Debt is as much a pandemic as any virus because it touches so many people. It’s estimated that 75% of the world is in debt. Global debt reached $255 trillion in 2019, and in 2008 the time of the global financial crisis, debt was at $97 trillion. In twelve years debt has increased by 163%.
What does the Bible say about going into debt?
Paul’s charge to us in Romans 13:8 to owe nothing but love is a powerful reminder of God’s distaste for all forms of debt that are not being paid in a timely manner (see also Psalm 37:21). At the same time, the Bible does not explicitly command against all forms of debt. The Bible warns against debt, and extols the virtue of not going into debt, but does not forbid debt. The Bible has harsh words of condemnation for lenders who abuse those who are bound to them in debt, but it does not condemn the debtor.
Some people question the charging of any interest on loans, but several times in the Bible we see that a fair interest rate is expected to be received on borrowed money (Proverbs 28:8; Matthew 25:27). In ancient Israel the Law did prohibit charging interest on one category of loans—those made to the poor (Leviticus 25:35-38). This law had many social, financial, and spiritual implications, but two are especially worth mentioning. First, the law genuinely helped the poor by not making their situation worse. It was bad enough to have fallen into poverty, and it could be humiliating to have to seek assistance. But if, in addition to repaying the loan, a poor person had to make crushing interest payments, the obligation would be more hurtful than helpful.
Second, the law taught an important spiritual lesson. For a lender to forego interest on a loan to a poor person would be an act of mercy. He would be losing the use of that money while it was loaned out. Yet that would be a tangible way of expressing gratitude to God for His mercy in not charging His people “interest” for the grace He has extended to them. Just as God had mercifully brought the Israelites out of Egypt when they were nothing but penniless slaves and had given them a land of their own (Leviticus 25:38), so He expected them to express similar kindness to their own poor citizens.
Christians are in a parallel situation. The life, death, and resurrection of Jesus has paid our sin debt to God. Now, as we have opportunity, we can help others in need, particularly fellow believers, with loans that do not escalate their troubles. Jesus even gave a parable along these lines about two creditors and their attitude toward forgiveness (Matthew 18:23-35).
The Bible neither expressly forbids nor condones the borrowing of money. The wisdom of the Bible teaches us that it is usually not a good idea to go into debt. Debt essentially makes us a slave to the one who provides the loan. At the same time, in some situations going into debt is a “necessary evil.” As long as money is being handled wisely and the debt payments are manageable, a Christian can take on the burden of financial debt if it is absolutely necessary.
What is Debt?
Here’s your basic definition: If you owe any money to anyone for any reason—that’s debt. Now that we’ve got that foundation, let’s talk about what you can do to get debt out of your life. Forever and ever.
Step 1 - Find Out How Much Debt You Have
Think of it like this: You can’t climb a mountain if you don’t know how big it is. And you can’t knock down giants if you don’t face them. Didn’t Socrates say something like that? No? Well, it’s solid wisdom anyway.
If you want to pay off your debt, you’ve got to face the truth of your total debt amount. But listen, this isn’t a moment of defeat—it’s the first step to victory! You can defeat your debt. And you will.
But first, you’ve got to know how much debt you have to fight. Look up all your debt balances and write them down.
List all of your debts from smallest to largest on paper (not in your head, because you need to see the data. Make 3 columns, listing who you owe the money to, how much total money you owe each, and if you make a payment each month, how much is the payment.
Step 2 - Find out How Much Income You Have
List out all sources of income you generate each month. It could be from a salaried job, or side hustles for cash.. Anything that you do where you receive money. Add them all up and that is your monthly income.
Step 3 - Get on a Budget
A budget is simply a plan for your money. It’s how you tell every single dollar where to go so you don’t wonder where they all went. And right now, you have no time for lost dollars. You’ve got work lined up for that money: You’re paying off debt.
So, create a budget. Right now! Cover all the essentials, cut out some extras (just for a season, so you can throw more at your debt!), and make sure you’re budgeting for your debt-payoff goal.
Step 4 - Use the Debt Snowball Method
Now that you’ve got your budget set, it’s time to start paying off debt! And the best way to do just that is with the debt snowball method. It’s how you build momentum, because you’re paying off your debts in order from smallest to largest. Yup, that’s right. Start with the lowest debt.
Okay, we know there are a lot of people out there who say you should pay off your largest debt or the one with the highest interest rate first. That math makes sense on the surface—but if we were doing math, we wouldn’t have gone into debt in the first place. Plus, paying off debt is about more than just the numbers. It’s about behavior change.
If you’re going to get rid of your debt once and for all, you need to see quick wins and feel like you’re making progress—that’s where the debt snowball comes in.
How the Debt Snowball Works
Remember the list of debts you wrote out? Put them in order from smallest to largest, ignoring the interest rates.
* Make minimum payments on all debts—except for the smallest one. Attack that one with all the extra money you can get. This includes the money you freed up when you were budgeting. (We’ll dive deeper into this in the Tips for How to Pay Off Debt Faster section.)
* Once the smallest debt is gone, pack that payment (and the extra money) onto the next-smallest debt and pay it off.
* Repeat until every single debt is gone.
* Like a snowball rolling down a hill, the amount you’re paying on your debt grows in size and gains momentum with every debt you pay off.
Step 5 - Stop Using Debt
You’ll never climb out of a hole if don’t stop digging. When you decide to pay off debt, that means you’re breaking up with debt. For good. No more swiping the credit card. No more same-as-cash scams. No more financing fancy cars.
It does you no good paying off debt just so you can get back in debt. Get out of the hole. Breathe the fresh air of freedom. And never go back.
Never Go Back!
Ask God to help you and guide you as you pay off your debts. Pray that God speak to your debtors to give you mercy and grace as you put your faith to work and your work to faith!
By creating momentum, God sees you are seriously obedient to Him, and He will then do what he does best... Miracles!
If you look in God's Word, the Holy Bible, every time God and Jesus did a miracle, He first suggested a human to go into motion. At the wedding feast in John 2:1-11, Jesus turned water into wine. Before he performed this miracle, Jesus made a request of the people who wanted more wine. He told a few people to get up, walk over to where the jugs were, fill them with water and bring them back to Him. Certainly, Jesus could have snapped his fingers and just made wine appear in the empty jugs.. but He didn't.
Why? Because God works through our obedience. The Bible says that "Obedience is better than Sacrifice." Was is a sacrifice to stop relaxing and obey Jesus? Yes.. but the obedience was more important.
If you would like your life to change in an instant, consider giving your life to Jesus Christ. Jesus died for you, me, and everyone who has ever been or will be on earth.
To learn more about this amazing God who gave His life so you may live, go to: https://www.asafeplaceonline.
“For if a man belongs to Christ, he is a new creation. The old life is gone. New life has begun.” 2 Corinthians 5:17