Chapter 17
Their property held them in chains . . . chains which shackled their courage and choked their faith and hampered their judgment and throttled their souls. They think of themselves as owners, whereas it is they rather who are owned: enslaved as they are to their own property, they are not the masters of their money but its slaves. CYPRIAN
God opposes usury and greed, yet no one realizes this because it is not simple murder and robbery. Rather, usury is a more diverse, insatiable murder and robbery. MARTIN LUTHER
A man jumped off a twenty-story building. Onlookers were terrified, but the man seemed perfectly calm. As he plummeted by the window of a fifth-story apartment, he looked at the wide-eyed occupant and said, “Everything’s all right so far.”
This apocryphal story reminds me of the attitude many people take toward debt in its early stages: “Everything’s all right so far.” But what happens to most debtors later is equivalent to what happened to the man when he finally reached the ground.
The average American family devotes one-fourth of its spendable income to outstanding debts.147 Since 1945, consumer debt in the United States has multiplied thirty-one times. The IRS calculates that the average filer spends ten times more paying off interest on debts than he gives to charitable causes.
If all evangelical Christians were out of debt, hundreds of millions of dollars would be freed up for God’s kingdom. Our families would be stronger, because financial pressures caused by indebtedness are major factors in more than half of divorces.
We speak with disdain of politicians not limiting their spending to available revenues. But our national debt is an extension of the same irresponsible mentality many of us demonstrate in our own lives.
Home mortgages, auto loans, and credit cards all seem normal to us, but debt is an aberration that evokes severe warnings from God’s Word. We must take a closer look at debt to understand the serious problem it poses.
Credit is a grant to pay later for what’s received now. Interest is the fee that the creditor receives and the debtor pays for his grant. Whenever a person goes into debt, he obtains money he hasn’t earned. In exchange for the money or possessions he presently receives, he mortgages his future time, energies, and assets.
One hundred years ago, debt was regarded as an earned privilege for the few. Now it’s seen as an inalienable right for all. Borrowing has become an integral part of our lives. Why do I receive mailings nearly every week telling me that $5,000 or $10,000 or $20,000 has already been approved for me and to receive it I need only send in the enclosed agreement? Why do banks and credit companies repeatedly beg me to borrow from them, listing dozens of ways I could use the money? Why are people so anxious to lend me money? The answer is simple—they want me to borrow because they will profit greatly from my debt.
Why does a credit card statement showing you owe $500 say that you only need to pay $35 this month? Because the creditors don’t want the debt repaid in full. If most people paid the full amount at the end of the month, the lenders would go bankrupt. They must get you to borrow, then pay back less than you owe for a long enough period of time that the money you pay them in interest is enough to make their profits.
Our self-centered, debt-centered economy is like those electronic bug-zappers. They emit a light attractive to insects that blissfully fly right into the trap, only to be killed.
“That’s a cool-looking stereo. And what a great sale! I don’t have any cash, but that’s no problem . . . here’s my Visa.”
ZAP!
What Does Scripture Say about Debt?
Proverbs sounds the alarm against debt (Proverbs 1:13-15; 17:18; 22:26-27; 27:13). Those in debt are warned to get out as soon as possible (Proverbs 6:1-5). Debt is bondage: “The rich rule over the poor, and the borrower is servant to the lender” (Proverbs 22:7).
The New American Standard Bible translates Romans 13:8 as follows: “Owe nothing to anyone.” This would appear to prohibit debt. The New International Version reads, “Let no debt remain outstanding.” This translation allows debt but only under conditions that it be paid off as soon as possible.
Hudson Taylor and Charles Spurgeon believed that Romans 13:8 prohibits debt altogether. However, if going into debt is always sin, it’s difficult to understand why Scripture gives guidelines about lending and even encourages lending under certain circumstances (see appendix C, “Lending Money, Charging Interest, and Co-signing a Loan.”) If debt is always sin, then lending is aiding and abetting sin, and God would never encourage it.
Being in a position to lend money to others is a blessing, whereas being the borrower is a curse (Deuteronomy 28:44-45). Unless there’s an overwhelming need to borrow, it’s unwise for God’s children to put themselves under the curse of indebtedness. At the very least, Romans 13:8 proves we shouldn’t normally borrow and should always pay off debt as soon as possible. The common practice of borrowing monthly and making partial payments violates this principle.
“The borrower is servant to the lender” doesn’t absolutely forbid debt, but it’s certainly a strong warning. God says we’re not to be servants of men (1 Corinthians 7:23). How can we be fully free to serve God when we’re indentured to human creditors?
The Mosaic Law reflects a strong connection between debtors and slaves. Both debts and slavery were canceled in the year of Jubilee. More often than not, the person was a slave because he was a debtor (Deuteronomy 15:2, 12). Unable to pay back debts, he was sold into slavery. Few sights are more pathetic than the well-meaning person who goes further and further into debt, one day waking up to realize he’s a lifelong slave.
Nehemiah tells of a terribly desperate time in Israel’s history:
Others were saying, “We are mortgaging our fields, our vineyards and our homes to get grain during the famine.” Still others were saying, “We have had to borrow money to pay the king’s tax on our fields and vineyards. . . . We have to subject our sons and daughters to slavery. Some of our daughters have already been enslaved, but we are power- less, because our fields and our vineyards belong to others.” (Nehemiah 5:3-5)
In a time of famine, the ultimate act of despair was to mortgage fields, vineyards, and homes. Clearly, such things should never be done under normal circumstances. Yet today, in the most affluent society in human history, it’s routine for people to mortgage fields, vineyards, and homes! Many wealthy people borrow every year to pay their taxes. Those who appear to be powerful “are powerless, because our fields and our vineyards belong to others.”
