the workbook
7 assigned principles, four lessons each, with a rated self-assessment and a 90-day plan for each principle.
0 of 28 exercises written · 0 of 35 areas rated (0%)
Every activity in the printed workbook can be completed here online. Your answers stay saved under your name, and the downloads give you the same complete workbook on paper.
S3 — Eliminate High-Cost Liabilities (principle 3 of 7)
Build a complete inventory of every liability and its true annual cost, rank payoff priority using a documented method, pursue refinancing where responsible, adopt safeguards against new high-cost debt, and offer households a product-neutral, debt-free education pathway.
What this principle produces
High-Cost Liability Elimination Plan
- Complete liability inventory listing every church debt, its balance, rate, term, collateral and true annual cost
- Payoff priority ranking using a documented rate, risk and ministry-impact method
- Record of refinancing or renegotiation attempts, outcomes and any lender correspondence
- Written policy restricting new high-cost borrowing without governing-board approval
- Household-facing debt-free pathway curriculum outline covering credit reports, utilization, payoff methods and predatory-lending avoidance
- Aggregated, de-identified summary of congregational high-cost debt patterns reported to leadership
- List of qualified referral partners for credit counseling, legal aid and tax guidance, reviewed for product-neutrality
- Gaps register listing every open liability, refinancing or education gap discovered during the module
- 90-day action plan assigning each recommended action an owner, due date, resources required, success measure, status and review date
Objectives
- Build a complete, accurate liability inventory with true all-in cost
- Rank liabilities for payoff using rate, risk and ministry impact
- Pursue refinancing or renegotiation on existing liabilities
- Design a recurring, product-neutral debt-free education pathway
4 weeks · about 7 hours of leadership time
Lesson 1: Naming Every Liability and Its True Cost
What you will learn: Build a complete, accurate inventory of every church liability and calculate its true all-in annual cost.
75 minutes · Pastor, treasurer, finance committee, and one or two board members
Scripture lens — Proverbs 22:7
7 The rich ruleth over the poor, and the borrower is servant to the lender.
King James Version (KJV) · Public domain
This proverb names the plain reality that borrowing creates a form of ongoing obligation to the lender, which frames why a complete and honest accounting of every liability matters before any payoff strategy can be built.
Materials and evidence you will use
- All current loan and financing agreements
- Most recent statement for each liability
- Church financial dashboard export showing scheduled debt payments
- Total outstanding balance and total true annual cost calculated
- At least one previously untracked liability identified or confirmed absent
By the end of this lesson, you should be able to
- Every church liability, including smaller notes and vendor financing, is listed with balance, rate and term
- True annual cost, including fees, required insurance and any variable-rate exposure, has been calculated for each liability
- Leadership can state total church debt and total annual interest and fee cost without checking with only one person
- A named owner has been assigned to verify each liability entry against the original loan documents
Study reading
Understand the concept
Your work in this lesson focuses on this outcome: Build a complete, accurate inventory of every church liability and calculate its true all-in annual cost.
A church cannot eliminate debt it has not fully named; today's inventory turns scattered, half-remembered obligations into one honest, verified list with a true total cost.
Why it matters for your church
Small, scattered liabilities can collectively cost more in true annual terms than the single large mortgage everyone already tracks closely.
A church that cannot state its total debt and total annual carrying cost cannot make an informed decision about any new financing request.
Undisclosed personal guarantees put individual leaders at risk in ways the church's own books never reveal.
Examine the evidence
Use All current loan and financing agreements, Most recent statement for each liability, and Church financial dashboard export showing scheduled debt payments to compare your church's present practice with its stated intentions. Look for documented patterns, missing information, and differences between what people assume and what the evidence supports.
Your completed work should be supported by Total outstanding balance and total true annual cost calculated, and At least one previously untracked liability identified or confirmed absent. Record uncertainty honestly so your team knows what still needs to be verified.
Prepare for the shared exercise
Build a single, verified list of every church liability with its true all-in annual cost as the baseline for the rest of the module. The Complete Liability Inventory produces the Complete Liability Inventory with true annual cost calculated for every debt, which contributes to the principle's principal deliverable.
Before working with your team, consider this reflection: What liability, once its true annual cost was calculated today, looked more urgent than I expected before this session?
Key terms
- True annual cost: The stated interest rate on a liability plus any required fees, insurance premiums and variable-rate exposure, expressed as a single annual cost figure.
- Vendor financing: A payment plan extended by a supplier or contractor for equipment or services, often carrying a high effective rate once fees are included, and easy to overlook as debt.
- Personal guarantee: A commitment by an individual leader to personally repay a church debt if the church itself fails to do so, which creates individual risk separate from the church's own balance sheet.
Failure patterns to avoid
- Tracking only the mortgage and a single line of credit while vendor financing and equipment leases go unrecorded
- Using a headline interest rate instead of true annual cost, which hides the real burden of fees and required insurance
- Letting one person's memory serve as the church's liability record instead of verifying against original documents
Ministry case — The Equipment Lease No One Remembered
A midsize congregation, referred to here as an illustrative and explicitly synthetic example, believed its only debt was a building mortgage. When the finance committee built a complete inventory for the first time, they discovered a sound-system financing agreement from three years earlier, still being paid monthly through accounts payable, carrying an effective true annual cost well above the mortgage rate once a service fee and a required equipment-insurance rider were included.
