Finances

Practices for Handling Money II: Debt

If I’m going to talk about money, at some point I have to talk about debt. In America at least, debt is a way of life.  The American government is trillions of dollars in debt, and that amount grows every day.  Americans by the bucketloads take on debt to fund their college degrees, buy their homes, run their small businesses, and own their cars.  Consumer debt in America is pandemic.  You might say that debt is the norm, it is the culture, and people don’t think twice about taking it on.  Sometimes, however, you can follow the culture to your own ruin. 

The relationship of Scripture toward debt is complex partly because the word “debt” can mean more than one thing.  “Debt” can refer to any situation in which someone borrows money.  This is the broadest meaning of the term.  According to this meaning, the person with a modest home mortgage that he has no trouble paying is in debt because he has signed a note to pay off the balance in the future. 

The second meaning of “debt” refers to a situation in which people owe money that they cannot pay back.  Occasionally, this sort of debt comes from extraordinary circumstances beyond one’s control — enormous medical bills or loss of work due to injury — but in America, at least, these sorts of situations are the minority.  In most instances in America, the debtor willingly took on debt that he could not sustain over time – buying too much home or taking on hefty credit card debt. 

Scripture stands squarely against this second type of debt when it arises because the debtor chose it. The debtor has foolishly and willingly borrowed money or signed a contract that strains his finances to the point that he eventually cannot pay.  That type of debt is sin (Ps 37:21).  It can be a type of stealing, for the debtor has taken money from others but does not pay it back.  It is often a violation of one’s word, for the debtor has signed a contract that says he will pay according to certain terms but later reneges on what he signed.  It reveals a heart that is misplaced, for where your treasure is, there your heart will be also, and this kind of debt shows that the heart’s treasure is at least skewed toward earth instead of toward Christ.  The heart of the debtor is not content with what he has.  So he borrows to get what he wants or he commits money that he can’t pay.  That is sin. 

Scripture is more nuanced on the first meaning of debt (borrowing money broadly speaking).  On the one hand:

1.  Scripture contains no clear prohibition of all loans.  Even Romans 13:8 that says to “owe no one anything, except to love each other” does not necessarily restrict all forms of loans, for it comes immediately after 13:7, which says to “pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed.”  If you borrow money and sign a contract to pay it back, do you owe the full balance or merely the amount the contract says you owe this month? The answer, of course is “yes.” Thus, does 13:7 tell us to pay our obligations faithfully or to pay off everything immediately?  My point isn’t to debate what Romans 13 says about loans, but to say that whatever it says is debatable.  I would not consider it a clear prohibition of all loans.  If, however, someone read this verse and took it to mean they could not take out any loan ever, I would tell him to follow his conscience on the matter. 

2.  The Old Testament allows for loans to the foreigner (Dt 23:20).

3.  Jesus, in the parable of the talents, scolds the wicked servant because he did not at least put his one talent into the bank where it could earn interest (Matt 25:26-7).  I understand this is a parable and not straightforward teaching.  I also understand that Jesus is not advising the wicked servant to take out a loan.  But within the parable, this is at least an endorsement of banks and what they do, and the main thing they do is loan money.

On the other hand:

1.  The Old Testament prohibits charging interest on loans for your brother (Dt 23:19-20) and for the poor (Ex 22:25; Lev 25:35-8).  Even if charging interest on loans may be Biblically allowable in some cases, it is not allowable to take advantage of the poor in this way or to put debt between brothers.

2.  “The borrower is the slave of the lender” (Pr 22:7).  Even if borrowing money may be legal, it is not normally wise.

3.  Romans 13:8 may not prohibit all loans, but it does push in the direction of avoiding debt in general and of getting out of it if you are in it. 

Thus, Scripture may allow for certain types of loans to certain people and for charging reasonable interest on those loans, but the overall thrust of Scripture is to lend freely and to not be in debt to your brother. 

It may be true that the first meaning of debt (borrowing money broadly) can be legitimate, but it is also true that this first meaning is what leads to the second meaning (borrowing money that you can’t pay back), and when borrowing money reaches the point where you can’t pay it back, you’ve crossed a line. 

