Debt Decisions

The Intangible Costs of Debt

Typically, when we consider the possible downsides of having debt, our minds focus on the lurking financial consequences, like the amount of interest we’re going to be paying over the length of the loan or how the monthly payment is going to affect our quality of life.  Most people rarely ponder the equally as real, and often more painful, side effects of debt.

We’ve already concluded that God doesn’t categorically forbid us from taking on debt. That being said, we do need to consider Paul’s words in 1 Corinthians 10:23 where he says, “’All things are lawful,’ but not all things are helpful.” While Christians have freedom in Christ, that freedom to make decisions doesn’t always mean our decisions are wise or even in our best interest. We have the freedom to use debt, but we need to walk with caution, always evaluating whether it’s a wise decision.

There are times when debt can have useful applications in our lives and be used for good purposes. For example, debt can help provide urgent medical treatment at the time it is needed and would be otherwise unaffordable. Debt can allow us to make large purchases, such as a house, when we don’t have enough money saved up to buy such an expensive item. We can borrow money to start a business that will provide income for our families and allow us to provide jobs for others as well. We can also see the benefits of micro-lending, where small loans are provided to the poor to help them work and provide for their families. So, it’s probably a bit harsh to say that all debt is evil because that’s not always true.

Relational Impact

The one thing that is always true about debt is the relationship that is established when you borrow money. As we see in Proverbs 22:7, “The rich rule over the poor, and the borrower is servant to the lender”. Servanthood is not a negotiable part of debt. It doesn’t matter if you borrow from a ruthless loan shark or your best friend, you are instantly a servant to that lender when the money changes hands. Debt will continue to alter that relationship until it is paid off and, in most cases, the relationship won’t be the same even after it’s paid back.

Debt’s relational effects don’t stop with the lender either. It can have a tremendous influence on our family lives. Here is a small sampling of the many possible illustrations to show how debt can impact our families:

  • We may hesitate to get married to someone if our spouse-to-be has a large amount of debt that we’re going to inherit on our wedding day.
    • We may choose to delay having children in order to spend more time focusing on our careers and earning additional money to pay off our debts first.
    • A new mother may deny the strong desire to quit her job and stay home to raise her child because she feels their debt load doesn’t provide her the freedom to act on that conviction.
    • There is a high likelihood it will have a negative impact on our marriage. Debt and financial stress continues to be the number one cause of divorce in this country.

While that abbreviated list of consequences should be more than enough to give us pause before taking on debt, the pitfalls don’t stop there.

Spiritual Impact

Here are a few of the ways debt negatively affects our relationship with God:

  • Debt binds us.When we have financial obligations that need to be paid, we suddenly lack the freedom and flexibility to respond to God’s promptings. For example, it’s not easy to move to a new city or take a lower paying job when our budget is already stretched to the limits. I’ve seen new missionaries told they’re not ready to enter the field because of debt and their mission work is put on hold until they can fix the problem.
    • The burden of debt keeps us from listening to God. Most of us would agree that quiet time is an important part of our spiritual lives. However, financial stress is an amazing noise maker. Even if we don’t have collectors calling us up making physical noise in our lives, our minds are burdened by the strain of financial struggles. It can be hard to turn off the noise that debt is creating in order to have effective quiet time with God.
    • Debt stifles our generosity. Debt has a profound way of making us feel like we can’t respond to God’s leading to give even when He provides us with opportunities. If you look at historical statistics, giving by North American churchgoers was actually higher in the struggles of the Great Depression than it is in the affluence of today. There is no doubt a connection between the burden of debt felt by the typical household and the decrease in giving over the last 90 years. When we’re committing so much of our income to paying off purchases of the past, it’s difficult to feel like we have additional money for anything else, regardless of what our heart is telling us. God will still get money where it needs to be, but we’ll unfortunately miss out on the opportunity to be faithful and the blessing of participating in the process.