Debt is an extreme measure, resorted to in times of national crisis. Yet today it’s so normative that Christians routinely undertake it without prayerful consideration and counsel. “Everybody else does it—why not me?” Debt is increasingly common for the young. American 18- to 25-year-olds, including college students, have an average unpaid credit card balance of $1,700.148
Scripture discourages debt. It condemns the misuse of debt and the failure to repay debts (Psalm 37:21; Proverbs 3:27-28). If we take God’s Word seriously, we should avoid debt. In those rare cases where we go into debt, we should make every effort to get out as soon as possible (2 Kings 4:1; Matthew 5:25-26; 18:23-24). The question isn’t, “Why not go into debt?” but why? Unless the answer is extraordinarily convincing, we shouldn’t do it.
Some Initial Questions before Going into Debt
The best credit risks are those who won’t borrow in the first place. The worst credit risks are those who always think they need to borrow. Without a firm conviction against going into debt, people will inevitably find the “need” to borrow. Those with convictions against borrowing will always find ways to avoid it. (In other words, they’ll choose to spend less money.) The more you’re inclined to go into debt, the more probable it is that you shouldn’t.
The basic question is this: Is the money I will be obligated to repay, and the bondage it will create, worth the value I’ll receive by getting the money or possessions now?
When it comes time for me to repay my debt, what new needs will I have that my debt will keep me from meeting? Or what new wants will I have that will tempt me to go further into debt?
After warning against the dangers of indebtedness, several Christian books offer examples of cases when borrowing is appropriate. These exceptions include purchasing a house or a business, going to college, and even buying cars and furniture. Others make exceptions for so-called secured loans, those backed by collateral, including houses or cars that could be sold if the debtor can’t pay. Typically, we rationalize that our particular situation is one of these exceptional cases. But we should never go into debt unless there are compelling reasons. If we think our situation is an exception, we should seek out several wise counselors to see if they agree. (I emphasize “wise” to discourage you from seeking counsel from someone who believes that debt is normative.)
Deeper Questions about Debt
Before we incur a debt, we should ask ourselves some basic spiritual questions: Is not having enough resources to pay cash for what I want God’s way of telling me it isn’t his will for me to buy it? Is it possible that this thing may have been God’s will but I don’t have the resources to buy it because of past unwise decisions? If a lack of wisdom has put me in a position where I can’t afford to buy something, wouldn’t I do better to learn God’s lesson by forgoing it until—by his provision and my diligence—I save enough money?
The “debt mentality” involves six key assumptions:
• We need more than God has given us.
• God doesn’t know best what our needs are.
• God has failed to provide for our needs, forcing us to take matters into our own hands.
• If God doesn’t come through the way we think he should, we can find another way. Abraham tried this approach, which proved dishonoring to God (Genesis 16:2).
• Just because today’s income is sufficient to make our debt payments, tomorrow’s will be too.
• Our circumstances won’t change—our health will be good, we’ll keep our present job, our salary will keep up with inflation, and God won’t direct us to another job with a lower salary or lead us to increase our giving.
It’s one thing to trust God to provide for our present needs (Matthew 6:33). It’s another to presume upon him by dictating (via a decision to incur debt) the terms of his future provision. By choosing to go into debt, we twist God’s arm to provide not only for our needs, but also our wants.
Do we believe God knows best what our needs are? Debt spends money we don’t have. So isn’t our decision to go into debt proof that we believe we need more than God has given us? If we don’t have the resources to buy something, and if we feel such need for it that we’re borrowing to get it, aren’t we saying God has failed to meet our needs?
If God knows best, and if he knows what we need, then why hasn’t he provided sufficient funds? Is he encouraging us to pray for provision rather than take things into our own hands by borrowing? In this age where we seem unwilling to wait for anything, does God want us to learn what it means to “wait on the Lord” (Psalm 27:14; Isaiah 30:18)?
Some say, “I’ll just fill out the loan application. If it goes through, I’ll take that as a sign God wants me to borrow the money.” But just because a lender is willing to give us a loan doesn’t mean God approves of our decision to borrow the money, any more than a clerk’s willingness to sell us a lottery ticket would indicate that God approves of gambling.
More Questions about Debt
Before we go into debt, we should ask ourselves the following questions:
1. Is debt our way of getting around depending on God? (Why trust God to provide when we can get a loan?)
2. Is debt our means of short-circuiting the God-created means of acquisition—including work, saving, planning, self-discipline, patience, and waiting for divine provision?
3. What message are we sending to God when we go into debt rather than live on what he has provided? What are we really saying when we take out a loan? How does it reflect on our view of God? What are we saying about his sovereignty, goodness, wisdom, or timing?
4. What effect will going into debt today have on our ability or willingness to tithe and give voluntary offerings tomorrow?
5. What effect will today’s decision to go into debt have on tomorrow’s freedom to follow God wherever he wants us to go?
6. By taking out a loan that commits us to make payments over a number of years, are we presuming upon God? (Certainly, if we will require more income to make the payments, we’re presuming on God. We may “know” that we’ll receive a promotion and pay raise in September, but God hasn’t guaranteed it. Plans change, companies go out of business, and employees fail to get “certain” promotions.)
7. Although our income today might be enough to make debt payments over the next twenty years, is it right to assume that we’ll continue to generate the same level of income? (Many people’s income increases over the years, but many others’ decreases. Many incur increased financial commitments beyond their control, such as health-related expenses or caring for an elderly relative. People get laid off. Has God promised that can’t happen to us?)
8. Are we mortgaging the future to pay for the whims of the present? Are we mortgaging God by supposing to commit him to pay off something he may disapprove of?”