No one had acted in bad faith; the agreement had simply been coded as a recurring vendor bill rather than debt, so it never appeared on any list leadership reviewed. Once named, the committee prioritized it for early payoff in the very next lesson, since a small balance at a high true cost freed up more ministry dollars per payment than expected.
Lesson takeaway: A church cannot eliminate debt it has not fully named; today's inventory turns scattered, half-remembered obligations into one honest, verified list with a true total cost.
Exercise — Complete Liability Inventory (produces: Complete Liability Inventory with true annual cost calculated for every debt)
Build a single, verified list of every church liability with its true all-in annual cost as the baseline for the rest of the module.
- List every church liability, including smaller notes, leases and vendor financing arrangements.
- Record balance, stated rate, term and maturity or renewal date for each.
- Calculate true annual cost for each liability, including fees and required insurance.
- Note any collateral securing each liability and any personal guarantee attached to it.
- Assign a named owner to verify each entry against the original loan document.
- Total the outstanding balance and total true annual cost across all liabilities.
- Record the two totals in plain language at the top of the worksheet. Complete it online
Worksheet columns: Liability · Balance · Stated rate · True annual cost · Collateral / guarantee · Maturity date · Verifying owner
Saves as you typeComplete Liability Inventory
Complete the Complete Liability Inventory with true annual cost calculated for every debt here. Your answers are kept under your name and are waiting for you when you return.
Complete Liability Inventory # Liability Balance Stated rate True annual cost Collateral / guarantee Maturity date Verifying owner 1 2 3 4 5 6 7 8 9 10 Saving keeps it private to you; submitting shares it with your coach and church panel.Worked sample — Riverside Fellowship (illustrative example — not actual church data) (illustrative, scored 18/20)
Riverside Fellowship is a fictional congregation of about 300 attendees used here to illustrate a completed liability inventory.
Total outstanding liabilities: $422,800. Total true annual cost: approximately $24,400. Two of three liabilities carry a true annual cost above ten percent despite representing a small share of total balance.
- Omar T. was assigned to obtain the original vendor financing agreement to confirm the fee structure before the next lesson.
- The board agreed the revolving credit card balance should never again be allowed to carry a balance month to month, pending the safeguards discussed in Lesson 3.
Riverside's team built a complete, verified list and calculated true annual cost carefully for every entry, though the vendor financing fee structure still needed final confirmation from the original document.
BAG Index complementCredit reports and credit scores
A short complement introducing the BAG Index credit reports and credit scores module, giving households a practical framework for reading their own credit report and understanding what drives a credit score, which supports this lesson's work of naming every liability a household or the church carries at its true, current cost.
Teaching points
- • A credit report is a factual record of borrowing history maintained by consumer reporting agencies, and it is different from a credit score, which is a number calculated from that report
- • The largest factors in most credit scoring models are payment history and the amount owed relative to available credit, so late payments and high balances carry the most weight
- • Every household is entitled to review their own credit reports regularly at no cost, and reviewing them is the only reliable way to catch errors or unfamiliar accounts early
- • A single missed payment can affect a score for years, which is why understanding this connection before a liability becomes delinquent matters more than reacting after the fact
- • Disputing an error on a credit report is a household's own right and does not require paying any company to do it on their behalf
Household practice step: Each household completing the BAG Index credit reports module pulls its own current credit reports, reviews them line by line for accuracy, and lists any unfamiliar or incorrect entries to dispute directly with the reporting agency.
Supports this principle: This complement gives households the exact literacy needed to complete an honest, true-cost liability inventory, since an accurate credit report often reveals accounts, balances or missed payments a household had not fully accounted for before this lesson's exercise.
This module explains how credit reporting works in general terms only; it does not recommend, rank or endorse any credit monitoring service, credit repair company or lender, and any household disputing a report error or facing a credit-related legal question should consult a qualified, licensed professional.
Discussion prompts
- Which liability on our list surprised us most once its true annual cost, not just its balance, was calculated?
- Where did we find a liability that was not previously tracked in one central place?
- What would ministry look like with the total annual cost calculated today redirected toward mission instead?
- Who needs to be trained to keep this inventory current going forward, so it does not go stale again?
Reflection: What liability, once its true annual cost was calculated today, looked more urgent than I expected before this session?
Use these prompts to prepare your own response before the group discussion. Honest differences help the church identify where further work is needed.
Lesson 2: Prioritizing Payoff: Rate, Risk and Ministry Impact
What you will learn: Rank every liability for payoff priority using a documented method combining rate, risk and ministry impact.
90 minutes · Pastor, treasurer, finance committee, and a board representative
Scripture lens — Luke 14:28
28 For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?
King James Version (KJV) · Public domain
This passage frames careful counting before action, which connects directly to building a deliberate, calculated payoff order rather than attacking debt in whatever sequence feels most urgent emotionally.