We always need to remember that debt is not our ultimate provider. It is simply a tool we have at our disposal to use if a situation calls for it, but it also comes with strings attached. While we no longer need to worry about debtor’s prison or slavery-like we see in Matthew 18:23-25, that doesn’t mean debt no longer ruins relationships and destroys families.

In the modern era, debt has found a more alluring way to bring us under its ruling authority. It slowly seduces us into slavery with the promise of our material desires until eventually we no longer have the ability to remove the shackles. At that point, the hooks are set in deep and someone else is directing our life. So, the next time you think about taking out a loan, count the relational and spiritual costs on top of the interest you’ll be paying each month.

Overcoming Emotional Spending

Emotions are often our enemy when it comes to financial decision-making.  Consider for a moment some of the financial choices you regret the most and odds are, emotions played a role in the majority of those decisions.  This is precisely why we need to protect ourselves by developing a process before we find ourselves at the checkout counter ready to throw down a credit card.  Here’s a list of three critical questions you need to anwer before taking on debt for a purchase:

  1.  Why do I need it?  Be honest with yourself.  Is the reason God glorifying or is it selfish?  We all have sinful hearts and need to be aware of our propensity to rationalize our materialistic desires.
  2. Can I afford it?  This is where we have to realize that God isn’t calling us to live a lifestyle that’s beyond our income.  If we’re spending money on things we can’t afford, we’re denying reality and essentially living a lie.  When our normal lifestyle depends on debt to fund it, we can be pretty sure there is a sinful motive behind our spending.

As we explore whether or not we can afford to buy something, we need to also make sure we count all the costs involved.  For instance, when we decide to buy a car, the costs don’t end with the price written on the windshield.  We still have to pay sales tax, buy license plates, insure it, and factor in ongoing maintenance and the price of gas it will take to drive it.

  1. Have I sought counsel?  Proverbs 15:22 tells us that “Plans fail for lack of counsel, but with many advisers they succeed”.  If we’re taking debt as seriously as we should, this step is a no-brainer for any Christian.  It’s so easy to get swept up in our materialistic desires, which makes it especially tough to be objective when we consider whether or not to buy something we want.  We need to surround ourselves with like-minded people that understand the dangers of debt and are willing to tell us when we’re making a bad decision.  Most of us don’t take this step though because we’re afraid we’ll get an answer we don’t want to hear.  There is no reason to fear getting wise counsel because the advice we get will likely be in our best interest.  They may even reveal alternatives we haven’t considered.

Alternatives to Debt

Pausing before taking on debt gives us time to explore what other alternatives might exist.  Here are a few possible ways to consider avoiding debt.

  •  Cut back on other spending– Start by looking at your discretionary spending and cutting back on the things you can do without in order to save up for your need.
  •  Earn additional income– Adding additional income will reduce the need for debt.  Just make sure you’re not sacrificing too much valuable family time.  It should only be for a short season.
  •  Sell something– Most of us have something of value that we wouldn’t miss too much.  Consider turning that item into cash.
  •  Do it cheaper– A few years ago, I purchased a truck for thousands less than it was really worth because of a dent in the rear panel.  Just over $300 later, you couldn’t even tell where it had been and I had the truck I wanted for much less than I would’ve had to pay for one in good condition.
  • Wait– Save up the money to make the purchase with cash in a few months or even years.  Proverbs 19:11 says “a person’s wisdom yields patience”.  Patience protects us from making spontaneous, impulsive decisions that we may later regret.  It gives us time to do research, pray and seek counsel.  Waiting also gives us the opportunity to save up and either avoid debt or come up with a larger down payment.  In the end, patience gives God the opportunity to act and provide us with the things we really need.

Conclusion

We need to be both wise and careful as we navigate this world.  We are constantly bombarded by marketing campaigns designed to sell us something.  The people behind those messages are wise as serpents and know exactly what buttons to push to move us to action.  That’s why it’s essential to evaluate all the costs that come with a new debt and have a process in place that will protect us when our emotions are driving us to act quickly.  You might be surprised at how much your decisions will change by simply giving yourself enough time to settle emotions and evaluate the wisdom of the debt decision.