Do you have $90,000 in the bank? Do you have $90,000 in collateral? Maybe, maybe not.
According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. CNBC says, “While the average American has $90,460 in debt, this includes all types of consumer debt products, from credit cards to personal loans, mortgages and student debt.”
This edition’s Thriving Skill is healthy money management. Poor money management is typical of many people today. Even many Christians do not use Bible principles to manage their finances in ways that please the Lord. They are not good stewards/managers of what God has given them. Money is not something to love, but a tool we use to demonstrate love to God and love to others. We do not trust our money for happiness or health. We use the ability God gives us to earn money and then we use the money we earn to do good in the world, plan for “rainy days,” and advance the Gospel.
Solomon, the wisest and one of the richest men to ever live, said in Proverbs 22:7, “The rich ruleth over the poor, And the borrower is servant to the lender.”
The rich are the ones who employ other people and who hire others to do their bidding. In this way, they rule over the poor. The rich own the companies, order the products, and have the resources to influence others.
The second part of the verse is fascinating because according to statistics, it is where many if not most people live. “The borrower is servant to the lender.” This is where many people live – in debt. Debt is killing our society and debt is personally hindering millions of people (Christians too) from fulfilling God’s will in their lives.
Debt is not a sin, but it is certainly not a condition that anyone should want to remain in. It means someone else owns your stuff: your car, your phone, your house – your life.
Check your money situation:
- Am I living in perpetual debt to others? I understand having a house payment, but I do not understand constant car payments. It is OK to drive an older car and save up to pay for a newer car with cash. After you buy a new car with the money you have, immediately start saving up for your next ride. Make “car payments” to yourself for your future wheels! If you have credit card debt – cut the cards up. Do the moral thing – don’t declare bankruptcy, pay off the debt instead, and then stop living on credit. Only buy what you can afford, which is what money you actually have after all necessary expenses are paid.
- Am I living with financial pride? Pride is a primary motivator that drives people to take on debt. They want to have a truck as nice or nicer than the other person. You don’t need to “keep up with the Jones’!” Who cares what they drive?! Personal pride may cause one to want to live in a bigger house than they really need in order to show how important or well off they are. I know of men and women in their 20’s that have more debt than I have had in my entire life. This is not healthy. Debt will affect relationships, it will affect the ability to give to people in need, and it will affect time management because of all the work, all the time, “slaving away,” to pay someone back.
I have known many people that followed Bible principles to get out of housing debt. They make extra payments towards the principal of the mortgage payment, thus paying off their housing loan in a fast time. Once the house is paid for, they have a tremendous leap in wealth accumulation – because they are no longer in debt. Consider these tips:
- Drive an older car until you can afford to pay cash for a newer one.
- Have some personal discipline with what you buy. Leave it on the shelf or in the digital cart for 24 hours before making the purchase. Determine if it is really worth it.
- Develop a budget. Have a giving, saving, and spending plan, in that order. It will free you and enable you to get out of debt.
- Choose to help people in need. Many would like to help others, but can’t because they have not managed their finances well. I have heard of people literally crying because they want to give to good causes, but can’t, because of their poor financial choices.
- Use the cash you have, not the money you do not have for everyday life. It is a Spiritual Life Skill. Unless a Christian gains control of his/her money, their debt (lack of money) may be in control of them.
- Put God in First Place. God should be in front of your money and money choices. Give to Him first which demonstrates that you are really trusting God – not the money – for your everyday life.
Please reach out to our counseling office if you want to get some help about how to get out of debt. Below are good resources that could also be of help.
The Complete Financial Guide for Young Couples