Materials and evidence you will use
- Completed Complete Liability Inventory from Lesson 1
- Current-year budget showing available cash beyond minimum debt payments
- A specific extra-cash source identified for the top-ranked liability
- A named owner assigned to track progress
By the end of this lesson, you should be able to
- Every liability from the inventory has been scored on rate, risk and ministry impact using a consistent method
- A single ranked payoff order exists that leadership agrees reflects the church's true priorities
- Leadership can explain, in one sentence, why the top-ranked liability was ranked above the others
- A plan exists for directing any extra available cash toward the top-ranked liability without neglecting minimum payments elsewhere
Study reading
Understand the concept
Your work in this lesson focuses on this outcome: Rank every liability for payoff priority using a documented method combining rate, risk and ministry impact.
A payoff order built on rate, risk and ministry impact together, rather than on whichever balance feels most urgent, focuses extra payments where they do the most good.
Why it matters for your church
Splitting extra payments thinly across many liabilities delays full payoff on all of them rather than eliminating any single one quickly.
Ignoring a variable-rate liability's rate ceiling can leave a church exposed to a payment shock it never planned for.
A written, shared ranking prevents well-intentioned staff from redirecting extra funds to a different liability without coordination.
Examine the evidence
Use Completed Complete Liability Inventory from Lesson 1, and Current-year budget showing available cash beyond minimum debt payments to compare your church's present practice with its stated intentions. Look for documented patterns, missing information, and differences between what people assume and what the evidence supports.
Your completed work should be supported by A specific extra-cash source identified for the top-ranked liability, and A named owner assigned to track progress. Record uncertainty honestly so your team knows what still needs to be verified.
Prepare for the shared exercise
Rank every liability for payoff priority using a documented method and direct extra payments accordingly. The Payoff Priority Ranking produces the Payoff Priority Ranking using rate, risk and ministry-impact scoring, which contributes to the principle's principal deliverable.
Before working with your team, consider this reflection: What ministry could our top-ranked liability's payment fund once it is fully eliminated, and how does naming that change my urgency about paying it off?
Key terms
- Payoff priority ranking: A documented method for ordering which liability receives extra payments first, based on true cost, risk and ministry impact rather than instinct alone.
- Rate ceiling: The maximum interest rate a variable-rate liability could reach under its contract, used to score risk even when the current rate feels manageable.
- Ministry impact score: A judgment-based score estimating what a specific liability payment, if eliminated, could instead fund in ministry.
Failure patterns to avoid
- Prioritizing the liability with the loudest monthly payment rather than the one with the highest true cost or risk
- Scoring ministry impact so vaguely that every liability seems equally important, which produces no real ranking at all
- Failing to recalculate the ranking after a liability is paid off, so extra payments drift without a clear next target
Ministry case — The Loan Everyone Assumed Was Fine
A fictional, explicitly synthetic congregation used here for illustration had assumed its building mortgage was the obvious top priority simply because it was the largest balance. When the finance committee scored true cost, risk and ministry impact separately, they found the mortgage carried a fixed, moderate rate with no near-term renewal risk, while a smaller equipment loan carried a variable rate approaching its contractual ceiling and was secured by equipment essential to weekly children's ministry programming.
Redirecting extra payments to the smaller, riskier equipment loan first eliminated it within four months, removed the variable-rate exposure entirely, and freed a modest but meaningful monthly amount that the ministry team redirected immediately to program supplies, illustrating exactly the kind of reasoning a documented ranking method is designed to surface.
Lesson takeaway: A payoff order built on rate, risk and ministry impact together, rather than on whichever balance feels most urgent, focuses extra payments where they do the most good.
Exercise — Payoff Priority Ranking (produces: Payoff Priority Ranking using rate, risk and ministry-impact scoring)
Rank every liability for payoff priority using a documented method and direct extra payments accordingly.
- List every liability from the Lesson 1 inventory on the ranking worksheet. Complete it online
- Score each liability on true annual cost using the Lesson 1 figures.
- Score each liability on risk, including collateral, guarantees and rate-ceiling exposure.
- Score each liability on ministry impact using a concrete alternative use of the freed-up payment.
- Combine the three scores into a discussed, agreed final ranked order.
- Identify a specific source of extra cash to direct to the top-ranked liability.
- Assign a named owner to track and report progress on the top-ranked liability.
Worksheet columns: Liability · True cost score · Risk score · Ministry impact score · Final rank · Rationale
Saves as you typePayoff Priority Ranking
Complete the Payoff Priority Ranking using rate, risk and ministry-impact scoring here. Your answers are kept under your name and are waiting for you when you return.
Payoff Priority Ranking # Liability True cost score Risk score Ministry impact score Final rank Rationale 1 2 3 4 5 6 7 8 9 10 Saving keeps it private to you; submitting shares it with your coach and church panel.Worked sample — Riverside Fellowship (illustrative example — not actual church data) (illustrative, scored 19/20)
Continuing the Lesson 1 inventory, Riverside Fellowship's finance committee ranks its three identified liabilities for payoff priority.
