The Dangers of Debt

My first encounter with debt came when I was 15.  It was fall and my siblings and I needed winter coats, boots and bigger clothes.  Courtesy of Visa, my parents could conveniently get us these things before they had the money for them by charging them to their credit card.  Like so many others, this is what they routinely did and it had always worked to pay it off the next month.

But the next month came and their income was less than half of what it normally was.  The subsequent months were also low.  For the first time they couldn’t pay it off.  They were in debt and paying interest.  My dad had panic attacks and anxiety for the next several months.  It was very stressful.  I didn’t understand how it all worked entirely, but even as a child I felt the guilt of wearing those clothes.  I knew one thing: debt had horrible effects and I never, EVER wanted to be “in debt” to anyone!

In just the past year among my family and close friends my husband and I have seen the following examples played out in people’s lives.  These are REAL people in REAL situations.  Names have been changed to protect their privacy.

  • Eighteen-year-old Curt borrowed money to buy a more expensive than he could afford, but hopefully “more reliable,” car so he could go to school.  When a deer jumped out in front of him on a dark early morning commute, he had an almost-totaled car, no money and a huge debt he still owed to relatives.  (As luck would have it, no full coverage insurance either.)  He had to fix the car or buy a different one, and he had money for neither.  The debt only went up, to the point he owed more than the car was worth.  Then it would need other small repairs or new tires and that month’s payment that should have gone toward the debt would have to go to that instead.
  • Rachel and her husband are working hard to pay down their student loans.  They can live on his income alone, but hers is necessary to pay down the debt faster and be able to save.  But… she’s expecting.  The burden of these student loans are jeopardizing their dream of her being stay at home mom.
  • John and SueAnn want to be in full-time ministry working at a church.  Their exorbitant student loan debt – from a great, but very expensive, Christian college! – is causing stress in their relationship and restricting ministry.  It is overwhelming and hard to see the light at the end of the tunnel when the debt is so big and a ministry-worker’s salary is so small.
  • Josh took out a loan to buy a car, thinking that with his very stable job he would be able to pay it off within a year.  Some very poor life choices cost him his job and now he cannot make those once so-sure payments.
  • Ray co-signed with a partner on some business loans.  The business venture ended up not working out and now he is stuck with a big amount of debt to pay down.  This debt is hampering his dream of working with youth and extravagant giving.
  • Dick and Cindy are a retired couple with an upside down rental on their hands.  The monthly rent is barely enough to cover the payment, let alone repairs and other expenses.  Unfortunately the apartment has too much owed on it yet that they would have a pile of debt either way and so they are slowly taking the hit month by month as it costs them to keep it.

If you think these are rare situations of bad luck, just think back in the last year or two for you and what unexpected expenses popped up (maybe some of those became debts).  And look around at your friends and family – are any of them going through a rough time made worse by having debt?  If some of your friends seem to have a great lifestyle supported by debt, wait 5 or 10 years and see how it’s working out for them then.  (In very rare cases they may still seem to be doing fine… and it also may be that you are just seeing the shiny surface of a false identity – that they have lots of nice things and life is great, but if you knew the whole story you’d see there is a lien on their house, money fights instead of quality communication, lots of stress when the bills come, and their marriage is on the rocks.)

Making a commitment to not use debt is a safeguard from:

  • Buying things you don’t have the money for
  • Buying more car than you can afford
  • The stress if there is a sudden change in income (job loss, injury, medical emergency) and you are unable to make payments
  • Your life choices being restricted because of money owed
  • Dragging a heavy debt load into your marriage
  • God’s money being wasted by being paid in interest to banks
  • Assuming you know how much money God will provide for you in the future (i.e. enough to cover the payments you are taking on)

When money is tight thrift store clothes, hand-me-downs, or even charity clothes may be humbling to wear, but it’s better than a new coat that the bank owns.

Deciding to live without debt is choosing to live within your means.  That’s a smart way to live!

Note:  This has been an entirely practical look at why not to go into debt.  To know why Ben and I believe so strongly on the topic of debt, and are so passionate about encouraging people to be free from debt, read What Does Jesus Say about Debt?

What Does Jesus Say about Debt?

The Bible talks a lot about debt.  The Bible has a lot of warnings against taking out or having debt.  Don’t take my word for it; read God’s Word and gain wisdom.

The Most Powerful Truth Against Debt

In this post I’m not going to list out all the Bible verses on debt.  You have heard the saying before; Actions speak louder than words.  I am going to tell you Jesus’ most powerful argument against debt.

Today I want to tell you a story.

There once was a group of people who were in prison.  They owed a debt they could not pay.  They were slaves in chains awaiting death row.  And then a Man came.  He was a Free Man and wanting all people to be free.  But the debt must be paid.  The Man said, “I will pay the price.  It is my gift to them.  I will give Myself for them.  I will die, so they may go free.”  Those people, they were bought with a price.  The death penalty paid for their debts with blood.  But when an innocent Man dies for the lives of others, he cannot be kept in bondage, and so, He lives.  The people had a new Master; after all, if Someone purchases you, you are theirs.  And the Man says, “Yes, you are Mine.  But I do not want you as slaves.  I am adopting you as My sons and daughters.

This is the story that Jesus told… with his actions.

That, my dear readers, is the most powerful argument against debt by Jesus’ own example.

This is what it’s like to be freed from the biggest debt you will ever owe!  So it begs to be asked: If Jesus cared so much for you, why would he want you in debt ever again?