9. Is debt our way of getting around depending on God? of circumventing prayer, patience, and waiting on God to provide?
10. If we “must” go into debt to provide for our “needs,” is it because our “needs” are really wants in disguise? Have we spent so much money on our wants that there’s not enough left for our needs? Have we robbed God and forfeited his financial blessing by failing to give him the firstfruits?
11. Have we really exhausted all other avenues to avoid going into debt? Have we given up expensive activities, hobbies, and memberships, and liquidated valuable possessions? (Often, we think we have no choice but to go into debt, when in fact we’re making many unnecessary choices that drive us toward it.)
One of the strongest arguments for not going into debt is that we’re not God. We’re not sovereign, omniscient, or omnipotent. James 4:14 warns that we cannot know what will happen tomorrow. And if we don’t know and cannot control all that the future holds, how can we be sure that we can pay off new debts? We can be certain that God will provide for our basic material needs if we seek first his kingdom (Matthew 6:25-34), but where does the Bible promise that God will provide for all the debts we incur through our own greed, impatience, or presumption? If we are seeking first his kingdom, will we put ourselves in bondage to debt?
What about Borrowing to Buy a House?
Many financial counselors put home mortgages in a different category from other debts. One reason is that the loan is secured by the house’s equity. If financial crises arise and the payments can’t be made, the home can be sold and the equity—which is the current sale value of the house minus the amount still owed on the mortgage—can be regained. A case can certainly be made for borrowing to buy a reasonably priced house instead of renting. Although rental rates on houses may increase as much as 3 to 6 percent annually, the payments on a straight thirty-year mortgage remain constant throughout the life of the loan. Unless the economy slumps, or the house is located in an area with a depressed economy—and let me emphasize that both sometimes happen—the value of the house may also increase at 3 to 6 percent (or more) annually.
Unfortunately, many aspiring homeowners end up buying a house that’s out of their range. One common formula for figuring out what’s affordable is that the purchase price of a home shouldn’t be more than two-and-a-half times the family’s gross annual income. (But only count the income of the primary breadwinner—God may lead a wife and mother to quit her job for the benefit of the children. Housing decisions based on two incomes often prove disastrous, creating temptations to neglect parental responsibilities.)
The monthly payment for a home mortgage, including taxes and insurance, shouldn’t be much more than people are willing to pay for rent. Most of the monthly mortgage payment goes for interest, but there are tax deductions that will reduce the net cost. Money paid for rent isn’t tax deductible and doesn’t build equity; on the other hand, people always spend more on fixtures and decorations when they buy. So, borrowing for a home is sometimes wise and sometimes not.
Not all debt is the same. I’m sympathetic to farmers, accident victims, the unemployed, abandoned spouses, and others who find themselves in situations where, after prayer and evaluation, debt seems the best or only alternative. In such cases we need to trust God to help us get back out of debt as soon as possible.
Trust is believing God will take care of our basic needs. When we go into debt, however, we usually don’t do it to meet our needs but to fulfill our wants. We all need shelter, but do we need a particular house in a certain neighborhood? We all need food, but do we need to eat out? We need clothes, but do we need those with designer labels?
Often we define our wants as needs. Through debt we unconsciously try to maneuver God into a position where he’s obligated to “provide” in the form of our future payments. In a blasphemous role reversal, we set up the rules of the game and then expect God to play by them. Assuming the role of Master, we demote God to the obedient genie, who exists to underwrite our causes and fulfill our agendas. In such cases debt is not merely unwise, but evil.
When Debt Is Especially Dangerous
God sometimes disciplines us by making us face the consequences of unnecessary debt. When we go into debt for illegitimate reasons, we go on our own. God isn’t party to our decision, and he isn’t obligated to fulfill our financial commitment.
We bought our house in 1978 with a large down payment. Although we signed a thirty-year contract at a good interest rate, we increased the size of our payments in order to pay the loan off in thirteen years. By getting out of debt as soon as possible, we minimized both the amount and the duration of our indebtedness. Only two months after our last payment, our income was drastically decreased. With no house payment, we were able to get by on much less. Although we’re convinced our original decision to borrow for a home purchase was right, it’s our intention never to go into debt again. If we do, it will only be after carefully calculating the cost. Although we don’t believe that debt is always wrong, we’ve frequently witnessed disastrous consequences of unwise indebtedness.
1. Debt is especially dangerous when a possession’s resale value is less than what is owed.
Most purchases are high-depreciation items, including cars, clothes, and furniture. As soon as we buy such things, we typically cannot turn around and sell them without a significant loss. (The moment you sign your name on a contract to buy a new car, you lose thousands of dollars that you cannot recoup.) If we buy an asset that can definitely be resold at or above its original cost, we can at least get out of the debt by surrendering the asset. The steeper the depreciation, the greater the risk in a purchase and the greater our presumption in incurring debt.
Who can know which assets will appreciate? For years, many people in our area thought that houses always appreciate—yet many had to sell their homes during economic downturns for less than they paid. God and his principles are certain. The economy is not.
2. Debt is especially dangerous when it tempts us to violate our convictions.
A Christian couple at our church assumed a large home mortgage that depended on both their incomes. When the wife became pregnant, they realized that to keep the house they’d have to violate their convictions against leaving their child in a day-care center while the mother worked.
Whenever we make lifestyle decisions that tempt us to violate our convictions, the consequences are severe. This couple should never have put themselves in that situation. But they could have recognized their error, asked God’s forgiveness, and taken whatever losses were necessary to get out of bondage and into housing affordable for a single income. Instead, they opted to provide a beautiful house for their children to grow up in while robbing them of something far more important—the presence of their mother. In seeking a higher standard of living, this couple ended up sacrificing a higher standard of life. They and their children (now grown) paid a terrible price.
3. Debt is especially dangerous when we’re tempted to rob our primary creditor (God) to pay our secondary creditors (people).