Final payoff order: credit card first, sound-system financing second, mortgage held at minimum payments. Extra cash source identified: $3,000 unbudgeted gift applied immediately to the credit card balance.
- The board approved directing an unbudgeted gift of $3,000 entirely to the credit card balance in the current month.
- Janet K. was assigned to report the credit card balance at every finance meeting until it reaches zero, at which point the ranking will be recalculated.
Riverside's team scored all three liabilities on all three factors with clear written rationale and identified a specific, immediate source of extra cash, leaving only minor room to formalize the recalculation trigger in writing.
BAG Index complementCredit utilization and the true cost of revolving balances
A short complement introducing the BAG Index credit utilization module, which explains how carrying a revolving balance compounds cost over time, directly extending this lesson's ranking of liabilities by their true annual cost.
Teaching points
- • Credit utilization is the percentage of available revolving credit currently in use, and it is one of the most heavily weighted factors in most credit scoring models
- • Interest on a revolving balance compounds against whatever is left unpaid each cycle, so paying only a minimum payment can extend payoff time by years and multiply the total cost
- • Keeping utilization low on revolving accounts, even ones being actively paid down, generally supports a stronger credit profile than closing the account entirely
- • A household carrying revolving balances across several accounts is often paying several different rates at once, which is exactly the kind of true-cost comparison this lesson's ranking exercise is designed to surface
- • Requesting a lower rate directly from a current lender is a legitimate, no-cost first step many households never try before assuming refinancing or a new product is the only option
Household practice step: Each household completing the BAG Index credit utilization module calculates the true annual cost of every revolving balance it carries and compares that figure directly against the ranked liability list this lesson produces.
Supports this principle: This complement gives households the specific vocabulary and math behind why revolving, high-utilization debt so often ranks as the costliest liability in this lesson's exercise, reinforcing the church-wide priority of eliminating it first.
This module teaches general credit-utilization mechanics only; it does not recommend any specific card issuer, balance-transfer product or lender, and households considering refinancing or consolidation should consult a qualified, licensed financial or credit professional.
Discussion prompts
- Which liability ranked higher or lower than our initial instinct suggested, and why?
- Where did true cost and risk pull in different directions, and how did we resolve that tension?
- What concrete ministry alternative did we identify for the payment on our top-ranked liability?
- What specific source of extra cash will we direct to the top-ranked liability in the next thirty days?
Reflection: What ministry could our top-ranked liability's payment fund once it is fully eliminated, and how does naming that change my urgency about paying it off?
Use these prompts to prepare your own response before the group discussion. Honest differences help the church identify where further work is needed.
Lesson 3: Refinancing, Renegotiating and Avoiding New High-Cost Debt
What you will learn: Pursue refinancing or renegotiation on existing liabilities and adopt safeguards that prevent new high-cost debt from being incurred.
90 minutes · Pastor, treasurer, finance committee, and legal or financial advisor if available
Scripture lens — Proverbs 15:22
22 Without counsel purposes are disappointed: but in the multitude of counsellors they are established.
King James Version (KJV) · Public domain
This proverb commends seeking multiple sources of counsel before settling a plan, which connects directly to comparing more than one lender or option before refinancing or signing any new financing agreement.
Materials and evidence you will use
- Completed Complete Liability Inventory and Payoff Priority Ranking
- Current market rate information from at least one outside lender or credit union
- True annual cost calculated for every offer compared
- A documented board decision on the benchmarked liability
By the end of this lesson, you should be able to
- At least one liability has been benchmarked against current market terms through an actual lender or vendor inquiry
- A comparison log documents every refinancing or renegotiation option considered and the outcome of each
- A written policy has been drafted requiring board approval above a stated dollar threshold for any new borrowing
- Leadership can name at least two alternatives that must be compared before any future financing is signed
Study reading
Understand the concept
Your work in this lesson focuses on this outcome: Pursue refinancing or renegotiation on existing liabilities and adopt safeguards that prevent new high-cost debt from being incurred.
Regularly benchmarking existing debt and requiring comparison and board approval before signing new debt together close both ends of the high-cost liability problem: what the church already owes and what it might owe next.
Why it matters for your church
A church that never benchmarks its existing debt against current market terms can pay avoidable interest for years without realizing it.
Without a written approval threshold, any single staff member with signing authority can commit the church to new high-cost debt unintentionally.
Failing to log below-threshold agreements immediately allows small vendor financing to disappear from the inventory exactly as it did in Lesson 1.
Examine the evidence
Use Completed Complete Liability Inventory and Payoff Priority Ranking, and Current market rate information from at least one outside lender or credit union to compare your church's present practice with its stated intentions. Look for documented patterns, missing information, and differences between what people assume and what the evidence supports.
Your completed work should be supported by True annual cost calculated for every offer compared, and A documented board decision on the benchmarked liability. Record uncertainty honestly so your team knows what still needs to be verified.