A free individual, a slave of Christ, in service to only one Master {the King},

Naomi

Related post:  The Dangers of Debt

In case you don’t like following all the links {as I don’t :P}, here are the verses typed out:

23 Now before faith came, we were held captive under the law, imprisoned until the coming faith would be revealed.24 So then, the law was our guardian until Christ came, in order that we might be justified by faith. 25 But now that faith has come, we are no longer under a guardian, 26 for in Christ Jesus you are all sons of God, through faith. 27 For as many of you as were baptized into Christ have put on Christ. 28 There is neither Jew nor Greek, there is neither slave nor free, there is no male and female, for you are all one in Christ Jesus. 29 And if you are Christ’s, then you are Abraham’s offspring, heirs according to promise.  Gal. 3:23-29

18 For, speaking loud boasts of folly, they entice by sensual passions of the flesh those who are barely escaping from those who live in error. 19 They promise them freedom, but they themselves are slaves of corruption. For whatever overcomes a person, to that he is enslaved. 20 For if, after they have escaped the defilements of the world through the knowledge of our Lord and Savior Jesus Christ, they are again entangled in them and overcome, the last state has become worse for them than the first. 21 For it would have been better for them never to have known the way of righteousness than after knowing it to turn back from the holy commandment delivered to them. 22 What the true proverb says has happened to them: “The dog returns to its own vomit, and the sow, after washing herself, returns to wallow in the mire.”  1 Peter 2:18-22

23 For the wages of sin is death, but the free gift of God is eternal life in Christ Jesus our Lord.  Romans 6:23

This is good, and it is pleasing in the sight of God our Savior, who desires all people to be saved and to come to the knowledge of the truth.  1 Tim 2:3-4

13 Christ redeemed us from the curse of the law by becoming a curse for us—for it is written, “Cursed is everyone who is hanged on a tree”—  Gal. 3:13

For by grace you have been saved through faith. And this is not your own doing; it is the gift of God, not a result of works, so that no one may boast.  Eph. 2:8-9

16 For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life.  John 3:16

There is therefore now no condemnation for those who are in Christ Jesus. For the law of the Spirit of life has set you free in Christ Jesus from the law of sin and death. For God has done what the law, weakened by the flesh,could not do. By sending his own Son in the likeness of sinful flesh and for sin,[c] he condemned sin in the flesh, in order that the righteous requirement of the law might be fulfilled in us, who walk not according to the flesh but according to the Spirit.  Rom. 8:1-4

19 Or do you not know that your body is a temple of the Holy Spirit within you, whom you have from God? You are not your own, 20 for you were bought with a price. So glorify God in your body.  1 Cor. 6:19-20

24 He himself bore our sins in his body on the tree, that we might die to sin and live to righteousness. By his wounds you have been healed.  1 Peter 2:24

13 And you, who were dead in your trespasses and the uncircumcision of your flesh, God made alive together with him, having forgiven us all our trespasses, 14 by canceling the record of debt that stood against us with its legal demands. This he set aside, nailing it to the cross.  Col. 2:13-14

But He was wounded for our transgressions,
He was bruised for our iniquities;
The chastisement for our peace was upon Him,
And by His stripes we are healed.  Isaiah 53:5

22 But now that you have been set free from sin and have become slaves of God, the fruit you get leads to sanctification and its end, eternal life.  Rom. 6:22

In the same way we also, when we were children, were enslaved to the elementary principles of the world. But when the fullness of time had come, God sent forth his Son, born of woman, born under the law, to redeem those who were under the law, so that we might receive adoption as sons. And because you are sons, God has sent the Spirit of his Son into our hearts, crying, “Abba! Father!” So you are no longer a slave, but a son, and if a son, then an heir through God.  Gal. 4:3-7

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From the closing…

For freedom Christ has set us free; stand firm therefore, and do not submit again to a yoke of slavery.   13 For you were called to freedom, brothers. Only do not use your freedom as an opportunity for the flesh, but through love serve one another.  Gal. 5:1,13

We know that our old self was crucified with him in order that the body of sin might be brought to nothing, so that we would no longer be enslaved to sin. For one who has died has been set free from sin. Now if we have died with Christ, we believe that we will also live with him. We know that Christ, being raised from the dead, will never die again; death no longer has dominion over him. 10 For the death he died he died to sin, once for all, but the life he lives he lives to God. 11 So you also must consider yourselves dead to sin and alive to God in Christ Jesus.  Rom. 6:6-11

16 Do you not know that if you present yourselves to anyone as obedient slaves, you are slaves of the one whom you obey, either of sin, which leads to death, or of obedience, which leads to righteousness? 17 But thanks be to God, that you who were once slaves of sin have become obedient from the heart to the standard of teaching to which you were committed, 18 and, having been set free from sin, have become slaves of righteousness. 19 I am speaking in human terms, because of your natural limitations. For just as you once presented your members as slaves to impurity and to lawlessness leading to more lawlessness, so now present your members as slaves to righteousness leading to sanctification.  20 For when you were slaves of sin, you were free in regard to righteousness. 21 But what fruit were you getting at that time from the things of which you are now ashamed? For the end of those things is death. 22 But now that you have been set free from sin and have become slaves of God, the fruit you get leads to sanctification and its end, eternal life. 23 For the wages of sin is death, but the free gift of God is eternal life in Christ Jesus our Lord.  Romans 6:16-23

The rich rules over the poor,
    and the borrower is the slave of the lender.  Prov. 22:7

24 No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.  Matt. 6:24

For more on the topic of debt in the Bible, this is a good article by Focus on the Family and this is also good by Christian Personal Finance.