Some Christians give nothing to God, while others reduce their giving to make monthly payments on conveniences. I’ve heard people say that it would be a “poor witness” not to pay their bills. They suppose that God would have them pay their creditors rather than give him the firstfruits. One Christian financial counselor routinely advises people not to give anything to God unless they are completely out of debt. (Some have received this advice from Consumer Credit Counseling Service, a service I otherwise recommend.)
If we’re faithful in our giving to God, only then can we look to him for help in finding the resources to pay others. God says when his people give him tithes and freewill offerings, he will “throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it” (Malachi 3:10). Isn’t that exactly what people need if they want to get out of debt? Not giving is never a financial solution—it’s a source of financial problems. God tells his people that because they spent money on themselves that they should have given to him, he put holes in their purses (Haggai 1:2-11). Jesus says that with the measure we give to God it will be given back to us (Luke 6:38). The more serious our financial problems, the more critical it is that we do what God says will result in his provision—give!
A creditor may say, “Nobody should give to their church until they pay me off.” But the firstfruits aren’t owed to the Church, they’re owed to God. Those who put God first are nearly always more responsible money handlers. Ultimately, they will pay off their human creditors. If creditors see that someone is making disciplined lifestyle choices, they will usually respect his or her commitment to give.
God will not eliminate the consequences of our unwise decisions. If by giving to God we can no longer afford to make payments on a loan, then we need to liquidate our assets, take losses where we must, and cut spending to a minimum to eliminate the payments. But we should never rob God—not for any reason, and certainly not to compensate for our self-indulgence!
4. Debt is especially dangerous when our monthly payments leave us little freedom to respond to the Holy Spirit’s promptings to give generously to meet others’ needs.
I’m speaking of freewill giving, above and beyond the tithe. Life brings numerous opportunities to meet others’ needs. This may involve giving cash, buying someone groceries, or taking them out to lunch. If our indebtedness leaves us unable to respond to God’s promptings, we’ve robbed ourselves and others of blessings.
5. Debt is especially dangerous when it restricts our freedom to respond to the Holy Spirit’s call to move or change.
God might desire to relocate us or change our job. How deeply rooted are we? How dependent are we on our current income level? How irreversibly committed are we to the possessions we’ve amassed and the financial obligations they entail? Are we so deeply obligated to maintaining a debt-oriented lifestyle that we can’t escape from it?
If God called you today to go to the mission field, how long would it take you to free yourself from your financial responsibilities in order to follow him? If God directed you today to go to Asia to share the gospel, or to go to Africa to work as a carpenter or serve as a nurse, how would you respond? Would you dismiss the thought because your debts demand a monthly income that immobilizes you?
Does it seem impossible for you to pull up stakes in response to God’s leading because debt has driven the stakes so deep? Has your borrowing robbed you of a pilgrim mentality? Has your indebtedness so deafened you to God’s voice that you wouldn’t even hear his call to pull up stakes?
What are some of the consequences of a debt-laden lifestyle?
1. Debt lingers. The new boat is fun for a while, but two years later, when it’s sitting in storage, the motor needs repair, and the kids don’t want to ski anymore, we’re still paying for it.
2. Debt causes worry and stress. Stress experts say that the bigger a person’s mortgage (or any debt), the bigger the stress. Debt is a serious enemy of mental health.
3. Debt causes denial of reality. We drive our bank-financed cars, running on credit card gas, to open a department-store charge account so we can fill our savings and loan-funded homes with installment-purchased furniture. We’re living a lie and hocking the future to finance it. When creditors call, many people won’t answer, believing that somehow they can go right on spending money they don’t have. One day it catches up—but by then integrity, relationships, and credibility have been ruined.
4. Debt leads to dishonesty. “The check’s in the mail” isn’t funny when you’ve heard it repeatedly from a Christian brother who is enslaved to debt—and now to dishonesty. Some people lie on credit applications, not revealing debt for fear they’ll be disqualified for further loans. Others desperately resort to criminal acts to try to keep up with their debt payments.
5. Debt is addictive. There are striking comparisons between debtors and drug addicts. The way out of both addictions can be very difficult. Those in debt with one income will almost always go into debt with two incomes, just as they will if the one income is doubled. Ninety-eight percent of the time debt is an internal problem, not an external one. It isn’t a matter of insufficient funds but insufficient self-control.
6. Debt is presumptuous. Scripture says the just shall live by faith. The borrower, however, lives by presumption. Undertaking any debt is a gamble that our future income will be sufficient to make payments. The Bible says we don’t know what a day may bring forth and we should not presume (Proverbs 27:1).
7. Debt deprives God of the chance to say no or to provide through a better means. God can give us direction either by providing funds or withholding them. When we borrow, we eliminate that second option and thereby blur God’s leading. If we really need something, there are alternatives to debt. One of them is to accumulate savings that will allow us a margin on which to draw when needed. But if the money for a need isn’t there, our first course should be to seek provision from God, not the banker (John 14:13-14).
8. Debt is a major loss of opportunity. Our loss isn’t simply the interest we’re paying. Our true loss is the difference between the money we’re losing and the money we could have earned with it. Worse yet, debt is a loss of opportunity to invest in eternity. Perhaps the greatest tragedy of debt is that it results in diminished giving, loss of opportunity to help others, and loss of eternal rewards.
9. Debt ties up resources and makes them unavailable for the kingdom of God. Whenever we’ve taught on giving at our church, many people say: “Now that I understand God’s principles of giving, I’d love to double or triple our giving, or even more. But we’re so strapped with debt, it’s just impossible.” Past unwise decisions inhibit present and future generosity. The solution is not to shrug our shoulders helplessly, but to give as much as we can now and commit ourselves to get out of financial bondage so we can give more in the future.