Prepare for the shared exercise
Benchmark at least one liability against current market terms and adopt a written policy preventing future high-cost borrowing without board comparison and approval. The Refinancing and Renegotiation Comparison Log produces the Refinancing and Renegotiation Comparison Log with a written new-debt approval policy, which contributes to the principle's principal deliverable.
Before working with your team, consider this reflection: What assumption about our current lender relationship did today's outreach confirm or overturn, and what does that suggest about other assumptions we have never tested?
Key terms
- Prepayment penalty: A fee charged by some lenders if a loan is paid off or refinanced before its scheduled term ends, which can offset the benefit of refinancing.
- New-debt safeguard policy: A written, board-adopted policy requiring approval above a stated dollar threshold and comparison against alternatives before the church enters any new financing agreement.
- Qualified financial advisor: A licensed accountant, attorney or financial professional whose specific counsel this module points toward for decisions beyond its educational scope, particularly for refinancing of significant size or complexity.
Failure patterns to avoid
- Assuming a long-standing lender relationship means the current rate is already the best available without ever asking
- Refinancing without accounting for a prepayment penalty, which can erase most of the expected savings
- Writing a safeguard policy but never communicating it to the staff members who actually have signing authority
Ministry case — Asking the Question No One Had Asked in Six Years
A fictional, explicitly synthetic congregation used here for illustration had held the same equipment loan for six years without ever contacting another lender for a comparison quote. When the finance committee finally reached out to a local credit union as part of this exercise, they received an offer nearly two full percentage points below the current rate, with no prepayment penalty on the existing loan.
The committee brought both the new offer and a request to match it to their current lender, who agreed to reduce the rate by a smaller but still meaningful amount to retain the relationship. The committee documented both outcomes on the comparison log and adopted a new-debt safeguard policy the same week, closing the exact kind of visibility gap that had let the rate go unchecked for six years.
Lesson takeaway: Regularly benchmarking existing debt and requiring comparison and board approval before signing new debt together close both ends of the high-cost liability problem: what the church already owes and what it might owe next.
Exercise — Refinancing and Renegotiation Comparison Log (produces: Refinancing and Renegotiation Comparison Log with a written new-debt approval policy)
Benchmark at least one liability against current market terms and adopt a written policy preventing future high-cost borrowing without board comparison and approval.
- Select at least one liability from the priority ranking to benchmark against current market terms.
- Confirm current balance, rate and any prepayment penalty before seeking outside quotes.
- Contact at least one outside lender and separately ask the current lender to match or improve terms.
- Record each offer's rate, fees and true annual cost on the comparison log.
- Bring the comparison to the board for a documented decision, whether to refinance, renegotiate, or hold.
- Draft a written new-debt safeguard policy stating a board-approval dollar threshold.
- Confirm the policy requires comparison of at least two alternatives before any future financing is signed.
Worksheet columns: Liability · Current rate / true cost · Lender contacted · Offer / outcome · Prepayment penalty · Board decision
Saves as you typeRefinancing and Renegotiation Comparison Log
Complete the Refinancing and Renegotiation Comparison Log with a written new-debt approval policy here. Your answers are kept under your name and are waiting for you when you return.
Refinancing and Renegotiation Comparison Log # Liability Current rate / true cost Lender contacted Offer / outcome Prepayment penalty Board decision 1 2 3 4 5 6 7 8 Saving keeps it private to you; submitting shares it with your coach and church panel.Worked sample — Riverside Fellowship (illustrative example — not actual church data) (illustrative, scored 19/20)
Riverside Fellowship benchmarks its sound-system vendor financing, the second-ranked liability from Lesson 2, against outside options.
Refinancing reduced the true annual cost on the sound-system liability from 13.1% to approximately 6.9%, and a new $2,500 board-approval threshold now governs all future financing decisions.
- The board approved refinancing the sound-system balance with the community credit union at the improved rate.
- The board adopted a written policy requiring its approval for any new financing above $2,500 and comparison of at least two alternatives before signing.
Riverside's team obtained genuine outside quotes, documented both outcomes clearly, and adopted a specific, actionable safeguard policy, with only minor room to specify how below-threshold agreements will be logged immediately.
BAG Index complementDebt payoff strategies and nonprofit credit counseling
A short complement introducing the BAG Index debt payoff strategies module, comparing the snowball and avalanche methods and explaining how nonprofit credit counseling works, extending this lesson's work on refinancing, renegotiating and avoiding new high-cost debt.
Teaching points
- • The debt snowball method pays off the smallest balance first regardless of interest rate, building early momentum and behavioral confidence before moving to the next-smallest balance
- • The debt avalanche method pays off the highest-interest-rate balance first, minimizing total interest paid over the life of the payoff plan even though early progress can feel slower
- • Neither method is universally correct; a household's choice should weigh its own need for early motivation against its tolerance for a longer path to the lowest total cost
- • Legitimate nonprofit credit counseling agencies offer free or low-cost budget and debt review sessions and can explain options like a debt management plan without requiring large upfront fees
- • A household should be cautious of any company that guarantees debt forgiveness, demands large fees before any service is performed, or discourages contact with actual creditors
Household practice step: Each household completing the BAG Index debt payoff module chooses either the snowball or avalanche method for its own liabilities, writes the resulting payoff order, and researches one legitimate nonprofit credit counseling option available in its area.
