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May
2004 - eNewsletter
As you consider what role debt will play in your
financial picture, we recommend reviewing related
Scripture and noting some of the common misconceptions
addressed there.
Read: JAMES 4:13-15
Presuming on the future and
assuming everything will go just as you had planned
(increased salary, investment growth, inflation,
etc.) is financially unwise. Effective stewardship
relies as little as possible on the future and
more on living within a manageable lifestyle
today.
Read: PSALM 37:7a
Be willing to wait on God to
provide for your needs within your current means.
In other words, avoid borrowing to get what you
want now, and wait until you can afford it.
Read: PROVERBS 28:20,
22
Don’t borrow to make an investment just
so you can "get rich quick."
Read: PROVERBS 22:26-27
Don’t guarantee another person’s
loan. This is equivalent to taking on debt yourself.
Considerations Before Borrowing
Spiritual
Do I have the freedom before
God to take on debt?
Does this loan limit my ability to be obedient
to God?
Economic
In general, the financial return you get from
taking on debt should be greater than the cost
of the debt. Taking out a loan to get a college
education or launch a business usually meets this
condition; using a high-interest credit card to
purchase a non-earning asset like clothes or furniture
does not. Also, before you take on any debt, be
sure that you have a realistic plan for repaying
the loan -- one that does not presume on the future.
Psychological
How much debt can you handle? Debt can lead to
a great deal of stress. Make sure you and your
spouse agree on the use of debt.
Personal Goals
Can your goals be met by some method other than
debt? Will taking on debt in one area limit your
ability to reach or pursue your other financial
goals?
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