Debt Free the Bible Way - Money Management by Bible Precepts
If you are continually strapped financially and are sick and tired of it, God has help for you. Many, today, live on borrowed time and borrowed money. The Bible does not teach, as some propose that all debt is wicked and sinful. (See the article called Owe No Man). However, it does teach the undesirability of debt. Debt should be a last resort. God may occasionally allow it in order to teach us discipline. However, He never meant it to be a way of life.
Americans are a covetous people who always want more and more stuff. Influenced by a multitude of advertisements, they think they must have the latest, the best; and it must be state of the art. This leads them into financial disaster and keeps them from using their God-given funds to do the work of God.
If you are looking for answers to your financial problems, there are principles in the Bible that can help you. However, you must be serious in their application and obedient to the Lord in these matters. Are you ready? If so, then read on.
Give to God First.
I will not discuss the doctrine of giving in any detail. I will not tell you how much to give or where to give. But you must give to God and He must get the firstfruits of your labors—not the leftovers. Proverbs 3:9 tells us, “Honour the LORD with thy substance, and with the firstfruits of all thine increase.” Do not expect God to help you if you refuse to bless Him with a portion of your income.
Be Content With What You Have.
Do you have enough to eat and clothes to wear? Then be content with what you have. Lack of contentment is a sin. It is also the greatest cause of unnecessary debt. If it is your sin, then confess it to the Lord and let Him help you change your greedy ways. Meditate on scriptures such as:
1 Timothy 6:6 “But godliness with contentment is great gain. 7 For we brought nothing into this world, and it is certain we can carry nothing out. 8 And having food and raiment let us be therewith content.”Check the Contentment Quiz to see how content you are.
Budget Your Income .
I am not advocating any particular budgeting program. But all budgeting plans are not complicated. There are very simple ways to budget if you have never done it before. Budgeting is nothing more than the careful use of your resources. It means knowing how much is coming in and how much is going out. And it means knowing where it is going. You are to work hard to know the condition of your resources. Consider this verse.
Proverbs 27:23 “Be thou diligent to know the state of thy flocks, and look well to thy herds.”
- You are a steward of the resources God provides you. A steward cares for that which belongs to another and must be ready to give an account for his stewardship. Are you able to give an account for your use of the money God has given you?
1 Corinthians 4:1 “Let a man so account of us, as of the ministers of Christ, and stewards of the mysteries of God. 2 Moreover it is required in stewards, that a man be found faithful.”
Stop Going Into Debt .
This one point is the key to getting out of debt. Stop charging on your account. Get rid of the credit cards if you cannot control them. Even credit cards have to be paid off slightly faster than the interest mounts up. So if you cease to borrow, you will one day cease to owe. Yes, it takes discipline and it takes a plan. I cannot guarantee you that no medical emergency or similar catastrophe might ruin your plans. But God is in charge of these things and can be trusted with your life. However, the alternative is the slavery of debt. In the Bible, debt is a negative that should be avoided if possible. Notice what God says.
Proverbs 22:7 “The rich ruleth over the poor, and the borrower is servant to the lender.”
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
Create an Emergency Fund .
I could never get out of debt until I created a fund for minor emergencies. Some people establish savings accounts. Others incorporate these into complex budgets. It does not matter which method you use. But begin to put aside for the things that break. Start with a small amount but make it regular. Put that portion aside each paycheck. I have found that $200-$300 in my emergency fund can often keep me from greater expenses.
- For instance, if your refrigerator stops working and you have no money at all, what do you do? Most people pull out their credit card, go to Sears and buy a new one—and feel fully justified in their debt. But the debt is not just the new refrigerator. You wanted to make sure it did not break for a while, so you got a good one…right? And now you will have to pay for all the interest in addition to the basic cost. You may end up paying $1,500.00 to $2,000.00 for that one appliance.
- But what if you had $250.00 in your emergency fund? Now you have other options you did not when you were broke. You could check into getting the old one repaired. Or, you might find a good used one you could buy. I know. You try to justify the new one. It has a warrantee. It will last for 20 years (good luck). But the $250 can get you a refrigerator. Consider the advantages. There is no interest to pay. There are no future payments to make. And, if it breaks, you still are not in any worse shape than you were. It is only our desire for things that makes us want the new one. Search your own heart and consider the teaching of the Bible.
Proverbs 30:24 “There be four things which are little upon the earth, but they are exceeding wise: 25 The ants are a people not strong, yet they prepare their meat in the summer.”
- God calls the ants wise because they prepare their meat in the summer. Why can’t we show a little of the same wisdom?
Decrease Expenses .
I can already tell you…you think this is impossible for you. You have already cut to the bone and nothing else can be cut. 99% of the time, you will be wrong.
