Successful Money Management for Christians Lesson Seven
Successful Money Management for Christians
Lesson
Seven
“The
Necessity Of Dealing With Debt”
“The
rich rules over the poor, and the borrower is servant (slave) to the
lender.”
(Proverbs 22:7)
We
are reminded by the inspired (James 2:6) that the rich
oppress people and drag them into court to force them to pay their due
debts. The admonition in Romans 13:8 to “owe
no man anything,” is one of those special worded passages, an
unusual phrase, that de-emphasizes the first in order to emphasize the
second thought. It simply means to pay your debts when they come
due….let no debt remain outstanding. But the wise man in Proverbs is
telling us that going into debt has its “minuses.” It is obvious that
debt affects the debtor, he has to pay interest on the money he borrows.
But there is more, he loses a part of his freedom. The song, “I
owe my soul to the company store,” says it loud and clear!
Debt
plagues many families. It has been estimated that as high as 80 percent of
families in this country are in debt in excess of what they can really
afford! This has to put a terrible strain on the marital relationship.
Easy credit (Credit Cards) has probably contributed far more than its
share to family debts. But debt itself is not wrong. It is the purpose of
debt that needs to be looked at closely. Debt may be a symptom of deeper
problems: selfishness, greed, self-indulgence, impatience, poor
self-image, lack of self-worth, lack of self-discipline, etc. Debt, simply
defined, is “Borrowing to buy now with intent to pay later.” It is a
promise to make payments until the debt is paid off. This is the reason
for the admonition in Romans 13:8….pay your debts when
they come due!
A
CLOSER LOOK AT DEBT
If
debt was only borrowing some money and paying it back each week or month
until the borrowed amount is repaid, it wouldn’t be so bad. But as we
all know, it is more than that…..it is a form of bondage until the debt
is paid off (Proverbs 22:7). We have to pay interest, some
times high interest, on the money borrowed. Thus, debt not only reduces
one’s total spendable income, but robs him of the benefits of his
laboring. Interest is generally lost money. It is lost money that could
have been saved for the future.
There
are different kinds of debts: Credit card debts, Consumer debts, Mortgage
debt, Investment debts, Business debt. In case of an emergency debt may be
a necessity for us. Business loans can keep a business going until it can
get on its feet again in order to provide a living for the owner. Buying a
house through a monthly mortgage may be wiser than renting. There may be
times when a person can borrow money at low interest and invest it in
something that will pay higher dividends than the interest he is being
charged. There are legitimate reasons for debt when used wisely. We need
to evaluate before making debts by asking such questions as: (1) Does it
make good economic sense? (2) Are we (married couple) in agreement about
taking on debt? (3) Can we have spiritual peace of mind over this debt?
(4) Am I meeting my financial goals with this debt? (5) Why am I going
into debt? We also must remember, as a Christian, we are honor bound to
pay our debts. Not to pay is dishonesty and a form of greed.
UNWISE
DEBT
It
has been said that debt is “People buying things they don’t need, with
money they don’t have, to impress neighbors who don’t care.” There
can be many reasons why people make unwise debts. The following are a few
to illustrate:
(1)
They
have a bad outlook about debt. “Buy now, pay later…..if I can.”
“If I can repay, fine, but if not, let them try to get their money!”
(2)
Over-spending
their income because of poor money management, or not feeling a
responsibility to handle money wisely.
(3)
Lack
of discipline. They see, want, buy…..got to have it now! So they run up
their debts far beyond safe limits.
(4)
Their
life-style is too high for their pocketbook! This usually is encouraged by
the concept of “keeping up with the Joneses.” And, of course, “Every
time I catch up with the Joneses, they refinance!”
(5)
Selfishness
and greed are at the root of many unwise debts.
(6)
Going
on someone’s note and get caught having to pay it off. The wise man
warns of this danger and states clearly that it should not be done
(Proverbs
THE
DANGERS OF UNWISE DEBT
In
the home:
(1)
It
is a leading cause of family arguments, physical and mental abuse &
problems.
(2)
It
is a major cause in divorce, suicides, heart attacks, mental breakdowns,
and crimes.
(3) There have been cruel fights in homes over financial foolishness.
(4) It can cause a neglect in the support and caring for our families (1 Timothy 5:8).
To
one’s budget:
(1)
Credit
cards can become our masters rather than our servants.
(2) Lead to owing more each month than we can pay.
(3) One’s budget is then undermined….made useless!
To
one’s Income:
(1)
It
creates an attitude that my goal is to “get by,” not to be debt free
(Proverbs 24:3-4).
(2) It brings financial bondage—it mortgages our future, we can lose our desire to work, it can destroy our self-worth.
(3) Our income cannot do what it was design to do.
Debt
can become an obsession:
(1)
The
tendency is to compensate for feeling so powerless by going out and buying
something else.
(2) We keep buying things we don’t really need or have to have.
(3) We begin to hide things we buy from our spouse.
(4) As debt increases, a person tends to withdraw more and more into himself.
(5) We can become easily irritated with our family.
(6) We become angry with our “successful” friends.
(7) Our self-esteem can be destroyed.
(8) It all begins with a deception….”Charging is fun and easy.”
SEEING
THE EXPENSIVENESS OF DEBT
One
of the things that helps one to see the foolishness of unwise debt, and in
some cases, even debt itself, is to see how expensive debt can be. The
following two illustrations can well illustrate this.
Illustration
#1: A contrast involving a mortgage of $ 100,000.00:
TYPICAL CASE ALTERNATIVE CASE
* 30-years * Bi-weekly
* Fixed * Half-payment
* 11% interest * 11% interest
* $ 952 a month * $ 478 bi-weekly
* $ 242,838 interest * $ 147,129 interest
Just
making bi-weekly payments over a monthly payment saves a tremendous amount
of interest paid to the lender. Some banks may let you pay twice a month
also.
Illustration
#2: Purchasing a new car every four years:
a)
Buy a new car and finance $ 10,000.00 at 12.5% interest.
b)
Payment of $ 265.80 for 4 years.
c)
Total paid…$ 12,758.40
d)
Do this over a lifetime of work (40 years)
e)
Would purchase 10 cars(10 x 12,758.40 equals $ 127,585.00)
f)
The bank will re-invest your monthly payments for 40 years and they
will come up with $ 3,641,550.00 at the end of 40 years.
This
expensiveness can be seen not only in the interest paid on debt, but the
loss to one’s spendable income, plus the loss of one’s possible
savings & interest paid to you.
CONCLUSION
Successful
money management absolutely depends upon dealing with debt! And unless we
deal with debts properly, we may hear the Lord say in the Day of Judgment,
“Depart
from me ye wicked and slothful servant.” (Matthew 25:26). But
once we have proven to the Lord we can manage money in a proper way, He
often intrusts to us more to use (Matthew 25:23).
QUESTIONS
FOR DISCUSSION
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