Supports this principle: This complement gives households two concrete, research-backed methods for acting on the refinancing and renegotiation work of this lesson, and it equips leadership to point struggling households toward legitimate nonprofit help rather than predatory debt-relief offers.
This module explains general payoff strategies and how to identify legitimate nonprofit credit counseling only; it does not recommend a specific counseling agency, debt settlement company or lender, and households with complex debt should consult a qualified, licensed credit or financial counselor.
Discussion prompts
- What did we learn from actually contacting an outside lender that we would not have learned by assumption alone?
- Where did a prepayment penalty or fee change our thinking about whether to refinance?
- What dollar threshold makes sense for our church's new-debt safeguard policy, and why?
- Who currently has signing authority that this new policy needs to reach immediately?
Reflection: What assumption about our current lender relationship did today's outreach confirm or overturn, and what does that suggest about other assumptions we have never tested?
Use these prompts to prepare your own response before the group discussion. Honest differences help the church identify where further work is needed.
Lesson 4: A Debt-Free Path for the Congregation
What you will learn: Design a recurring, product-neutral debt-free education pathway for households, with qualified referral partners for those in high-cost debt.
90 minutes · Pastor, discipleship or stewardship ministry lead, pastoral care lead, and one board member
Scripture lens — Romans 13:8
8 Owe no man any thing, but to love one another: for he that loveth one another hath fulfilled the law.
King James Version (KJV) · Public domain
This verse names freedom from owing as a general posture worth pursuing, and pairs it directly with love of neighbor, framing debt-free teaching as an act of care for households rather than a moral test.
Materials and evidence you will use
- National Foundation for Credit Counseling or comparable nonprofit credit counseling directory
- Any existing pastoral care intake process for financial hardship
- At least two vetted nonprofit referral partners identified
- A defined aggregated reporting cadence to leadership
By the end of this lesson, you should be able to
- A recurring teaching outline exists covering credit reports, utilization, payoff methods and predatory-lending avoidance
- A vetted list of qualified nonprofit credit counseling, legal aid and tax referral partners has been compiled
- Leadership has agreed on how aggregated, de-identified household debt patterns will be reported without exposing individual households
- A plan exists to connect households in crisis to pastoral care and qualified referral resources rather than informal financial advice from volunteers
Study reading
Understand the concept
Your work in this lesson focuses on this outcome: Design a recurring, product-neutral debt-free education pathway for households, with qualified referral partners for those in high-cost debt.
The same discipline the church applied to its own debt, naming it honestly, prioritizing payoff and safeguarding against new borrowing, becomes a gift to the congregation when taught in a recurring, confidential, product-neutral pathway.
Why it matters for your church
Households trapped in predatory debt often experience shame that keeps them from disclosing the problem until it becomes a crisis the church only learns about too late.
A church that gives informal financial advice through well-meaning volunteers, rather than referring to qualified professionals, risks giving inaccurate or even harmful guidance.
Benevolence given without a referral to address the underlying debt pattern can unintentionally fund another cycle through the same predatory product.
Examine the evidence
Use National Foundation for Credit Counseling or comparable nonprofit credit counseling directory, and Any existing pastoral care intake process for financial hardship to compare your church's present practice with its stated intentions. Look for documented patterns, missing information, and differences between what people assume and what the evidence supports.
Your completed work should be supported by At least two vetted nonprofit referral partners identified, and A defined aggregated reporting cadence to leadership. Record uncertainty honestly so your team knows what still needs to be verified.
Prepare for the shared exercise
Design a recurring, product-neutral debt-free teaching pathway and a vetted referral partner list for households carrying high-cost debt. The Congregation Debt-Free Pathway Outline produces the Congregation Debt-Free Pathway Outline with referral partner list, which contributes to the principle's principal deliverable.
Before working with your team, consider this reflection: What would change in how households experience our church if seeking help for a debt problem felt as normal and safe as asking for prayer?
Key terms
- Credit utilization: The share of available revolving credit currently in use, one of the largest factors in a credit score and a key driver of compounding interest cost on carried balances.
- Snowball and avalanche methods: Two common debt payoff methods: snowball pays off the smallest balance first for motivation, while avalanche pays off the highest-rate balance first to minimize total interest paid.
- Predatory lending: Lending products such as payday loans, title loans, rent-to-own agreements and refund-advance products that carry extremely high effective costs and disproportionately target financially vulnerable households.