Based on the discussion above, I do not believe Scripture lays down a law against all debt, but my counsel would be to avoid debt as much as possible.  Avoid car payments and student loans.  Avoid credit card charges that you can’t pay off at the end of the month.  Don’t finance furniture or a new kitchen.  If you cannot afford to purchase something new or big, live with what you have.  If you must purchase an item, purchase something used and less expensive and pay cash instead of borrowing.  Do everything in your power to avoid debt if you can.

Sometimes you can’t.  A home might be an example.  You must live somewhere.  That’s not an option.  And wherever you live will likely involve debt.  In most instances, your only options are to rent or buy, and both options involve debt of some kind.  When you rent, you sign a lease that obligates you to make monthly payments for usually a year.  That is a form of debt.  If you take out a mortgage for 15 years, you have one contract for 15 years.  If you sign leases for 15 years, you have 15 contracts for 15 years.  The mortgage is a bigger contract with a longer time to pay it, but no matter how you divide it up, you must take on debt if you want to live somewhere. 

Given this reality, if you can afford a reasonable home mortgage, go ahead and get one for the following reasons:  1) In the long term, owning is cheaper than renting.  2) The lease is perpetual.  The mortgage is not.  Thus, the mortgage actually gives you an opportunity to end debt for housing.  3) With a mortgage, you own the home.  This gives you a resource you can use to pay your debt if something wild happens.  If you become unable to pay your mortgage, you can always sell your home, pay what you owe, and go rent something cheaper.  I understand there are times when people may be upside down on their mortgages and also unable to pay, but those instances are much rarer than people being delinquent on their rent.  In general, the home itself is a resource that provides equity against defaulting on your debt. 

Do not, however, get a mortgage if you cannot afford one.  A mortgage may be cheaper in the long run, but it is considerably more expensive up front.  And if you do get a mortgage, get only what you can pay for.  Don’t buy a $500,000 house if you can afford only a $250,000 house.  And once you have a mortgage, pay it off as quickly as you can without jeopardizing your ability to support your family and pay your other obligations. 

Thus, your main thrust concerning all forms of debt should be to avoid it as much as possible.  Debt is too often a financial, emotional, and spiritual shackle.     

All things may be lawful, but not all things are expedient. 

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Practices for Handling Money

Before I talk about Biblical practices for handling money, read the previous blog “Principles for Handling Money” here.  That blog describes heart attitudes toward money, and a right heart is the foundation for right practices.  Everything I say here presupposes what I said there.  If you understand what a right heart looks like, what does that heart do with money?  I will cover financial practices in multiple blogs, but for now, here are three.

Give Sacrificially:  Giving may be the single most important thing you do with your money.  Whatever your income, you can give something.  And you need to give something, not just for financial reasons but because giving is healthy for your soul.  Giving is how your soul lets go of money.  Giving is the best way to combat greed. 

A heart that wants to follow Jesus sees the goodness, the necessity, and the benefits of giving and embraces it.  A heart that cares little for Jesus will hold onto what is mine, mine, mine. 

God will not require everyone to give the same amount or even the same percentage, but He will require everyone to give. 

Giving needs to be a sacrifice.  The billionaire who gives millions hasn’t made a sacrifice.  Your giving should cause you to go without something you would otherwise have if you did not give. 

For more on giving go here and here.

Live Within Your Means:  This practice deals with spending, and because it deals with spending, it deals with your lifestyle.  Don’t try to live a lifestyle you can’t afford.  If you can afford only a one-bedroom house, don’t buy a three-bedroom house.  If you can afford only a 600 square foot apartment, don’t rent a 1200 square foot one.  Don’t go on a vacation you can’t pay for or buy a new car when you can afford only a used one.  All these choices are lifestyle choices, and all these choices deal with spending. 

How you handle money impacts your lifestyle.  You may not be able to live like everyone around you or like the happy people in the commercials. 

