A Biblical Perspective of Debt
Debt. The ugly “D” word. The very thing that keeps many of us from true financial freedom. The thing that often keeps us from fully trusting and focusing on God. The thing about debt is that it causes us to focus on the anxiety created from the financial burden as well as the shame that comes with it.
I hate that this is the case. I hate that many individuals will be shackled and hamstrung for most, if not all, of their lives because of debt.
Don’t get me wrong. Nothing is outside redemption, especially for the God and His abundant grace. He can redeem anything. The question is if we’ll let Him.
Our culture has done a great job communicating that debt is okay and that it’s “normal”. Society has told us that everyone has debt BUT as long as we have “less” than the average personal then we’re doing alright.
We’ve become desensitized and blinded to the financial, relational, emotional, and spiritual ramifications of carrying debt.
Here are some perspectives that we, as Christians, should cling to.
Note: Debt isn’t sinful but merely a tool. Most of us won’t be able to live this life without utilizing it at some point (e.g. buying a house). The focus should be how we’re using debt and if it’s in a responsible and controlled manner.
The Borrower Is Servant to the Lender
"The rich rules over the poor, and the borrower is servant to the lender."
This is perhaps the most well known scripture and concept that Christians immediately think of whenever it comes to debt and for good reason. Solomon used clear and concise language to describe what it means to be a borrower.
I think this verse provides a powerful visual that’s supposed to be resounding to us. The rich always rule over the poor. The warning is borrowing and subjecting yourself to their power.
To be a financial servant means you’re under the thumb of the lender (bank, credit card company, family member/friend, etc.). You won’t have true financial freedom until that debt is repaid.
Jesus died so that we may experience true freedom BUT many of us find ourselves lacking freedom in entirety due to the financial bondage of debt.
Financial freedom often starts with being debt-free.
Borrowing Money Always Presumes on and Mortgages the Future
“Come now, you who say, ‘Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit’— yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you ought to say, ‘If the Lord wills, we will live and do this or that.’”
James 4:13-15 (ESV)
We’re creatures of habit and so it’s easy for us to make assumptions. It’s easy to assume we’ll go to bed tonight and wake up in the morning because we’ve done it countless times. Because of this bias our judgement is often clouded especially when it comes to borrowing.
We think we know what tomorrow will bring but we don’t know for sure. When we borrow, we believe that we’ll be able to repay that debt in the future assuming our current circumstance will remain the same but life isn’t linear like that. What if our situation changes? If anything we tend to be overly optimistic.
Sure, we’ll likely go to bed tonight and wake up in the morning and everything will be the same. But what about in a week? A year? Five years? The risk increases the longer you have outstanding debt because there’s a higher probability that something will occur in that time frame.
Here’s the thing, presuming on the future has been catastrophic for those that have borrowed too much.
Borrowing also mortgages the future. A mortgage is simply a debt that is backed by an asset and that asset is partially owned by the lender. So to mortgage the future means that your future income and time is owned by the lender. This is the trade off that you’ve negotiated with the lender.
The only way to fully own your future outright is to be debt-free.
Count the Cost Before Borrowing
"For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?"
Luke 14:28 (ESV)
The likelihood that you’ll have to borrow at some point during your life is high. However, the goal should be to consistently reduce the frequency at which you have to borrow and the amount that you borrow until you no longer need to borrow again.
Before every borrowing decision you need to count the cost. You need to count how much it will cost in the form of interest but you also need to count and assess the risk of the borrowing decision as well.
Ask yourself, “What’s the worse thing that could happen should things go sour?” And I would challenge you to take that conversation very seriously and to be honest with yourself and your spouse if applicable.
Too many individuals and families have either failed to count the true cost of borrowing or haven’t been completely truthful with themselves. This is dangerous.
Borrowing, if necessary, should only be done when all information is available and a calculated cost has been determined.
When Borrowing, You Run the Risk of Having Everything Taken Away From You
'“Be not one of those who give pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken from under you?”
Proverbs 22:26-27 (ESV)
As I briefly discussed above, we should always be asking “What’s the worst thing that could happen if I can’t repay this debt?” Some times it involves us losing all that what we have.
For example, if you can’t pay your mortgage then you can expect the bank to foreclose on your home. It’s as simple as that. This happened a lot during the Great Recession (aka the “mortgage meltdown”).
Today, there’s more protection for borrowers than anytime ever before. Certain assets can be shielded from creditors and there are even some chapters of bankruptcy that lessen the impact of defaulting on debt that you owe.
Still, I wouldn’t rely on these protections especially when you can do something about it before you even get to that point.
I know that the financial industry has made borrowing easy and “normal” but just because you can doesn’t mean you should. There are other options and alternatives than the shortest path or the path of least resistance. And I promise you that it will be more fulfilling and worthwhile.
Debt isn’t sinful. It’s only sinful if you don’t have the means or intention to repay what you owe. But it’s heavily warned against because of the precarious position it puts us in. Especially considering that we can largely live without debt being a part of our daily life.
Debt just has a way of complicating our lives to an extent that affects our relationships, faith, and ability to steward well.
One thing is clear, the only way to true financial freedom is through living a debt-free life.