There are some basic principles of personal finance that you must understand. They are so simple that you think you already know them. But, in most cases, people in trouble act as if they do not exist.
- If you spend more than your income, you are going into debt.
- If you continually spend more than your income, you are heading for disaster.
- There are only two ways fix this problem:
- Increase your income
- Decrease your outgo
We want a magically solution to our debt problems just as we want a magical solution to our weight problems. There is only one way to lose weight…by consuming fewer calories than we burn up. But we always want an easier plan. But, in order to be magical, a program has to be complex. After all, if we can understand it, it must not have the magic. O, yes, we can play tricks on our bodies. Through drugs or imbalanced diets, we can trick it into not consuming the calories we put in our mouths. But there are dangers in these approaches.
With our finances we want the same magic. But in the long run, there is only one way—to spend less than your income. This brings us back to the point of this section: you need to seriously look at your expenses to see what can be cut back. I am convinced that one dollar saved is equivalent to increasing your income by two dollars. A portion of the extra income should be given to the Lord and the government will surely get its part. Enough extra dollars will raise you into a higher tax bracket (America) and often brings extra expenses. And, finally, extra income usually gets spent…I have an extra $100 a month so I can get that car I always wanted. Extra income almost never gets people out of debt. That comes by reducing spending.
Interest on debt is probably the greatest waster of your money. So, by refusing new debt, you will begin to reduce your expenses. But there are other areas to consider. Look at the following questions:
- Check your repetitive expenses like phone extras, cable TV, health club, etc. Do you really need them?
- How much are you spending on pets? Could you give them to a friend?
- How much do you really spend on your hobbies? Don’t guess. Add it up. What could you cut?
- What do you spend on eating out?
- What do you spend on entertainment? Sports?
- How much do you spend on vacation? Is it really necessary? Could you stay at home and take short trips in your surrounding area this year? Could you go to state parks instead of expensive amusement parks?
- Could you drive a cheaper car, live in a smaller house, eat more beans and potatoes, buy fewer pre-prepared foods?
I hear your protests. That only demonstrates the problem. You are not unable to decrease your expenses. You are unwilling. If you are out of debt, then God allows certain extras. But if you are deeply in debt, something has to give.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
Learn to Judge Real Value and Costs.
1 Corinthians 2:15 “But he that is spiritual judgeth all things, yet he himself is judged of no man.”
Part of wisdom is learning how to discern. The world will sell you on something being 50% off. Wisdom will teach you that you can save the entire 100% if you do not purchase it at all. Ask God to give you wisdom in financial matters (see James 1:5). The person selling you something is not looking out for you but for himself. Learn to judge bargains and deals for what they really are.
- The extended warrantees that are offered with about everything you buy now are a good case-in-point. Have you ever wondered why these warrantees are pushed so much with about everything you purchase? Is it because they are such a good bargain for the consumer?
- No! They sell these to you because they provide such good profit for the company. On the whole, people gain much less from these warrantees than they spend. You can absorb an occasional failure of an appliance for much less than it costs to have warrantees on everything.
Another waste of money is interest—especially the level of interest most people pay on credit cards. You might be surprised at how much money a month you might have for other things if you had not dug yourself into so much debt. Do the research and find out. Dollars spent on interest are thrown away.
- What if you find a thingamajig that you would like to have at 40% off and put it on your credit card and pay it off at minimum payment? If it normally cost $100.00, you got it for a bargain at $60.00, right? Wrong! The interest on your credit card will probably double the initial cost of the item so you will probably pay about $120.00 for it.
- Would you run down to a sale where the newspaper ad says that everything in the store is marked up 20%? Of course not. But when you put an item on credit, you might as well be doing the same thing.
Working mothers are another example where people often misjudge value. I will not deny that ladies who make a good income may add considerable to the household income. However, many mothers of young children work because they are convinced they must have the money—even though their husbands bring in a decent income themselves. These ladies often work for little more than minimum wage. In actuality, they often work for little or nothing. Because they are working, they pay for day care, extra car expense, extra clothes expense, extra doctor and medicine bills (the children will catch more in a day care), extra food expense (more easy-to-serve foods and more meals out) and more spending splurges because of stress. In addition, their wages may put the family into a higher tax bracket. After these items are considered, many moms make about a dollar an hour for their efforts. Add it up for yourself.
Set Your Financial Priorities.
According to Matthew 6:33, we are to seek first the kingdom of God. So, what are your financial priorities? Do you think you have to have some things that are really not necessary? Make sure your financial priorities line up with God’s priorities for you. Make a list of your major financial goals in the order of importance. Now pray about them to see if they are the will of the Lord for your life.
Make the Tough Decisions on Purpose.
Christians need to judge the situation with God’s help and make the right decisions.
