While the economy may be seeing some signs of trouble, personal debt is stressing out a lot of Americans – according to a recent poll. In fact, according to the new Associated Press poll, about half of all Americans say they suffer from debt-related stress. With the nation’s unemployment at 10%, many Americans say it’s tough to find work to pay off their credit cards and other bills.
Restaurants and shopping can burn a hole in your pocket. Spending is an expensive business for the average American. Movies, dinner dates, gifts etc. etc. These are costly items. Try creative ways to limit your spending. Watching the stars. Buying a cheap meal to the seaside or bring along a candlestick goes a long way in keeping your budget healthy.
Needless to say, the Bible discourages debt because it presumes upon the future – and on God. If you are concerned about economic uncertainty, the last thing you want to do is to take anything about the future for granted.
Debt has two primary dangers.
First, debt always presumes upon the future. If you go into debt, you are obligated to repay – yet you take on that obligation without knowing for certain whether you will be able to repay or not. You may enter a relationship in debt!
Second, debt may deny Him an opportunity to work. If you are already in debt before starting a relationship, it becomes very difficult to move on.
If the financial forecast calls for difficult times ahead, you should work to get rid of all debt. To do otherwise is to presume on the future – and that of your future spouse. When considering the purchase of a home, we should apply these three criteria as for undertaking any debt loan.
First of all, does it make economic sense to incur a home loan? To determine this, there are two rules to follow:
The cost to borrow (after-tax interest) must be less than the economic benefit received (interest, yield, and/or growth in value). Rule two: there should be a guaranteed way of repayment.
Secondly, if you’re married, are both spouses free from any anxiety regarding this home loan? The principle indicates that there must be unity between the spouses. Can the home loan be undertaken with peace of mind? If you experience a lack of peace when you picture yourself taking on this home loan, do not enter into the debt.
Thirdly, ask yourself, what personal goals and values am I meeting with this home loan that can be met in no other way?
These criteria are practical, pragmatic, and biblical and should be applied unemotionally to every debt loan opportunity. The counsel to young couples who are considering the purchase of a home or those intending to purchase a new home, is never to become so attached to the home that they could not give it up if the debt could not be paid. Jobs are not nearly as secure today as they were in the past. Inflation will certainly go up, and fixed low interest rates may very well be a thing of the past.
The psychological burden of home mortgage debt is more severe than most people think, especially if a woman whose centre of influence and security is in her home is involved. Studies have shown that having mortgage debt is a stressful factor and that degree of stress relates to the amount of the mortgage.
The question of whether or not to pay off the mortgage, if that is an option, is really an economic, psychological decision. Economically, it may not make sense to pay off a low interest rate mortgage, even if one has the funds to do so. However, psychologically, it may be, by far, the best course. Again, I would remind you that finances are nothing more than a resource to accomplish other goals and objectives – they are never an end in themselves. Therefore, even if it does not make economic sense to pay off a mortgage, there may be higher priority goals and objectives that need to be met. Money then becomes merely the resource to meet those goals. The decision does not have to be always an economic one. That counsel is, of course, good for all decisions.
The Bible does show many ways to overcome any financial crisis. Many of these principles are laid out in our successful course, the Scriptural Financial Freedom series. To learn more, you can download the Small Groups kit from our Store.