Our desire to have certain things clouds our thinking and leads us to rationalize by going into debt. Here are some of our primary illusions:
1. “The money we borrow is ours.” In fact, borrowed money belongs to us no more than a lawnmower we borrow from a neighbor. We must return borrowed money as surely as we must return a borrowed car.
2. “The amount we borrow is the amount we’ll end up paying back.” We will end up paying back far more than we borrow. If we buy a $200,000 house with a $20,000 down payment, borrowing $180,000 at 7.25 percent on a thirty-year contract, our $200,000 house will actually cost $442,000. So why call it a $200,000 house when we’re actually paying well over twice that much?
3. “Borrowing actually saves us money because of the tax benefits.” If we’re in the 20 percent tax bracket, whenever we spend $100 on deductible interest (not all interest is deductible), then that means we’ve saved twenty dollars, right? Wrong. We haven’t saved $20; we’ve spent $80.
When we bought our home, we were advised to take out the longest term loan possible because of the great tax savings generated by deductible interest. When I looked it over, I realized that desiring to pay more interest in order to get tax savings was like giving someone $100 in exchange for $20, then bragging that I’d come out $20 ahead. Of course, those in higher tax brackets receive a larger “rebate” on their interest. But this doesn’t change the deficit nature of debt. When we’re in debt, we’re under obligation. Our desire should be to pay less interest over time, not more.
4. “It’s foolish to pay back a loan that has lower interest than your money can make somewhere else.” This is the philosophy of “using other people’s money.” Although it may appear to be valid on paper, it overlooks a critical element. Debt is a real burden, not an imaginary one. Removing debt is removing a burden. As long as we owe money, we’re a servant. Someone else has a hold on our assets. There’s a great mental and spiritual release when we get out of debt. Scripture says we must let no debt remain outstanding (Romans 13:8). It doesn’t add “unless we can get higher interest on our money somewhere else.”
I can’t adequately describe the freedom we experienced by paying off our house early twelve years ago. Even if we could have made more money in another fashion, getting out of debt was tremendously liberating. It also helped immeasurably in facing the major financial challenge that followed only a few months later. We had no way of knowing what was coming, but God did.
Owning a home is not a God-given right—and it may or may not be a wise financial choice. People are fond of saying, “Renting is like pouring money down the drain.” Not so. When you rent, you get what you pay for—a place to live! It’s also incorrect to say that buying a house always pays off. Often it does, but not always.
Even when a home is appreciating in value it has hidden costs that renters don’t have to pick up. A monthly house payment doesn’t include the cost of replacing the door, fixing the plumbing, hiring someone to clean the sewer line, fixing the broken garage door, or rebuilding the sagging deck. Nor does it include having to repair or replace the refrigerator, hot-water heater, or dishwasher.
On the other hand, rental property repair expenses have to be paid for somehow, and because the landlord isn’t in business to lose money, he passes on those costs to the renter in the form of higher rental rates. If the decision is made to buy instead of rent, make certain the house is in good condition and see that repairs and improvements are budgeted. Most homeowners find that the growing equity in a house, through debt retirement and property value appreciation, more than compensates for repairs and replacement costs. On the other hand, people spend more discretionary income on houses. Often they become more reluctant to move and less flexible to God’s leading to go overseas or serve elsewhere.
If you do buy a house, be sure it’s well within your budget. Don’t allow a real estate agent to show you houses above your budget. Anything you look at will become a temptation and cause dissatisfaction with what you can actually afford.
We have an unlimited capacity to rationalize overspending on houses and cars. Studies in The Wall Street Journal prove that it’s far less expensive to maintain a used car than buy a new one. “The cheapest car anyone can ever own is always the car they presently own,” and “The longer a car is driven, the cheaper it becomes to operate.”149
Yet when we get the “car bug,” we make irrational decisions. A man “on a tight budget” tried to explain how he’d made a wise decision buying a brand- new car that got forty miles per gallon to replace his old paid-for car (still running fine) that got only twenty-five miles per gallon. This man had committed himself to paying $270 per month in order to “save” $30 per month. He was coming out $240 per month behind. Given the high depreciation on his new car, by the time he was finished with his payments it would be worth little more than his old, fully depreciated car. Yet his desire for the new car was so strong it overrode all reason, convincing him he’d made a wise “investment.”
Seventy-five thousand people each day in the United Sates receive approval for Visa and MasterCard credit cards. For many, it’s a turn into a downward spiral. Finance companies trip over themselves in their attempts to persuade consumers to get another credit card. They give prizes just for filling out an application form. How easy is it to get credit in America? One man with an income of $27,000 owns more than 800 credit cards. His credit line is $9 million per month.
In 1996, USA Today claimed that the average American household owed $4,010 in credit card debt.150 (This included households that didn’t own any credit cards.) In 2000, “The American Credit Counselors Corporation estimated the average American credit card holder owes $13,000 to credit card companies.” The National Association of Colleges and Employers reports that 22 percent of college students owe more than $7,500 on credit cards.151
Credit cards facilitate impulse buying, which is nearly always unnecessary and self-indulgent. When using credit, consumers buy more, buy what they don’t need, and pay more for it. Why? Because credit cards lie to us—they make us think we have money when we really don’t.
Considering that only a century ago it was generally considered a sin for Christians to go into debt, it’s amazing that credit cards have been so widely accepted in the Christian community. Christian ministries and increasing numbers of churches accept credit card donations. Many Christian colleges sponsor their own credit card for alumni, encouraging them to use it regularly because a small amount of money from each purchase is “given” to the college by the credit card company.