Instead you must live within your means.  This practice is a contentment issue.  People who are content with what they have live with what they have.  If you think you should have more, you will face pressure to spend more, whether you can afford it or not.  If you believe you need what you do not need – a bigger pickup, a cabin at the lake, more entertainment, whatever – then you will spend what you can’t afford.  Such spending is fundamentally a spiritual problem that has caused a financial problem. 

You must live within your means for multiple reasons.

First, doing so prevents financial disaster and debt. 

Second, doing so frees money for God’s kingdom.  Most people who do not live within their means do not give.  They don’t think they can give because they think they need more money just to meet their “needs.”

Third, doing so removes the stress from wanting more money.  When you desire more money, you are never content or grateful.  You are stressed. 

Fourth, doing so removes the stress from being unable to pay your bills.  People who do not live within their means can postpone the day of financial reckoning by taking on debt or finagling money from family or friends, but sooner or later they will meet this wall. 

Fifth, doing so helps your soul because it causes you to let go of earth and to say no to pleasures you might want.  Jesus said you must deny self and take up your Cross and follow Him.  God never intends dying to self to be merely an interesting philosophy.  He intends you to practice it, and sometimes He gives you less money than you would like so you can practice it. 

Sixth, doing so helps grow you in self-control and discipline.  The woman who buys the new clothes she can’t afford lacks self-control and discipline.  The woman, however, who wants to eat out every day but who packs a lunch and eats at home builds her self-control and discipline.  Living within your means helps you control money instead of letting money control you.

Seventh, doing so is more honest.  When you live a lifestyle you can’t afford, you pretend to be someone you are not.  You are living a lie.  Your life is just a show. 

If you are content in Christ, you will live within your means.  Pursue Christ.  Love Christ.  Enjoy Christ.  Your spending will then follow your heart. 

Avoid Get-Rich-Quick Schemes:  Earn $10,000 a month working from home . . . Double your income with a phone call . . . How I became a multimillionaire in one year! 

Ads like these are everywhere, and they appeal to the person who wants to get rich.  Ignore them.  These schemes are problematic on multiple levels.  They promote greed, sow discontentment, and focus on self.  They highlight money, increase your anxiety, and push you to trust the wrong source for your provision.  From this perspective alone, get-rich-quick schemes are toxic for your soul.  Avoid them.

But these schemes are also problematic from the perspective of dollars and cents.  Most of these schemes are scams.  They promise a downpour but deliver a desert.  More often they take more than they give.  Thus, in most instances, they will make you poorer as you pursue a dream that makes you more miserable. 

Get-rich-quick schemes are, thus, foolish because they rob your heart and your pocketbook.

Instead of looking to get rich quick, try looking for some good work.  Be faithful, responsible, and full of integrity in your work, and live within your means.  This mentality will be healthier for your soul and better able to provide the needs for you and your family. 

People who have the peace of Christ have no desire to get rich quick.  Those, however, who desire to be rich fall into all sorts of problems (I Tim 6:9). 

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Principles for Handling Money

Money is earthly.  Money is spiritual.  Money is an earthly substance with enormously spiritual implications.  Money is God to many people.  They bow to it.  They live for it.  Their joy is in it.  Because money can wield such spiritual influence, Christian and secular people think on money in vastly different ways. 

Secular thinking focuses on earth.  Consequently, secular advice on handling money tends to focus on how to maximize money or utilize money solely for the here and now.  Secular people do not think about how money impacts their soul or their eternity.  They focus on good principles for investing now or saving now or how to get the most product for their buck. 

Christian thought, however, has an eternal and spiritual focus.  Christians see all of the temporal and practical matters of the here and now and may even agree with much secular advice on investing and saving and what not.  But Christians see more than this, and they do not believe that these temporal, practical matters are the main thing.  In fact, to the Christian, secular advice may be woefully impractical because it ignores the main thing. 

In secular thinking, you maximize earthly gain.  But in Christianity, sometimes you sacrifice earthly gain for the sake of your soul.  Thus, as I give Christian principles for how to handle money, sometimes I will be at loggerheads with what the secular world will tell you.  On other points dealing with practical earthly matters, we may agree to an extent, but as long as I take my cues from above and they take theirs from the here and now, we can never fully agree.  The Christian and secular person will never fully see eye to eye on money.

