5 Biblical Principles of Money Management – Be Wise with Debt
Debt is very prevalent in today’s society, and it’s often portrayed as something that everybody does. Our culture also teaches us that debt is a necessary part of any financial situation. Proverbs 22:7 warns us, “The borrower is slave to the lender.” We must remember to consider the economic and spiritual dangers of debt. Remember – lenders are willing to lend because they are the beneficiaries of the interest charged. We must always calculate the opportunity cost when borrowing. What is the true cost? If we had invested the money instead of paying interest on it, what is that value? Below are a few important dangers of debt to keep in mind:
· Compounding works against you.
· It is MUCH easier to get into debt than to get out.
· Debt is received tax-free but always repaid with after-tax dollars. In other words, you have to work harder to breakeven.
· Borrowing always mortgages the future. Borrowing leads to a lower standard of living in the future, because the money to repay debt often comes from the “Live” piece of the pie.
· Borrowing always presumes on the future and may deny God an opportunity to work and provide in our lives.
CHALLENGE: Determine the percentage of your income that you’re contributing to debt each month.