Like being handed the controls of a deadly weapon with a hair trigger, many people are propelled by their credit cards into irresponsible debt that entails exorbitant interest, often 15 to 20 percent annually. (And even when it’s under 10 percent, it adds up quickly.) The person with a $2,000 balance (at 19.5 percent interest) is told he can pay just $75. But he doesn’t realize that the first $32.50 of that $75 is interest. He goes right on charging “sale” items and digging an ever deeper hole.
If you carry a $7,000 balance on an 18 percent credit card and pay the 2 percent minimum payment each month, you’ll end up paying more than $20,000 for that $7,000. All those things you bought at half price? They may cost you three times what you think they did.
Some people use credit cards for the convenience, paying off the full amount owed on every statement, so they don’t ever pay interest costs. We do this ourselves, and in twenty-five years we have never paid any interest. This approach has advantages, but it also has drawbacks. Citibank calculates that a consumer using a credit card will buy 26 percent more than he would if he were carrying cash, even if he pays it all off without interest charges. The convenience of having a credit card is also a liability—its very convenience constitutes temptation.
Here are some simple rules for using credit cards:
• Never use your credit cards for anything except budgeted purchases.
• Pay off your credit cards every month.
• The first month you have a credit card bill you cannot pay in full, destroy the card and don’t get another one.
Even if you pay the full amount when due and avoid interest charges, if it’s psychologically easier for you to lay down a credit card than to part with cash, you shouldn’t own a credit card. If you determine to carry a credit card and say, “I won’t use it except for emergencies when I would have used cash anyway,” you may minimize the drawbacks. But keep an eye on your spending. For many people, the only solution to credit card abuse is plastic surgery—cut the card in half.
Many churches spend more on interest payments than on world missions. Debt ties the church’s hands. If attendance drops, the economy suffers, or giving dips, then pastors or missionaries must go unpaid. The building completed eight years ago, already needing repairs, keeps demanding those monthly payments, mostly going to interest.
Scripture mentions three major building programs. Each was financed directly by up-front giving. There were no tabernacle bonds, no borrowing, no pledges—just straightforward giving. People gave more than enough and had to be restrained from giving to the tabernacle (Exodus 36:6-7). Notice the terms “willing heart,” “whose heart stirred him,” “whose heart moved him,” and “everyone who could” (Exodus 35:5–36:2).
The same was true in building the temple. Three times in a single passage it says that the people “offered willingly” (1 Chronicles 29:6, 9, 17).
We see the same thing hundreds of years later when the temple needed to be rebuilt. “Everyone whose heart God had moved” made “freewill offerings” (Ezra 1:5-6). They “gave freewill offerings” and “according to their ability they gave” (Ezra 2:68-69). The words freewill offering and offered willingly appear repeatedly (Ezra 7:16).
In each of these three building projects, the work didn’t begin until it was obvious that the project could be completed without borrowing.
There are no New Testament examples of church building construction, but Jesus clearly states that any such project should only be undertaken with the certainty of having sufficient funds for completion:
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? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, “This fellow began to build and was not able to finish.” (Luke 14:28-30)
Many argue that church buildings cannot be constructed debt free. But this argument would be far more believable in the relative poverty surrounding Old Testament building projects. Do we really believe that God could empower poor Israelites to do what Christians cannot do today?
Lack of money to support the work of a church is usually rooted in a lack of conviction among church members. To borrow money without addressing this reality is a terrible mistake. Countless churches have gone deeply into debt over ill-advised building projects. Horror stories abound of buildings that were never finished, or buildings that, when finally finished, have sanctuaries that are mostly empty because the church split or dissipated under financial pressure. When a church overextends itself financially, it inevitably spends more time during services trying to persuade people to give to the building fund. This changes the focus from worshiping Christ, studying the Scriptures, and meeting the needs of the community to concerns about buildings, mortgages, and money. Typically, before it’s all over, people start leaving the church. In contrast, churches that build debt-free—and yes, many have done it—almost always tell great success stories.
Addressing the subject of debt, Hudson Taylor said:
It is really just as easy for God to give beforehand. He prefers to do so. He is too wise to allow His purpose to be frustrated for lack of a little money; but money wrongly placed or obtained in unspiritual ways is sure to hinder blessing.
And what does going into debt really mean? It means that God has not supplied your need. You trusted Him, but He has not given you the money; so you supply yourself, and borrow. If we can only wait right up to the time, God cannot lie, God cannot forget: He is pledged to supply all your need.152
A pastor of a debt-free church said, “If you get a loan, your congregation never has to trust God, they just trust the bank. And when it’s all over, they look around and say, ‘Look at what the bank built.’ When they say, ‘Praise God for what he did,’ there’s an asterisk beside it. But when you build debt-free and say, “Praise God,’ there’s no asterisk. It’s all God’s doing.”153
According to Jeff Berg and Jim Burgess in The Debt-Free Church, when a ministry borrows money, it incurs the following set of risks:
• Becoming the slave of a lending institution
• Becoming a slave to big givers
• Becoming trapped by financial pressure
• Becoming mired in an endless cycle of borrowing
• Losing flexibility to respond to ministry opportunities.154
In the Old Testament building projects, future ministry was paid for with present money. But churches that borrow pay for present ministry with future money. In each biblical instance, the people didn’t merely promise to give, they actually gave the funds before construction began or as they were needed. Why can’t—or why shouldn’t—we do the same?
Early in our own church’s history, we discovered that if people aren’t inclined to give significantly toward a project, it’s an indication that their hearts aren’t in it. And if people’s hearts aren’t in a project, it shouldn’t be undertaken. It’s healthy to stretch our faith, but a church’s building projects should never exceed its convictions. (That’s why I think it’s normally a mistake to seek outside funding for a building project. The church should undertake only what it’s willing to give itself to.)
