Slides: Dealing With Debt

By David Feddes

Dominated by debt

The rich rule over the poor, and the borrower is servant to the lender. (22:7)

 

What causes debt?
Borrowing money!

How can you
avoid debt?
Don’t borrow!

How can you
 escape debt?
Pay off loans!
(and don’t borrow any more)

Types of debt

1. Student loan
2. Home loan
3. Business loan
4. Car loan
5. Consumer credit
6. Personal loan to help
7. Co-signing another’s loan

 

Avoid others’ debts

If you have put up security for a friend’s debt… go and beg to have your name erased… Save yourself like a gazelle escaping from a hunter, like a bird fleeing from a net. (6:1-5 NLT)

There’s danger in putting up security for a stranger’s debt; it’s safer not to guarantee another person’s debt. (11:15)

It’s poor judgment to guarantee another person’s debt or put up security for a friend. (17:18 NLT)

Don’t agree to guarantee another person’s debt or put up security for someone else.If you can’t pay it, even your bed will be snatched from under you. (22:26-27)

Give to the one who asks you, and do not turn away from the one who wants to borrow from you. (Matthew 5:42)

• Give what you can, but don’t make their debts yours.
• Don’t make a personal “loan” unless you’re willing and able to lose it.

What causes debt?

Borrowing money!

Loving pleasure

He who loves pleasure will become poor; 
whoever loves wine and oil will never be rich. (21:17)

A companion of prostitutes squanders his wealth. (Proverbs 29:3)

… lovers of pleasure rather than lovers of God. (2 Timothy 3:2)

Fools and their money

Whoever loves money never has money enough. (Ecclesiastes 5:10)

Of what use is money in the hand of a fool, since he has no desire to get wisdom?

It does a fool no good to spend money on an education, because he has no common sense. (Proverbs 17:6 NIV, TEV)

Gullible simpletons

• Believing smooth sales pitch
• Gratifying instant impulse

Leave your simple ways and you will live; 
walk in the way of understanding. (9:6)

The simple believe anything, but the prudent give thought to their steps.(14:15)

Appearance vs. reality

Better to be a nobody and yet have a servant than pretend to be somebody and have no food. (12:9)

One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth. (13:7)

Content and confident

Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” So we say with confidence, “The Lord is my helper; I will not be afraid.” (Hebrews 13:5-6).

Unpayable debt

No one can redeem the life of another
    or give to God a ransom for them—
  the ransom for a life is costly,
    no payment is ever enough—
  so that they should live on forever
    and not see decay. (Psalm 49:7-9)

Paid in full

It is finished. (John 19:30)

It was not with perishable things such as silver or gold that you were redeemed… but with the precious blood of Christ… Through him you believe in God, who raised him from the dead and glorified him, and so your faith and hope are in God. (1 Peter 1:18-21)

How can you 
escape debt?

Pay off loans! 
(and don’t borrow any more)

Dealing with debt

1. Put God first. Tithe and pray.
2. Work hard. Gain gradually.
3. Budget to spend less than you earn.
4. Build an emergency fund.
5. Pay off debts in order of smallest balance or highest interest rate.
6. Avoid credit. Save at least 10%.
7. Invest for future goals.

Put God first

Make God your senior financial partner.

• Tithe to express that it’s all his money.
• Listen to biblical wisdom about money.
• Pray for Spirit’s guidance and help.

Honor the Lord with your wealth, with the firstfruits of your crops; then your barns will be filled to overflowing. (3:9-10).

Work hard. Gain gradually.
Rely on wisdom and work, not luck.

• Don’t seek instant fortune by gambling on lotteries, crypto-currencies, day trading, leverage, or extreme risk.
• Work hard. Gain money little by little.

Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time. (13:11 NLT)

Budget
Spend less than you earn.

• Track all spending for a while.
• Find ways to cut expenses.
• Limit time in stores or online.
• Avoid unplanned purchases. Wait!

Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty. (21:5).

Build emergency fund

• Save $1,000 as quickly as possible.
• Be ready for unexpected expenses so you won’t need to borrow to pay them.

In the house of the wise are stores of choice food and oil, but a foolish man devours all he has. (21:20)

Pay off debts.
Start with the smallest balance or the highest interest rate.

The wicked borrow and do not repay, but the righteous give generously. (Ps 37:21)

Let no debt remain outstanding, except the continuing debt to love one another. (Romans 13:8)

Avoid credit. Save 10%.

• Stop living paycheck-to-paycheck.
• Enlarge emergency fund with enough to cover 3-6 months of expenses.
• Save ahead for major purchases.

Go to the ant… consider its ways and be wise! ... it stores its provisions in summer and gathers its food at harvest. (6:6-8).

Invest for future goals

• Purchasing a home
• Starting a business
• Educating children
• Funding missions
• Retirement & inheritance

A good man leaves an inheritance to his children’s children. (13:22)

Dealing with debt

1. Put God first. Tithe and pray.
2. Work hard. Gain gradually.
3. Budget to spend less than you earn.
4. Build an emergency fund.
5. Pay off debts in order of smallest balance or highest interest rate.
6. Avoid credit. Save at least 10%.
7. Invest for future goals.