The Power of Debt

Debt can be a very powerful tool. Most of us live with or under this tool. Have you considered debt a good or bad thing? The Bible does not say it is a sin to have debt, whether to borrow or to lend. In today’s culture, borrowing is not only common, it is a necessity to help pay for education, travel, and our house, to name a few. Our view of debt may depend on whether it’s personal vs. business, generational, economic status, or social and economic values. In many cases, debt can help us build or may tear things down. Nonetheless, debt is an integral part of our culture, and depending on how we manage it for business or personal, our lives can be fruitful. 

Economically speaking, debt is a main driver for “success.” Companies use debt to boost their Research and Development (R&D) or provide additional liquidity to keep their vendors happy by paying their bills on time. Hedge funds and large investors may see a business increased debt as a positive and believe that a company with increasing debt is progressive and innovative in part. In a world changing at lightning speed, debt may be the only way to keep up or compete with their rivals. Thus, debt used wisely has its place in the market. 

What about personal debt? We grow up seeing debt as a way to get money fast. A way to keep up with the Jones. A way to finish our education. We start our adult life, career, or family with a mountain of debt, and that is before we buy a home. And before we know it, we have credit card debt of around $50,000, a student loan over $100,000, a car loan at $30,000, and a home loan north of $250,000. Then come the kids, and they are not cheap! Before you know it, you and your spouse need to work to keep one nostril above water, economically speaking. 

While living south of Seattle, Washington, my wife and I had a neighbor that decided to work two jobs to pay the mortgage on their large home. As a result, there was no time for the family, and the children were growing up without their dad around. When asked if he realized the price he was paying by not spending time with his family, he shrugged and said, “but I love my house.” 

Debt has its place, whether for business or personal. The key is to use debt in a balanced way. You do not want debt to own you. Consider debt as a short-term tool for a long-term goal. When buying a home, consider your net income or take-home pay (what you deposit in your bank). When getting a mortgage for your home, try paying the monthly payments and the rest of your monthly expenses with one salary. It helps if/when you or your spouse lose your job. We need to be reasonable with our expenses so we may honor God as a responsible steward and remembering that tithe and offerings are an important part of our stewardship. When we balance our lifestyle, we gain freedom. When things own and run our lives, we give up valuable experiences that we may never be able to make up. 

Whether you believe debt is a good thing or not, we may want to consider what we are giving up or giving ourselves into when acquiring debt. For many of us, debt is a part of life. However, how we use the debt may affect our family, happiness, relationships, and one of our most valuable possessions, our time on this earth. 

So, how will you choose debt to affect you?