Failure patterns to avoid
- Naming a specific for-profit debt-settlement company or credit product from the stage, which functions as an unintended endorsement
- Treating a single one-time class as sufficient rather than building a recurring, standing pathway
- Allowing individual household financial details to circulate among leadership rather than staying confidential to pastoral care and being reported only in aggregate
Ministry case — The Series That Uncovered a Quiet Pattern
A fictional, explicitly synthetic congregation used here for illustration launched its first product-neutral debt-free teaching series expecting modest interest. Instead, the confidential intake conversations that followed revealed, in aggregate only, that a noticeable cluster of households had turned to rent-to-own furniture agreements after a local retailer closed a traditional financing option, a pattern leadership had never known existed because no one had ever asked in a structured, confidential way.
Rather than naming any household, the pastoral care team used the aggregated pattern to invite a qualified nonprofit credit counseling agency to hold a dedicated session on rent-to-own alternatives, and the church's resource table began stocking that agency's plain-language handout on the topic, all without ever disclosing which households had been affected.
Lesson takeaway: The same discipline the church applied to its own debt, naming it honestly, prioritizing payoff and safeguarding against new borrowing, becomes a gift to the congregation when taught in a recurring, confidential, product-neutral pathway.
Exercise — Congregation Debt-Free Pathway Outline (produces: Congregation Debt-Free Pathway Outline with referral partner list)
Design a recurring, product-neutral debt-free teaching pathway and a vetted referral partner list for households carrying high-cost debt.
- Draft a one-paragraph teaching summary for each of the four core topics.
- Identify what a household should be able to do differently after each teaching session.
- Confirm the teaching format and recurring cadence for the pathway.
- Research and vet at least two qualified nonprofit credit counseling agencies for referral.
- Add at least one legal aid and one free tax preparation resource to the referral list.
- Agree on the confidential intake step for households disclosing a debt crisis.
- Define what aggregated, de-identified summary leadership will receive and how often.
Worksheet columns: Topic / partner · Teaching summary or referral scope · Format · Confidentiality safeguard · Owner · Review cadence
Saves as you typeCongregation Debt-Free Pathway Outline
Complete the Congregation Debt-Free Pathway Outline with referral partner list here. Your answers are kept under your name and are waiting for you when you return.
Congregation Debt-Free Pathway Outline # Topic / partner Teaching summary or referral scope Format Confidentiality safeguard Owner Review cadence 1 2 3 4 5 6 7 8 Saving keeps it private to you; submitting shares it with your coach and church panel.Worked sample — Riverside Fellowship (illustrative example — not actual church data) (illustrative, scored 18/20)
Riverside Fellowship designs its first Congregation Debt-Free Pathway, building on the discipline it applied to its own liabilities in Lessons 1 through 3.
Congregation Debt-Free Pathway: quarterly four-part series covering credit reports, utilization, payoff methods and predatory-lending awareness, backed by two vetted nonprofit credit counseling referrals and a confidential pastoral-care intake process, with aggregated reporting to leadership twice yearly.
- The board approved a standing quarterly four-part series starting in the next ministry calendar quarter.
- Marcus D. was assigned to compile an aggregated, de-identified referral summary for leadership twice a year.
Riverside's team built a complete, confidentiality-respecting pathway with vetted referral partners and a clear reporting cadence, with only minor room to specify the legal aid resource in full detail.
BAG Index complementPredatory lending, fraud and identity theft
A short complement introducing the BAG Index predatory lending and fraud protection module, helping households recognize high-cost lending traps and common fraud and identity-theft tactics, extending this lesson's work toward a debt-free path for the congregation.
Teaching points
- • Predatory lending often features very short repayment windows, extremely high effective annual rates, and pressure to borrow again immediately after repaying, trapping households in repeat cycles of debt
- • Common warning signs of a predatory loan include fees disguised as 'processing' or 'insurance' charges, refusal to disclose a clear annual percentage rate, and lenders who discourage households from reading the full agreement
- • Identity theft often begins with a stolen Social Security number, a data breach, or a phishing message impersonating a trusted institution, and early detection depends on reviewing statements and credit reports regularly
- • A household that suspects fraud should place a fraud alert or freeze with the credit reporting agencies, contact affected institutions directly, and file a report with the appropriate consumer protection authority
- • Church leaders can create a safe, shame-free pathway for households to disclose a predatory loan or fraud situation, referring them toward legitimate nonprofit and legal resources rather than judgment
Household practice step: Each household completing the BAG Index predatory lending and fraud module reviews one current loan agreement or recent statement for warning signs, and confirms it knows the correct first steps to take if it ever suspects fraud or identity theft.
Supports this principle: This complement directly protects the debt-free path this lesson is building, since a congregation that understands predatory lending and fraud is far less likely to fall back into high-cost debt even after existing liabilities are eliminated.
This module teaches general warning signs and protective steps only; it does not name or accuse any specific lender, and any household facing a suspected predatory loan, fraud or identity theft situation should be referred to a qualified, licensed legal professional or the appropriate consumer protection authority.
Discussion prompts
- What currently makes it hard or easy for a household to disclose a debt problem at our church?
- Which of the four core teaching topics feels most urgent for our specific congregation right now?
- How will we make sure no specific financial product or company is ever endorsed from the stage?
- What would a healthy, private intake process for a household in crisis look like here, step by step?
