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The Storm Warnings of Debt

It's a sign of our times that wherever small groups pause to talk, whether it be at the break area or Sunday school class, debt is likely to be discussed. Debt has increased as if we have been inoculated against its dangers. A startling fact that supports our immune condition: Today banks are offering a new level of credit to consumers, up 33% in one year to over $1 trillion with the average credit card debt near $3,900.

God's word brings a different message than we generally hear from the media and those who make their living in the financial markets. "The prudent man foreseeth the evil and hideth himself: but the simple pass on and are punished" (Prov. 22:3).

What does it take to correct the uncontrollable spending in a nation consumed with a materialistic focus and a national debt pushing six trillion? The media reports would have one believe that "confidence is high" while they fail to report that personal bankruptcies again made an upward turn last year and could reach more than 800,000 filings.

It is easy to flippantly blame rising debt on greed, people with no discipline or the credit card industry, but an introspective look will show that even Christians consistently disregard scriptural warnings in this area. We allow the world's philosophy to influence our personal lives while failing to internalize the biblical truths that guide us to live out the life of Christ before an unbelieving world. This world, without Christ, is not impressed with the body of believers that look and behave like the rest of society. Ironically, even the world expects more from us, and our failure to follow God's way only dilutes our influence in this dark age.

Our Lord Jesus used an example in John 10 that might give us insight into this matter. Christ stated that He was the good shepherd, His sheep (that's us) hear His voice and follow Him because they know His voice. However, in verse 5, there are words we often forget: The stranger they will not follow, but will flee from him for they know not the voice of the stranger.

It is my belief, from my personal and counseling experience, that people in financial crisis have listened to the voice of the stranger, a voice of half truth that sounds believable but is cloaked in deception. We've put more trust in the philosophy of our business schools than in the truth of God's word, believing worldly financial myths that appear wise, but have little or no actual truth.

Myth #1

Financial freedom is impossible

People often interchange the term financial security for financial freedom. Yet, financial security may be impossible to attain because its focus is: "How much is enough?" Financial freedom, on the other hand, can be achieved because it involves an attitude of the heart, involving surrender and obedience. It deals with the issue of who is the owner, (Ps. 24:1) and our position as a steward (I Cor. 4:2). I am confident that if we settle the freedom issue the security issue will take on a new meaning.

Myth #2

Buy now, it will cost more later

This could be valid for particular items in an economy with rapid inflation but it is not a universal truth. Think about the price of the first personal computers (10 years ago) or the first color television (1950's - 1960's) and compare that to the highly competitive market of electronics today, not to mention the advances in technology. In reality, you will probably be able to buy more for less later.

Myth #3

The inflation rate is the same for all people

Sounds great, but it is not exactly true. Reported inflation rates actually vary by geographical location across our nation. For your consideration, I offer that a cash reserve for your family permits you to buy in bulk and/or on sale, thus allowing you to exercise a hedge against the inflation rate. This, as opposed to someone who is forced to make a purchase at the going market price due to inadequate cash reserves. As a simple example, it is always cheaper to buy soda at the grocery store in liter bottles when it's on sale than to buy it out of a vending machine when the need is immediate.

Myth #4

I can't afford to pay off my mortgage — I'll lose my tax deduction

Ever heard that? This is probably the most widely accepted myth. But allow me to illustrate: You give me a dollar, and I give you back 30 cents. Now, how many times will you make that exchange? That's exactly what the federal government (IRS) does with each dollar you pay in interest if you itemize your deductions. Each dollar of interest paid to the mortgage company may be listed as an itemized deduction for which there is no tax obligation on that amount. If you pay 30% federal tax (insert your personal tax rate — it gets worse the lower the tax rate), then you actually get a $0.30 tax credit for each dollar of interest paid. Think about paying a dollar of interest to get 30 cents returned, not the best financial decision. Many families are accelerating the payment schedule which reduces the interest paid and the duration of the loan. Some people today believe that a home mortgage can never be paid in less than 30 years. If that is your belief, I suspect it won't happen. I know a number of families that have a vision to be debt free and have trusted and experienced God's miraculous plan of economy in their life. Phil. 4:19 will work for us today, however, I must point out to you that when Paul penned the words of that great book, he was writing to a people surrendered, committed and giving sacrificially to support his ministry.

This article in no way is an exhaustive study of all financial deceptions because there are so many, but let me close by saying debt is generally not the real issue with which the follower of Christ must deal, the main issue is freedom. Financial freedom, our heart's attitude toward ownership, not only gives us freedom from bondage but freedom to obey the voice of God that indwells us. There is enough financial disobedience, even among Christians, that it keeps them on a financial level below where they could potentially live if they would simply be obedient to God's Word. Truth brings freedom; the voice of the stranger brings bondage. Which will it be?


Jack Wilkerson is vice president for business and finance at the SBC's Executive Committee.

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January 1996 Edition
Volume 4, Issue 4
January 1996