What Does the Bible Tell Us About Debt?
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This is a guest post by Miranda Marquit who writes about personal finances for the All Business Personal Finance Corner and edits information on debt consolidation for DestroyDebt.com. Interested in writing a guest post for Gather Little by Little? Contact me!
One of the growing areas of personal finance is an interest in applying Christian principles to how one spends, saves and invests money. Christians are beginning to take an interest in how their financial lives affect their spiritual lives — and especially in how their spiritual beliefs and values inform their financial decisions. From investing to donating money to the less fortunate, Christians are turning to the Bible to help them navigate their personal finances. And as America’s debt problem becomes increasingly many Christians are wondering what God has said about debt.
What the Bible says about debt
There is nothing in the Bible that forbids the borrowing of money. Indeed, in Proverbs 28:8 and Matthew 25:27, we see that in many cases, it is reasonable to expect a fair rate of interest for money lent. (Interesting side note: In Exodus 22:25 and Leviticus 25:73 we find that interest should not be charged to the poverty stricken.) But if we get into debt, the Lord expects us to pay our debts honorably (see Psalms 37:21 and Romans 13:8). This means that if we incur the obligation, we should do everything in our power to discharge it. This doesn’t preclude bankruptcy, but bankruptcy should be the last option.
However, while the Bible does not forbid debts, the Word does offer us some guidance. The practice of usury — the charging of exorbitant interest rates — is discouraged rather strongly (Nehemiah 5:10). From this, it might be wise to infer that perhaps we should avoid debts that would charge usurious rates. If you can’t get a reasonable interest rate, perhaps the loan is ill-advised.
Wise use of our resources
Our monetary resources are gifts from God. Proverbs 17:16 points out that money is of no use to the fool. The parable of the five talents in Matthew 25 further illustrates the point that God expects us to be wise with our money. Additionally, Ecclesiastes 5:10 points out that if money is all we value, then we will never have enough. A desire to continually get material possessions with money can be our downfall. In many cases, it is this desire to have something now, rather than waiting, that results in large amounts of debt.
Wise use of our money also includes living within our means and buying only what we can afford. You may have to go into debt to buy a house, but it does not have to be an overly expensive house. A modest house that meets your needs is sufficient. Likewise, education loans need not be to the most expensive school out there. State schools can provide what is needed. If the debt payments would put you in a position of financial stress, the rule of thumb is to be the “wise servant” rather than the “fool.” Borrow less than you “qualify” for. It is wisest to borrow as little as you can.
My favorite admonition from the Bible concerning money and debt? Luke 14:28: “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?”
What is your favorite money verse from the Bible? Share yours by adding a comment!
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