Debt Free

I heard a report the other day that there are about 50,000 dogs roaming the streets of Detroit. Why is this happening in poor bankrupt Detroit city? Well, a major contributor to both the city’s and the dogs’ demise is… debt. Many of the automotive workers in Detroit had been living beyond their means for years. As their house values went up so they borrowed more to live better on what they had not yet earned. Then came the world economic meltdown. Car sales slumped and tens of thousands of factory workers lost their jobs. House prices plummeted and many people found that the bonds on their homes were now higher than the actual market value of the property. So, in their scores, people closed up their homes, left the keys in the letterbox and their dogs on the street, and drove off! There is a correlation it seems between debt and stray dogs in Detroit.

It is unlikely that your dog is roaming the street as you read this article, but it could well be that debt is dogging your life. If so, this article is for you. Proverbs 22:7 reads ‘Just as the rich rule the poor, so the borrower is slave to the lender.’ Now there are at least three ways in which a borrower is slave to a lender – legally, emotionally, and spiritually. As I am not an attorney I will address only the last two.

High debt levels cause stress and worry and these in turn can cause ill health, marital problems, and unethical behaviour. Financial problems constitute one of the major causes of marital breakdown and divorce, and debt usually underlies financial problems.

Debt levels can also lead to the reprioritisation of family roles and functions. Dad wants to spend time with his children; he wants to be home at five to bath the baby and read stories to his six year old, but he can’t because he works until eight every night to earn enough to service the family debt. The wife often would like to be a stay-at-home mum but she can’t; she has to take an office job to pay for the house and the cars.

Debt also leads to limited giving and an inward, self-preserving outlook on financial life. It limits scope, dreams and vision and, perhaps worst of all, it affects ones Christian witness.

Slavery to debt is not just a matter of the mind and emotion, it also has profound spiritual implications. Jesus said “No one can serve two masters… you cannot serve both God and Mammon” (Matthew 6:24). Mammon is a personification of worldly wealth; it is a false god whose castle and seat of power is… debt. Jesus calls on us to live in daily dependence on Him, trusting Him for what we need (Matthew 6:3-34). Mammon says; “Don’t listen to him, depend on me and I will allow you to live well today on what you have not earned and do not deserve.” Many of the residents of Detroit listened to Mammon rather than Jesus, as did half the western world’s population, and we are all still suffering from the collapse that resulted. A major underlying cause of the economic melt-down was that people and corporations lived greedily on what they had not yet earned – they lived on debt.

Just in case you think that all this doesn’t apply to us in South Africa, here is a sobering statistic. In 2012 the average level of household debt to disposable income was 76%! How do you shape up against that disturbing average? What is your level of credit card debt? Overdraft? Hire purchase agreements? House mortgage bonds? To measure your degree of financial slavery from another angle ask the question; ‘How much do I give to my church, family and society every month, and just how much money do I save and invest?” The smaller the figure, the more mammon has you in bondage.

Of course the key question that should follow is; “What can I do about my condition of slavery to debt?” Well, it took David only five stones to defeat the giant Goliath and it only takes five simple principles to bring Mammon to his knees. This is not rocket-science, it is simple rock-science. Here are the five ‘stones’:

  1. Stop complaining about how the bank made you do it, own up to the fact that you got yourself into debt, and decide right now to change. Make a solemn covenant before God and your family that you will not incur any further debt ever again. Cap your debt here and now.
  2. Declare to your family and to all who will listen that your new financial priority is to become debt free. Proclaim that you are going to take Romans 13:8 seriously and literally; ‘Let no debt remain outstanding except the continuing debt to love one another.’
  3. So far it’s been easy – now comes the hard part. Eliminate assets that are surplus to your real needs. Downscale to a smaller house; sell your holiday home; downsize your car. Now use the funds released to pay off your debt, starting with credit cards and overdrafts, then HPs, and finally home bonds. Don’t prevaricate and justify – just do it.
  4. Next, budget to live a more simple life and use the surplus each month to increase your debt repayments. Cut entertainment, holidays, restaurant meals, clothing, and gadgets.
  5. Lastly, agree with your family that all windfall income will be used exclusively to pay off debt. Tax refunds, inheritances, and bonuses… everything that isn’t normal salary income.

This rock-science really works. Nearly three decades ago I left an executive position in a bank to pastor my local church. I had debt at that time and my move into full-time ministry cost me 50% of my monthly income. My wife and I immediately placed our trust in the Lord Jesus and put the five principles outlined here into practice. Within just a few years we were debt free… and we still are!

The borrower is slave to the lender but with God’s help and some common sense you can get out of financial slavery. It is not that hard, and actually its quite fun and very satisfying. Take up the five ‘stones’, load them into your financial slingshot, and watch mammon fall prostrate before you in Jesus name!

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