Money borrowed today must be repaid tomorrow. Borrowing money has its price – and it is a cost far greater than you realise. Anytime you use credit to borrow money, you pre-commit your future income. The effects of such a decision can range from simple inconvenience to financial disaster. Indebtedness is not something that seems to really bother Americans – until a financial crisis strikes.
If the financial situation is dire, and the financial forecast calls for difficult times ahead, you should work to get rid of all your debt. To do otherwise is to presume upon the future. If you want to ride out your own financial crisis and prepare for the next economic crisis, it stands to reason that we will want to operate from a position of financial freedom.
If borrowed money limits financial flexibility, the absence of debt makes for a lifestyle of freedom and opportunity. With no, or even low, financial pre-commitments, you will be at liberty to pursue your goals. For Christians, the freedom from financial obligation of debt can spell all the difference in how effectively personal resources can be used for His kingdom. How many times have we heard of individuals who pass up going to the mission field because of debt? Getting rid of debt – whether it is a large home mortgage or a credit card balance – is a priceless investment.
Unfortunately, indebtedness has become so common that we have convinced ourselves that borrowing is both necessary and right. But whether your debt is due to unwise overspending or wise decision, one thing is certain: getting out of debt is always harder than getting in. It is much easier to borrow money than to repay it.
The world says credit is an important part of your financial identity. the more credit cards you have, the better your lifestyle can be. Anything is within your grasp if you can simply get the payments low enough. 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.
Getting out of debt may be hard, but it is not impossible. And it has a high price to pay. The best way to get out of debt is to cut spending. Cancel that magazine subscription, or high speed broadband access, or cable television service, forego restaurants and movies. Frugality will eventually pay off. In uncertain times, gone are the days where you “shop till you drop”, but instead, be frugal till you pay off your debts.
Establish a realistic repayment plan and discipline yourself to follow it. Establishing and following this plan is critical to the success of your debt-retirement strategy. There is no quick or painless way to get rid of debt. Once your plan is in place, you will need to take the long walk of self-discipline to make it work.
It pays to keep your credit (cards) clean
A good credit score is your passport to a home, automobile, insurance and yes, a credit card. However, with a devastating sub-prime mortgage crisis and a credit crunch getting tighter by the month followed by a debt crisis and a credit rating downgrade, and now a likely Global Financial Crisis part II, one thing financial institutions are looking out for – your credit card debts.
Banks have been forced to write off record levels of credit card debt, so things are going to get rougher. So make sure you pay your credit card bills in full every month and on time. Late payments will lower your credit score and may even trigger an automated increase in rates. Moreover, it could result in a vicious cycle of credit-card debts.
Never use your credit cards to pay for debt. The debt amount will just keep mounting. Many people justify indebtedness with the thought that they are making an investment when they purchase items. That’s an unwise assumption. And don’t apply for new credit cards you don’t need.
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.
Today’s Bottom Line
It pays to be debt free and financially free. Be a debtor to no man.