1 Thessalonians 5:21 “Prove all things; hold fast that which is good.”
We have a tendency to hide our heads in the sand when it comes to financial problems. We believe that if we ignore it long enough, it will just go away. But it doesn’t. While we pretend it isn’t there, we just get deeper and deeper in trouble. What could have been handled with minimum adjustments becomes a major mess.
The key is to recognize the problem before it gets out of hand. If your income continuously falls below your expenditures, you are already in trouble. Don’t wait until the debts pile a mountain high. Do something now!
Look at your situation and make the tough decisions. You are a steward of the resources God has given you. Get that new job. Sell that second car. Cut the entertainment. As hard as it seems, it is a world easier now than it will be later.
In Good Times Plan for Lean Times.
To some, this may seem to be the opposite of faith. However, many do not understand the Biblical meaning of faith. Faith is taking God at His word and acting on His promises as if they were present reality. This may mean that you step out in action on God’s leadership without visible support for your actions. But it also means that you follow the word of the Lord because you know it is true. Listen to what God’s word says:
“The ants are a people not strong, yet they prepare their meat in the summer” – Proverbs 30:25
God wants us to prepare for winter. That is one of His definitions of wisdom. When your income is good; when things are going well—that is the time to put some resources aside for the lean times. Too many people get a $50 a week raise and then go out and commit themselves to $60 a week extra expense. Look ahead. Plan for tomorrow. This is not ungodly. It is God’s plan!
Simplify Your Life .
John warns us against loving the things of the world (1 John 2:15-17). Yet, that is what we often do. We want nice clothes, nice furniture, nice cars, etc., etc., etc. We are never content with what we have now. But many of these little extras add up to a lot of money. You can often save quite a bit of money by simplifying your life. This is a special problem in America—the land of plenty. Please look at your life and see where unneeded things can be cut back. Simpler is less complicated and often much more peaceful. You may learn to appreciate having and doing less.
Learn New Skills.
God’s people should do their best at whatever they do. This means developing your abilities and learning new ones. Colossians 3:23 tells us, “And whatsoever ye do, do it heartily, as to the Lord, and not unto men.” You cannot do your best if you do not develop your talents and expand your knowledge.
- You can also learn home skills that can save you money. Learn to do simple things on your car. Do certain things around the house. Make it. Fix it. Grow it. Bake it. Can it. There are a hundred ways and more that you can save money by doing it yourself.
Consider a Job or Career Change .
Some people stay in dead-end situations even after it becomes plain to them that there is no future for them where they are. In order to take care of your family, you may need to totally change your career. Or, you may need to go back to school to prepare for a new line of work. The Lord told the Israelites that they had compassed (gone around) a particular mountain long enough (Deuteronomy 2:3). They were told to turn northward and head out for new territory. This could also be God’s will for your life. Listen to Him.
Don’t Be Blind to the Alternatives.
We tend to lean to our own understanding; to see things as we have always seen them. God wants us to look beyond our reasoning and see other possibilities.
“Trust in the LORD with all thine heart; and lean not unto thine own understanding. In all thy ways acknowledge him, and he shall direct thy paths.” – Proverbs 3:5-6
A good rule of thumb: There are usually three times as many alternatives as you think there are. Keep looking. Keep praying. God has a way for you to get through.
Sometimes we do not see alternatives because we have already decided that they will not work. Remember, the thing you are sure you cannot do might not be all that bad. Check your heart and make sure that you are not rebellious. You may be blinded to God’s will by your own stubborn heart.
Give to Others in Need .
In times of financial troubles, we tend to get selfish and see our needs only. But this is a time when you especially need to be sensitive to the needs of others. That helping hand may be in the form of work or encouragement. You do not have to have money to care for the needs of others. But that is one of the best ways to assure God’s concern for your needs.
“There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty. The liberal soul shall be made fat: and he that watereth shall be watered also himself.” – Proverbs 11:24
“He that hath pity upon the poor lendeth unto the LORD; and that which he hath given will he pay him again.” – Proverbs 19:17
These precepts are not meant to be a detailed program of personal finance. Rather, they are given for the purpose of general direction. In most cases, financial stability requires nothing more than the faithful practice of biblical principles. First, you must know these biblical precepts (as given briefly above). Second, you must discipline yourself to practice them. This requires you to submit to the will of God in your life. Third, you must faithfully practice them with patience until God blesses.
One final note: it may not be God’s will for every one to be financially stable. He may allow sickness or financial disaster to occur for His own purposes. He may force us to look to Him in faith through financial problems. The precepts given above are general in nature and God often intervenes. We obey them because they are God’s will, not in order to be rich in this world. God must always be the center of all that we do. Do not set your eyes on the riches of this world. You cannot serve God and mammon (material possessions).