Financial Principles: Being a Cautious Debtor
Shrewd + Beatific
What does the bible have to say about debt? Quite a lot it turns out and some of it might not be what you expected.
Yes, according to the Good $ense Ministry, the best kind of debtor is the cautious kind or “one who avoids entering into debt, is careful and strategic when incurring debt, and always repays debt”.
I think this is easy to “know” intellectually but find it quite challenging to execute in our society today.
Just like every other Financial Principle we’ve covered thus far (Steward Mindset, Earning, Giving, and Saving) these principles are conceptually straight forward but feel one dimensional in the sense that it doesn’t incorporate all of the other aspects and pressures of our lives.
That’s the way of the cross though, isn’t it? We are meant to pursue God’s truth and righteousness above all else. He is calling us to live a life completely set apart from this world.
I don’t recap these themes and verses to make you feel frustrated or bored. My goal is to remind you of what truth is as a level-set to ensure that we’re all on the same page as we dive into other personal finance topics down the line.
First and foremost, we should avoid debt. This is not to say that if you chose to take it on that there is something wrong with you. It’s more about the fact that debt should not be your first option. A lot of thought needs to go into the decisions you make about the things you want.
Specifically, what other choices do you have that can get you where you want to go without debt? Maybe it will take a longer time or it won’t be as nice, but consideration for alternatives is a must.
Avoid the bondage of debt.
“The rich rule over the poor, and the borrower is servant to the lender” - Proverbs 22:7
This next point was really interesting for me because it didn’t initially come to mind when I was thinking about the possible commentary around debt. However, it completely makes sense!
Taking on debt forces us to make assumptions about what will come after that choice. Want to go to medical school? You expect to make enough money afterwards to pay it off. Want a new bag for Christmas? You guestimate that your new year bonus will be high enough to cover it.
You get the gist and yet you know it’s not there until it’s actually there. This is a little trap our minds play on us. The only way we can break it is by acknowledging that it exists.
Debt presumes on the future.
“Now listen, you who say, ‘Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.’ Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes” - James 4:13–14
As a visionary and dreamer, I am especially susceptible to this kind of behavior. If I can imagine it working out a certain way, I used to think that it meant there was a possibility of it happening.
That’s not how life works.
Slowly over time and through tough life lessons, I am starting to see God in it rather than how I want it to turn out. His ways are infinitely better than mine and I am so thankful for the realities He brings about when I let Him take the lead.
Impacts of incurring debt
As with everything, there are consequences to our actions when it comes to debt.
Debt can deny God the opportunity to work in our lives and teach us valuable lessons.
According to GSM, “God may wish to show us his love by providing us with something we desire but for which we have no resources. If we go into debt to get it anyway, we deny him that opportunity (see Luke 12:22–32).
In the same way that parents refrain from giving a child everything the child wants because parents know it isn’t in the child’s best interest, incurring debt can rob God of the opportunity to teach us through denial. Ecclesiastes 7:14 reminds us: ‘When times are good, be happy; but when times are bad, consider: God has made the one as well as the other.’”
This next point felt counter-intuitive at first, but I think the point it’s trying to make is that by giving into the envy and greed we feel it invites us into a debt cycle.
Especially once you’re in it and the enemy is telling you that you’ve “already ruined it, might as well get what you really want” because “you deserve it”. That’s when it starts to get really tricky to tell which side is up.
Guard your heart against these feeling and pour out your thoughts to God when you feel it coming to a head.
Debt can foster envy and greed.
“Beware! Don’t be greedy for what you don’t have. Real life is not measured by how much we own” - Luke 12:15
This is tough to swallow because so many of us have debt from school and other things and the last thing we want it to do it disrupt our relationship with God.
However, I think the biggest struggle we have is shame about our debt and then we end up hiding from God because our shame blocks us from feeling worthy of his unfailing love.
Debt can disrupt spiritual growth.
“The fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness and self-control. Against such things there is no law” - Galatians 5:22-23
You are worth more than your debt.
Don’t let anyone else – especially yourself! – tell you otherwise.
You are God’s workmanship and He loves you.
Do’s and Don’ts of debt
As I mentioned earlier, debt is something that can be taken on, but there are certain do’s and don’ts that are involved after the careful consideration taken to confirm that this debt was your only option.
While I have been fortunate enough to not have student loans, I did decide that I wanted to do a School of Ministry program after I graduated. The program cost $7,500 and was more money than I’d ever paid for anything at one time in my 22-year-old life.
Of course, costs like these are relative to the person but let’s put it this way: the program was more expensive than the amount of money I could earn in a summer working at a well-paid internship and I also had no idea where it would take from there (aka how quickly I could pay it off). It was essentially unfeasible and unwise for me to try to pay this myself outright.
I prayed about it and decided to ask a close confidante for a personal loan because I needed to pay for the program in April before I even had a chance to earn the money that summer.
I sat down with the person and their spouse, explained all of the logistics of the program (literally running down a list of who, what, when, where, why), when I’d need the money. and how I’d pay them back. I considered the lowest amount I thought I’d have (a couple hundred dollars a month), then drew out how long that would take, and when repayment would start.
They had concerns and reservations, but ultimately agreed.
After the program ended, I lived with my parents trying to figure out my life. Despite the fact that I didn’t have a job, I diligently began paying back my loan. I picked up odd jobs wherever I could to shore up the hundreds needed each month. During that time, I was so thankful I was not overly ambitious during contract negotiations.
Repay debt and do so promptly.
“The wicked borrow and do not repay, but the righteous give generously” - Psalm 37:21
“Do not say to your neighbor, ‘Come back later; I’ll give it tomorrow’—when you now have it with you” - Proverbs 3:28
Once I started working full-time a month or two later, I started saving and was able to pay back the remaining balance a year earlier than planned.
It was my way of saying “thank you” to my confidante for taking a chance on me and that I am very aware of how privileged I am to know people that could afford to lend me the money interest free and that my parents let me live with them while I figured things out.
Give and pay what you owe.
“Give everyone what you owe them: Pay your taxes and import duties, and give respect and honor to all to whom it is due” - Romans 13:7 NLT
Before I sign off, one more don’t to add to the list that didn’t pertain to my story.
Don’t co-sign.
“Do not co-sign another person’s note or put up a guarantee for someone else’s loan. If you can’t pay it, even your bed will be snatched from under you” - Proverbs 22:26–27 NLT
What this means is that there are very few situations where backing someone else’s loan is a good idea. You are essentially legally agreeing to pay the loan if the person defaults (read: stops paying) on it. That is a very serious position to be in.
Of course, there are situations in New York where you need to have a guarantor because the rent is higher than 40x your rent.
Sometimes these things are impossible to get around.
However, I strongly caution you to prioritize figuring out whether you can truly afford the place you are signing the lease for and that you prayerfully consider the most responsible, equipped person to request this kind of assistance from.
Whether you have debt or not, there will always be choices about whether to take on debt in the future. I hope you are able to internalize these biblical truths and recall them in these moments!
You are fully capable of changing your situation for the better.
Your debt does not define you!
You are a beloved daughter of God and nothing will ever change that.
Not even debt.
