Perhaps no other issue in the personal finance space pits one advocate against another to a greater extent than does the issue of debt.
Proponents on both sides have very clear and passionate answers to questions such as “Should I ever go into debt?”, “Are some kinds of debt good and others bad?” and “Do I really need to get out of debt to succeed financially?” If you dig deep enough you can find someone who agrees with your specific stance on debt.
People of faith are not immune to the debate either. Christians can find justification within the pages of the Bible for what they believe about debt. From “…do good, and lend…” (Luke 6:35) to “Owe no one anything…” (Romans 13:8) people use the Bible to support their financial decisions.
Despite what you may personally believe about debt there is one irrefutable fact though that you need to understand. When it hit home with me, I committed to never go into debt again.
Debt Is About Slavery
What no one can deny is that when you go into debt you position yourself as a servant or slave to the one who lent you the money. If that fact sounds familiar it’s because it does come from the pages of the Bible, specifically Proverbs 22:7 which says,
“The rich rules over the poor and borrower is servant to the lender.
The day I bought an engagement ring on credit my personal financial status changed. Until that point I had not been financially accountable to anyone. There was no lender in my life demanding repayment of any money I had borrowed. When I signed on the dotted line I became a slave to the person who lent me the money.
Saying someone is a slave may sound harsh but that’s the reality.
Further proof of this status can be seen by looking at who holds all the power in the relationship. Who is it? Are the lender and I financial equals? Certainly not. All the power in the financial relationship rests with the lender.
The lender dictates the terms of the loan and how it will be repaid. I have little or no choice with that. If the interest rate is 4.5%, then it’s 4.5%. If payment is due on the 15th of the month then they better have your payment by the 15th
If the lender went crazy and said, “I know I said you had two years to pay that back but I changed my mind…give me all my money tomorrow,” you’d have to oblige. Sure it’s a crazy example of someone turning the tables on the terms of the loan but it reinforces the concept that going into debt backs you into a corner where you are subject to the demands of the lender. It’s a do-what-they-say scenario that requires you to jump through the hoops they create.
That sounds like bondage to me.
Financial Freedom Is the Goal
What Proverbs 22:7 drove home for me was that until I repaid my debts, I was not able to use money in ways that I desired. Each month when my paychecks would come, a significant portion of my salary had to go to pay off my debts. In order to honor my obligation to the lender I had no other choice.
I couldn’t choose to use that money for something else. It was already earmarked for the lender. If I didn’t follow through with the repayment terms I would fall behind and incur even greater financial troubles than just being in debt.
I’ve held all kinds of debt in my life…that first (and only) engagement ring, car debt, student debt, mortgage debt and even business debt. At each time I fully believed all that debt was necessary to move me forward in life or improve my financial status. I didn’t necessarily like it but figured that’s the way society works. You got to play by the rules.
What we value and what we believe can change with age. The things I desired at 25 are not the same now that I’m in my forties. Right now I value complete financial freedom, which is why I’ve worked so hard to achieve that goal. I don’t want to be a slave to any financial institution any more for one simple reason…
Debt blocks me from doing what I really want to do – and what needs to be done – with money.
I don’t want my debt to rob me of special opportunities God might put before me. If He called my name, could I move to another country and do mission work with a $300,000 mortgage on my hands? Probably not until I could wind down that position. If that took months or years the opportunity could be lost.
Furthermore, debt brings with it unnecessary stress, it hinders me from giving generously and it makes unforeseen events (like sickness or casualty) more difficult to deal with. With debt those issues seem insurmountable. Without debt they can be managed.
You may think the Bible sends mixed signals about debt being good or bad. But the Bible is pretty clear on this issue – debt brings financial slavery. Wouldn’t you rather be free?
Questions: What is your view of debt? Has your view changed over the course of your life? Do you feel like a servant to your lender?
I’m actually not religious, but I think anything that convinces people to stay out of debt is great.
Unfortunately, I think some debt will have to be an option at certain points of our lives. Hopefully, by the time our HVAC unit dies in 10-15 years, we will have been able to save up for it incrementally. But that’s $10-15k, and my husband’s disability is being yanked (currently in the appeal process). If we keep getting denied, we’ll have a lot bigger medical bills plus a deductible. That may keep us from being able to save much at all.
Happily, we’ve already saved a good chunk of the $25k that the implants will cost. But things like those keep us from paying off the mortgage early. That $25k would take care of 1/3 of our mortgage! Grumble grumble.
But yes, we’ll do our best to avoid debt whenever possible. That’s about all you can do.
Medical bills can really be a challenge. That’s one reason it’s so important to have adequate insurance (even though it costs so much). I’d rather end up paying a lot now for insurance than run the risk of bankruptcy through a catastrophic health event.
Amen and amen on your article! We have several payments we have to make. I am trying desperately to get them out of my life so that I am no longer held in bondage to the lenders.
I wish we had thought twice about the credit cards. I truly cannot tell you what was bought with them now, only that we are on the hook to pay them off.
“…get them out of my life…” That’s great Annie! I know it probably seems like it’s going to take forever but keep plugging away. The journey can be a tough one but the rewards are so great in the end.
Good article. It IS about freedom, not legalism. I am working hard to pay off my mortgage completely in 3 years and then I’ll be completely finished with debt. However, if I were called to another country to be a missionary, I would just sell my house and go- whether or not it was paid off. So there is still a fair amount of freedom even with a mortgage as long as you aren’t upside down on the house and you are living within your means.
I mainly see getting out of debt as saving money over the long term by avoiding the interest expense which can pile up over the years. And it also can allow flexibility in case of a big unexpected expense such as medical. That flexibility is future flexibility, however, because I’m dumping extra money now to save on the interest expense in the future. Either way, I’m still paying for the house. Just paying less over the long haul by saving on interest and forgoing having money now to be out of debt in the future.
So for me, having emergency savings and living within your means is a more worthy goal than being completely out of debt.
Yes, debt certainly is slavery and bondage. In some circumstances it’s a necessary evil. Part of it though is that our society sets a precedent for us to be in debt. We’re conditioned to believe we have to have the bigger house, the newer car and all the latest and greatest things. We aren’t deemed worthy if we don’t fill the underneath of the Christmas tree with a pile of gifts for the kids. When I read about indigenous people living on some island somewhere who have “nothing” it actually makes me jealous. They have everything….freedom to enjoy their lives without the pressure to have everything. They can just like their life and be……..HAPPY.