With that as an intro, let’s dive into some Christian principles for handling money.

God owns it all

Perhaps the first fact we need to understand about money is that whatever money we have is not ours.  It is God’s money, and God has seen fit to let us manage it.  This is a fact that our flesh fights against.  “No!” we scream.  “It’s my money!  I worked the job!  I got the paycheck!  The bank account has my name on it!” 

But it isn’t my money.  God gave me the job.  God gave me the talents and skills I use in that job.  God gave me the breath I breathe so I can work that job.  And God did the same with my employer.  The very money that my employer paid me came from God.  Not only does God own the money I have, but God owns the house, the car, the clothes, the jewelry, everything.  In fact, God owns me.  He may let me use the material possessions in my domain as a father lets his children use the bedroom they sleep in.  He may let me manage the money in a bank account with my name on it as an investor lets a financial planner manage his funds, but the child doesn’t own the bedroom nor the manager the money.

 What this means for the purpose of handling money is that we need to manage God’s money for God’s purposes and not for ours.  Of course, God’s purposes will include providing for the needs of you and your family, but He will also have bigger purposes than that.  He wants to see if you can trust Him enough to use His money as He decides. 

Be grateful

Gratitude flows naturally from the fact that God owns it all.  If God owns everything I have, then everything I have comes from grace.  I don’t deserve one cent of the money I have.  Whether I am financially rich or poor, I deserve less. 

Satan fights against gratitude by convincing us that we own the money, that we worked for it, and that we deserve to do what we please with it.  When the heart holds onto money, it is not grateful for it.

Satan also fights against gratitude by getting us to compare ourselves with those who have more and by convincing us that we deserve more.  When you think that way, you will not be grateful.  But when you see that you deserve nothing and that you own nothing of what God has entrusted you with, you are grateful for what you have. 

Gratitude does not involve how much money you have but how you view the money you have.  A poor elderly woman can be grateful for her pittance, while a rich young man can feel entitled to more.  Or a wealthy man can be grateful for his estate, while a poor woman is bitter that others have more.  Gratitude is in your heart, not in your bank account. 

Be content with what you have

Contentment also flows naturally from the fact that God owns it all, and contentment is crucial to handling money properly.  When you are content in Christ, you are content.  And when you are content, you don’t need more money to be content.  I’ve written on this already here.

Understand that money is temporary

When you die, the money doesn’t go with you.  Money is useful for 80 or 90 years, but in eternity it is useless.  Why trade away eternal benefit so you can have something for 90 years?  That’s a foolish trade.  Live for eternity.  When you consider how to handle money, do so with eternity in mind. 

Let go of money

If God owns it all, let Him own it.  Stop handling money as if it is yours.  Money has the power to corrupt your heart and devour your soul, and almost everyone whom money corrupts and devours has no idea what it does to them.  It is a cancer quietly eating away their heart while they go to work, raise their kids, and buy their home.  If you cannot let go of money, money will not let go of you.  It will drive you and control you and enslave you, and you won’t even know it. 

Let go of it! You can’t live for God and for money.  Let go of it!  If you gain the whole world but lose your soul, you are a fool.  Let go of it!  It’s not yours.  Let go of it!  You can’t take it with you to eternity.  Let go of it!

The heart must be free from money.  You cannot serve two masters.  If Christ is your Lord, money will not be.  If money is your Lord, Christ will not be.  The most effective way to let go of money is to cling with all your heart to Christ, to love Him, pursue Him, adore Him, and serve Him.  This is not just a show.  Many who claim the name of Christ don’t love or serve Him.  Jesus must be your Lord from the heart.  It must be real.  Do that, and you will begin the fight of letting go of money. 

Up to this point, every principle I have mentioned has focused on heart attitudes.  The heart is central.  Many people who talk about money talk only about outward behaviors – saving, spending, debt, investment, emergency funds, IRAs.  But the stance of the heart toward money is the foundation for outwardly handling money in a godly manner.  If the heart is wrong, the behaviors will be misplaced at best. 

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