With “pay as you go” building projects, offerings gauge the hearts of the people. When borrowing, leaders often find out too late—the hard way—that people aren’t behind the project. And some are no longer part of the church.
The Church should model for its people wise stewardship that avoids presumption and financial bondage.
“But unless you’re already rich, you can’t build a house or a church building or go into business without borrowing money.” Not true. At every income level, there are many examples of debt-free churches and families.155 Although they’re in the minority, there are also many businesspeople, Christian and otherwise, who have saved up money for years in order to go into business debt-free. Unlike their competitors, they’re able to ride out economic ups and downs because they’re not saddled with debt. They don’t use other people’s money to grow and expand too fast, only to find they’ve overextended themselves so they wind up filing for bankruptcy.
With discipline, purpose, and patience, a business can be started and maintained without debt—and so can a church building project. Likewise, the average individual who buys a lower-priced house with a down payment of 10 percent could have most of the house paid for by diligently saving for six or seven years, and all of it paid for by saving for twelve—with interest working for him instead of against him. The problem isn’t lack of resources but lack of discipline and patience.
Although the New Testament doesn’t give an account of fund-raising for a building project, Acts 4:32-35 shows how the Church responded to other needs—they gave immediately. As a result, “there were no needy persons among them” (Acts 4:34). Later, the poverty-stricken Macedonian church followed this same model to send money to feed the hungry in Jerusalem (2 Corinthians 8:1-5).
New Testament Christians had far less than we have, but by giving generously and sacrificially they fully met every need. Although there were many moneylenders, both in Old Testament and New Testament times, we don’t see a single example of the Church (or Israel) borrowing money to accomplish God’s work. Why do we believe—or, why do we assume—that with our relative material abundance the Lord would have us resort to measures unheard of in biblical times?
Some Benefits of Not Borrowing for Church Building
• Creates a greater dependence upon God
• Allows God to show his faithfulness
• Teaches the importance of sacrificial giving (2 Corinthians 8:1-5)
• Teaches people to avoid debt and bondageTestifies to the world about the reality of the gospel (Philippians 2:15; 1 Peter 2:9, 12)
• Promotes biblical fund-raising by simply presenting the ministry need and trusting God to provide through the generous giving of his people (1 Corinthians 16:1-2)
• Sets a financial example for believers (1 Timothy 3:4-5, 12)
• Helps guard ministries from hard economic times (Proverbs 22:27)
• Allows flexibility for a church to respond to ministry opportunities156
Is Borrowing an Act of Faith?
Strangely, going into debt for building projects is often portrayed as an act of great faith—the greater the debt, the greater the faith. The Bible suggests the opposite. It’s not faith to test God’s provision with presumption. It’s not faith to depend on a lending institution instead of on God’s supernatural provision. Some would say, “It takes faith to pay back a loan.” If this were true, then the proper conclusion would be, The larger the loan and the less collateral, the greater the faith. But such a viewpoint violates every biblical caution about borrowing, as well as Christ’s explicit warning not to begin building when you lack the required resources (Luke 14:28-30). Notice he doesn’t say the man who undertakes a building project without sufficient funds to complete it is “a man of faith.” Instead, he describes him as an object of ridicule.
Another common argument is this: “When you wait until you have the means to proceed to build, that’s not walking by faith—it’s walking by sight.” This perspective ignores the biblical examples of building and God’s method of advancing ministries. When churches borrow, they obligate God to provide in the future what he has not made available in the present. That’s not faith, but presumption. Greater risk does not always indicate greater faith. Sometimes it indicates faith in ourselves—or laziness, if we’re unwilling to give money in advance in order to experience the fruit of a debt-free building project.
Finally, the Scripture passages about building the tabernacle and the temple demonstrate God’s way of fund-raising for building prospects: Start the building when the money is in hand.
Churches and ministries should be careful when they teach from the passages that deal with Israel’s three building projects. God revealed that he wanted Israel to undertake these projects, but these texts do not prove that God is in favor of every building project. They simply show a model for how to fund and build the projects that God approves. There is no biblical basis on which to conclude that God endorses or opposes a particular church building project. Churches and their leaders should seek God’s direction and ask his wisdom before undertaking a building project (James 1:5).
Leaders must be careful not to misappropriate passages of Scripture—such as the story of the two spies who had faith and the ten who did not (Numbers 13:1–14:45)—to prove that a building project is God’s will and that those who question it are questioning God. To treat specific projects, as if God himself has passed them down from Mount Sinai, is to invite disunity in the church family.
I do believe that God sometimes—in fact, often—leads churches to construct buildings. Buildings can be part of an effective ministry strategy. (For more on this subject, see appendix B, “The Use of Ministry Funds for Buildings.”)
Scripture makes it clear that if we’ve borrowed money, whether for good reasons or bad, it’s our responsibility to pay it back as soon as possible (Proverbs 3:27-28; Matthew 5:25-26). To not repay a debt is to join ranks with the wicked (Psalm 37:21). Bankruptcy—no matter how legal it may be—is normally not a moral option. I know people of integrity who have come out of bankruptcy proceedings with the legal right not to pay back a dime to others, but who, as a matter of conscience, have dedicated themselves to paying it back anyway over the next decade or more. I believe God is honored by this.
If you are in debt, two questions are relevant: How did you get into debt, and how can you get out? The reason the first question is important is to help you make future decisions. If you’ve gotten into debt unwisely, you should do more than get out of debt; you should also recognize that you’ve made wrong choices and commit yourself not to repeat them. Debt isn’t the main problem; it’s a symptom of a more basic problem—greed, impulsiveness, and lack of discipline. This is what we must bring before God.