Reflection: What would change in how households experience our church if seeking help for a debt problem felt as normal and safe as asking for prayer?
Use these prompts to prepare your own response before the group discussion. Honest differences help the church identify where further work is needed.
Rate this principle
Rate each area from 0 to 4 as the church is today, not as you hope it will be.
- 0 — Not Established: Nothing is in place for this area today.
- 1 — Emerging: Something has been started but it is informal and inconsistent.
- 2 — Developing: It works in parts of the church but is not documented or dependable.
- 3 — Established: It is documented, consistently followed and reviewed.
- 4 — Exemplary: It is a strength others could learn from, with evidence to prove it.
1. Liability Visibility
Weighted 20% of the Eliminate High-Cost Liabilities score.
What this represents: Every liability is listed with balance, rate, term, collateral and true annual cost, reviewed by leadership at least twice a year.
Reference points for your rating
- 0 — Not established:
- No complete list of church liabilities exists, and leadership cannot state total debt, average rate or total annual interest cost.
- 2 — Developing:
- Most liabilities are listed with balances, but true all-in annual cost including fees and insurance requirements has not been calculated for each.
- 4 — Exemplary:
- The liability inventory is a living document updated whenever terms change, reviewed quarterly, and used directly to drive payoff and refinancing decisions.
Use the closest reference point, then select 1 or 3 when your church falls between two descriptions.
2. Payoff Prioritization
Weighted 20% of the Eliminate High-Cost Liabilities score.
What this represents: A documented rate, risk and ministry-impact method ranks every liability, and extra payments are directed according to that ranking.
Reference points for your rating
- 0 — Not established:
- Debts are paid down in whatever order feels most urgent, with no documented method connecting rate, risk or ministry impact to the order chosen.
- 2 — Developing:
- A ranking method has been applied once, but it has not been revisited since balances and rates changed.
- 4 — Exemplary:
- The ranking is recalculated whenever a balance, rate or ministry priority changes, and leadership can explain, in one sentence, why each dollar of extra payment goes where it goes.
Use the closest reference point, then select 1 or 3 when your church falls between two descriptions.
3. Refinancing and Renegotiation Discipline
Weighted 20% of the Eliminate High-Cost Liabilities score.
What this represents: Refinancing and renegotiation options are documented and compared using consistent criteria, with outcomes recorded for the record.
Reference points for your rating
- 0 — Not established:
- No refinancing or renegotiation has ever been attempted on any high-cost liability, even where clearly favorable terms may exist elsewhere.
- 2 — Developing:
- At least one refinancing inquiry has been made, but the outcome was not documented or compared systematically against other options.
- 4 — Exemplary:
- Refinancing and renegotiation are reviewed on a standing schedule tied to rate-environment changes, and every material liability has been benchmarked against current market terms within the last year.
Use the closest reference point, then select 1 or 3 when your church falls between two descriptions.
4. New-Debt Safeguards
Weighted 20% of the Eliminate High-Cost Liabilities score.
What this represents: A written, board-adopted policy requires approval above a clear dollar threshold for any new borrowing, and it is consistently followed.
Reference points for your rating
- 0 — Not established:
- Any staff member or leader with signing authority can enter the church into new financing with no board review or dollar threshold.
- 2 — Developing:
- A written policy exists requiring board approval above a threshold, but it is inconsistently followed.
- 4 — Exemplary:
- The policy is followed without exception, is reviewed annually, and is paired with a standing practice of comparing any proposed financing against at least two alternatives before signing.
Use the closest reference point, then select 1 or 3 when your church falls between two descriptions.
5. Household Debt-Free Education
Weighted 20% of the Eliminate High-Cost Liabilities score.
What this represents: A recurring, product-neutral debt-free education pathway is offered with documented referral pathways to qualified, vetted counseling and legal resources.
Reference points for your rating
- 0 — Not established:
- No congregation-facing teaching or resource on high-cost debt, credit or predatory lending has ever been offered.
- 2 — Developing:
- A recurring teaching series exists, but it lacks referral pathways to qualified nonprofit credit counseling or legal aid.
- 4 — Exemplary:
- The pathway is offered on a standing calendar, tracked in aggregate for participation and outcomes, refined based on household feedback, and integrated with pastoral care follow-up for households in crisis.
Use the closest reference point, then select 1 or 3 when your church falls between two descriptions.
90-day plan for Eliminate High-Cost Liabilities
Name the first three moves, who owns each one and when it is due.
Completion checklist
- • All four lessons marked complete
- • All four exercises submitted
- • Required evidence uploaded
- • Named principal deliverable generated and approved
- • 90-day action plan created with owners and dates
- • Coach review recorded
0 of 4 exercises written · 0 of 5 areas rated
Leland Rubin
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Participant Workbook
Sample contents created by Allan Bell - CPA, CMA, MBA, for illustrative purposes.
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A partnership between Leland Rubin, creator of the Seven Stewardship Principles, and Allan Bell - CPA, CMA, MBA, Nsites founder and creator.