John Jackson discusses what the Scriptures say about debt spending.
We live in the most consumer oriented society in history. The American economy is over 2/3 based on consumer spending. So, there are HUGE incentives from folks out there to have you spend to get more and more.
At the same time, many of us and many in our world have just gotten to the point where we are dying in a mountain of debt. The Bible has a lot to say about that.
Here are 5 little tips that might be helpful to you regarding spending and consumption:
- Nothing is a good deal if you can’t afford it
- God isn’t behind every good deal
- Learn and understand the difference between spending money and saving money
- Resist manipulative advertising
- Know that little things add up
Practical Guidelines to Spending Money (Adapted from Randy Alcorn, Money, Possessions and Eternity, Tyndale House, 1989)
What about debt?
In Leviticus 25, God gives His plan for managing debt. The nation of Israel was told to observe a 7th year rest for all their crops. No contract could be written for longer than 6 years, because on the 7th year, everyone was freed from their obligations. The price of stuff was adjusted. Imagine what your house would cost if you only could finance it for 6 years?! Today, that would be bad for sellers and great for buyers!
- The Bible does not prohibit borrowing. It just doesn’t recommend it.
“The borrower is servant to the lender” (Proverbs 22:7)
The Bible actual encourages people in the NT to be willing to lend; that’s obviously a better position to be in!
Ron Blue (1 of about 5 Christian authors I’ve come to respect) has developed some helpful questions to ask if you are considering debt:
- Does it make economic sense?
- Do my spouse and I have unity about taking on this debt?
- Do I have the spiritual peace of mind or freedom to enter into this debt?
- What personal goals and values am I meeting with this debt that can be met in no other way?
Debt ever o.k.? Many opinions on this subject; some (Burkett) would advocate debt free as the only way to be. It certainly gives maximum freedom. Crown Ministries has a helpful guide:
- The purchases of your home,
- Your business or vocation “possible” debt only if the following 3 criteria are met:
- Item purchases is an asset with potential to appreciate or produce income,
- Value of the item equals or exceeds the amount owed against it, or
- The debt is not so high that repayment puts undue strain on the budget
Debt is dangerous
Debt warning signs:
- You are unable to pay each month’s bills on time
- You pay the minimum amounts required on your credit card bills
- You’ve reached your credit limits on your credit cards
- You have used a cash advance from one credit card to make a payment on others
- You regularly take cash advances on your credit cards to pay routine living expenses such as food, rent, or utilities
- You postdate checks and cover them on payday or with new borrowings
- You have no savings at all
Here’s 3 reasons why debt is dangerous:
- Because the credit limits your freedom to serve Christ by making you a slave to the debt. Like the bumper sticker, “I owe, I owe so off to work I go.”
- It will hinder your prayers, asking God for His direction and provisions.
- You will often miss God’s stored up provisions that He wanted to give you as His child. If God owns everything, He can provide everything you truly need.
I have known personally the "cost” of debt, when it was not just dollars and cents, but peace and security.
The real problem with debt is that the compounding principle works against you rather than for you. Debt effectively mortgages the future.
We have an obligation to repay debts we voluntarily incur.
“..The wicked borrows and does not repay, but the righteous shows mercy and gives” (Psalm 37:21)
Concern about medical and possibly 1-2 other situations:
The paradigm that most of us live with is that debt is essential to life. It is, in fact, the lifeblood of many commercial enterprises. But, today, I want us to look at some of the “cost” of debt in our lives and find a way to help us all become debt free. No investment is as secure as a repaid debt.
I have been involved -- people’s personal financial lives -- multi-million dollar projects -- Christ can take better care of you than credit ever can!
As a rule, it takes 3 generations for a major character trait to be implanted, or replaced, in a family (my note: I’m growing my character for my grandchildren’s sake!)
Can I ever get out of debt? Yes! How?
Stop borrowing money!
Decide that you will get even and then get mad! Well, in Jesus name!
Use the debt snowball (put smallest to largest, disregarding rates, etc). Pay off in order
[Key idea: Snowball debt reduction. Use chart, listing debts in order. Pay off smallest first, regardless of interest rate. Take extra income and put it towards debt—get mad and get even!]
Apply extra monies to debt reduction and to emergency savings
Put “saved” money into savings for large purchases or investments