How to Get out of Debt
Here’s a ten-step process to help you get out of debt:
1. Repent. Acknowledge that you’ve taken your cues from the world, not God. Change your mind and your actions regarding money, things, needs, wants, giving, saving, spending, and debt. “Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing, and perfect will” (Romans 12:2).
2. Immediately give God the firstfruits. When we give to God the first and best of our income, we say in effect to him, “I recognize your ownership and trust you to bless my obedience.”
Never rationalize disobedience. It’s self-contradictory to seek God’s blessing on your finances while putting yourself under his curse by withholding the tithe and offerings he has directed you to give. More than anything, you need his blessing to get out of debt.
Don’t just gradually increase your giving until it gets up to a tithe, any more than you’d gradually stop robbing banks. Stop robbing God now. (You might also ask him if he wants you to start paying back what you’ve robbed him of in the past.) Please God in this way and he will bless you, even if it involves making significant lifestyle changes.
3. Incur no new debts. Operate on this principle: “If I can’t afford it now, it isn’t God’s will now.”
4. Systematically eliminate existing debts. Draw up a careful budget. Make a specific plan to get out of debt. Seek wise financial counsel. Liquidate unnecessary assets. It won’t happen overnight, but with a good plan and determination you can and will get out of debt.
5. Perform plastic surgery on your credit cards. If the card is a temptation, destroy it. The exception is if you always make full payment when due (so you never pay interest) and it is no easier for you to put down the card than to put down cash. Warning: Remember the studies showing that those who use credit cards—even if they pay them off monthly—usually spend more than if they only use cash. Watch out for the illusion that using the card isn’t really spending.
6. Stop rationalizing your debt habit. Houses and cars are the strongest temptations for some, whereas for others it is furniture, clothing, or electronic equipment. Recognize your weakness and don’t let it master you. When it comes to houses, remember this: The Carpenter from Nazareth is making the perfect home for you in heaven (John 14:2-3). It’s not here and now, it’s then and there! Instead of moving up to a bigger and better house, is it possible that God wants you to use his money here and now to send ahead building materials for his construction project in heaven? (Matthew 6:19-21).
7. If debt seems the best or a necessary choice, go slowly and prayerfully. Get objective financial counsel from good stewards (Proverbs 15:22). Seek financial wisdom only from those who have proven financially wise.
8. Learn the difference between saving and spending. Saving is when you have more money than when you started; spending is when you have less. If you buy an $80 sweater on sale for $30, how much money do you save? Most people would say $50. Wrong. You don’t save anything. You spend $30. Far too many people have “saved” themselves into financial bondage.
9. List your debts and, if necessary, contact your creditors. Establish a schedule that’s workable within your budget to repay your creditors. By comparing the different interest rates on your debts, prioritize your debt reduction, paying off most quickly those with the highest interest.
If your debt is beyond your ability to pay at prescribed levels, explain your plan of repayment to your creditors. Normally they will welcome your plan, because they’re often faced with bankruptcies in which they receive little or nothing. Eliminate smaller debts and consolidate your remaining debts in order to pay as few bills as possible. Liquidate unnecessary assets and use the funds to reduce debts. You may be able to move into less expensive housing, get a cheaper car, sell the boat or RV, and convert other unused or unneeded items to cash.
In this process, it’s usually important to get wise counsel. We typically get into financial trouble acting on our own, so we shouldn’t expect to get out of it the same way. You may receive wise counsel from a friend, a counselor, or a church leader. In some areas you can contact the Consumer Credit Counseling Service, which offers debt counseling at no cost. (But I’ll say it again—if you’re advised not to give or tithe until you’re out of debt, reject this counsel. Remember, robbing God isn’t a solution, it’s a big part of the problem.)
10. If you’ve done everything else and it still seems insufficient, consider ways to increase your income in order to eliminate your debts.
If you are already working full-time, more work isn’t a long-term solution. Still, a second job or household business may be a temporary necessity to reverse the consequences of past decisions.
Be patient. It may have taken you five, ten, twenty, or thirty years to get into the financial situation you’re in. It can’t be reversed overnight. However, by following these guidelines, you’ll be well on your way out of bondage. You’ll also start to experience the freedom of being able to respond generously to needs and eternal investment opportunities. This will bring to you the joy of giving and God’s grace and blessing that come with it.
Financial Principles to Live By
• Nothing is a good deal unless you can afford it.
• Before you take matters into your own hands, God wants an opportunity either to provide your needs or to show you that they aren’t really needs.
• Just because you can afford something doesn’t mean God wants you to get it.
• Increased income doesn’t necessarily mean that God is saying spend more. More often, his real message is give more (2 Corinthians 8:14; 9:10-11).
Years ago, some friends of ours went deeply into debt to purchase a nice house. At a time when the average house payment was $500, they were making payments of $880 per month—in addition to the never-ending hidden costs of home ownership. For years they experienced great financial bondage. They despaired because they wanted to give freely to needs that God laid on their hearts, but the house left them no money. Finally they made a difficult and courageous decision: They walked away from the house, took their losses, swallowed their pride, and found housing they could afford. Immediately they experienced God’s blessing. And after renting for several years, they saved up enough money to buy a home they could afford.
All I have needed Thy hand hath provided—Great is Thy faithfulness, Lord, unto me!
We sing it, but do we mean it? Our lifestyle of debt tempts us and allows us to pursue what God hasn’t provided and doesn’t intend for us. Will we take the hard but liberating steps to get ourselves out of debt’s grip and into the only hands in which we’re safe—God’s?
There remains one debt to which all our money and possessions must be unreservedly committed, yet which we can never retire: “Let no debt remain outstanding, except the continuing debt to love one another” (Romans 13:8). Origen, the Church father, put it this way: “The debt of love is permanent, so we must pay it daily and yet always owe it.”