Breaking chains

A hundred years ago, a book like Free and Clear would not have raised many eyebrows. Lenders were much more responsible in extending credit and the principles in Free and Clear, written by Crown Financial Ministries CEO Howard Dayton and published this year by Moody, were common wisdom.

Today, the book is a countercultural manifesto. While mainly a guidebook for getting out of deep debt, Free and Clear's subtitle (God's Road Map to Debt-Free Living) hints at something more: Mr. Dayton also attacks some of the unbiblical attitudes about money and possessions that have led to widespread debt enslavement in the first place.

Written in a conversational style, Free and Clear offers a lot of practical steps for those who are in debt and want out. A "money map" recommends which debts to pay off first; various short chapters show how to create a financial statement, put together a spending plan (by "acting your own wage"), understand a credit score, pay for college, and deal with creditors.

A chapter on the "snowball principle" illustrates how paying a little extra each month toward a loan's principal can dramatically lower the amount of interest a borrower ends up paying. Another chapter suggests types of mortgages to avoid, a chapter many Americans would have benefited from reading during the recent housing boom.

But the book is most revolutionary when it addresses ways to think about money. Why do so many people buy status-symbol cars that they cannot afford? Often pride, and the desire to appear prosperous to others. Why do people go into debt to "keep up with the Joneses"? Because they lack the quality of contentment. Who is the rightful owner of all money? God, and when we recognize that fact "our perspective on money and possessions changes. Every spending decision becomes a spiritual decision."

Ultimately, this context separates Free and Clear from other books on personal finance. It isn't just a "how-to" book. At its best, it's also a "why-to" book.

Balance Sheet

WEALTH: The number of millionaires worldwide has almost doubled since 1996, according to a study released last week by Merrill Lynch and Capgemini. The world now has 8.7 million millionaires, compared to 4.5 million 10 years ago. The study found that North America has the largest population of millionaires with 2.9 million, followed by 2.8 million in Europe. Asia has 2.4 million, while Latin America and the Middle East each have 300,000. About 85,400 persons throughout the world have $30 million or more.

BUSINESS: With a new acquisition, Nestle will help people struggling with its own products. The Swiss chocolate maker announced last week that it would purchase weight-loss pioneer Jenny Craig Inc. for $600 million. The company is following a path trod by Unilever, which in 2000 bought both Ben & Jerry's ice cream and Slim Fast.

HOUSING: More evidence that the housing market is cooling: The Mortgage Bankers Association reported that U.S. mortgage applications dropped 0.8 percent for the week ending June 16. Refinancing applications were down 2.2 percent. The report came as the average interest rate on 30-year fixed-rate mortgages increased to 6.73 percent, its highest rate in four years. Adjustable-rate mortgages accounted for 29.6 percent of all applications, the MBA reports, down from 30.7 percent the week before.