A Christian's Guide to Using Debt Wisely
Have you considered how faith influences Christians borrowing money? Debt is a significant part of today's society. There are good and bad times for a Christian to use debt. Thankfully, the Bible does help in determining the wise use of debt.
Before we look at the biblical pros and cons of debt, it is essential to recognize that nowhere in the Bible does it say that debt is a sin. However, several passages in the Bible do discourage debt, especially the irresponsible use of debt. Long ago, the prophets, disciples, and Jesus saw that debt caused impatience, self-indulgence, greed, and fear.
"The wicked borrow and never repay, but the godly are generous givers" (Psalm 37:21) "Just as the rich rule the poor, so the borrower is servant to the lender" (Proverbs 22:7) "Owe nothing to anyone—except for your obligation to love one another" (Romans 13:8)
Furthermore, in the Parable of the Unforgiving Debtor (Matthew 18:21-35), Jesus uses the greed of a debtor to illustrate the significance of how we should forgive each other of our sins.
Conversely, when debt is used to satisfy greed and self-indulgence, it leads to a trap. The apostle Paul addresses greed and self-indulgence in his first letter to his disciple, Timothy, "But people who long to be rich fall into temptation and are trapped by many foolish and harmful desires that plunge them into ruin and destruction" (1 Timothy 6:9, NLT).
Even though Paul's letter was written almost two-thousand years ago, it is still true today. The New York Post recently reported that for Bank of America and JPMorgan, "despite a booming economy, many Americans are having trouble paying credit card bills." Many of these people may be facing the financial ruin and destruction that Paul wrote about because of their unwise and harmful desires.
Here are some of the difficult questions that we all face about borrowing money. What if you see something that you want to buy, perhaps a house, a boat, a motorcycle, or a new car; how are you going to pay for it? What will you do if you want to buy new clothes, jewelry or smartphones for you or your children, but you do not have the cash to buy it? If you want your children to go to college, although you cannot afford the tuition, then what?
When thinking about these questions, Christians must honestly consider that we are not using our own money, because as believers, we know that God created everything and owns everything. By God's generous grace we are given the opportunity to be stewards of a portion of His earthly Kingdom.
As stewards of God's resources, these are four biblically-based steps to follow to help you determine if borrowing money is right for you.
- 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? In other words, am I living in consistency with biblical principles?
- What personal goals and values am I meeting with this debt that can be met in no other way? (R. Blue & M. Blue, 2016)
Only later in life did I come to realize God's grace and my responsibility as a Christian to be a good steward of God's gifts. Many years ago, when I was twenty-three, I wanted to buy a new car. It was not just any car, but an expensive German car. I saw a commercial for the car and was sold before I got to the dealer. I went to a bank and asked for a loan, then got turned down. The car was too expensive, and my income did not justify the purchase. When the salesman called me back, I told him I got turned down for the loan. He said that wasn't a problem, I could pay part of the down payment with my credit card, and they could arrange financing. It turned out to be one of the worst purchases I ever made.
I missed the first step of the four listed above because the purchase did not make economic sense. For step two, although I was not married at the time, now that I know my wife's clear logic, she would certainly have stopped me from making such a foolish purchase. I missed number three because I was not a good steward of God's gifts. I missed number four because the only reason I wanted the car was for self-indulgence. I am fortunate that I have lived to see my mistakes and ask for God's forgiveness.
I ran into a problem that too many people encounter. The problem is not borrowing money. The problem is how spending money makes people feel. The desire to have more is self-indulgence and greed. Sometimes people buy things for themselves or someone else to make them feel better.
Anytime that Christians make a purchase, they should ask themselves is this good debt or bad debt by answering the four questions. The example of my car purchase could have passed all four of the questions above if I had made a purchase that was within my means at the time.
The same self-judgment process can work for any purchase such as buying a house. From 2007 to 2009, the United States went through an economic recession which was primarily caused by a housing loan crisis. Too many people that bought homes failed on most of the four questions listed above. Many of those homebuyers lost their houses because they could not afford to make the payments.
The bottom line is, if you use the knowledge that the Bible offers on debt, you will have fewer financial problems. So if you are trying to make decisions about the best way to pay for a purchase, use the four steps above to be guided toward a Biblical decision.
And if you are already having debt problems, please do not read this as a condemnation of you and your circumstances. We all make mistakes, and we are all sinners. You can begin to improve your credit problems by applying these same biblical principles. No matter how dire you feel your circumstances are, it is not too late to work things out and pray for God's grace and direction.
– Van Richards is a Christian financial advisor as well as the founder of https://www.Advice4LifeInsurance.com and http://www.Advice4Retirement.com. Van draws from his 30 years as a financial advisor to write about financial issues from a Christian perspective. You can contact him at van@advice4lifeinsurance.com.