Summary: Excessive personal debt is taking a huge toll. The Bible neither expressly forbids nor condones the borrowing of money. Instead it teaches that it is usually not a good idea to go into debt. Debt takes away our freedom and makes us a slave to our debt
As the calendar turned to the New Year, the talk of the country was the “Fiscal Cliff.” That started the conversation about our country’s national debt. As of this week, our national debt as a country is $16,822,348,570,124.50. The country’s annual budget deficits have exceeded 3 trillion dollars the last few years. But the debt that most people aren’t talking about is the average American household debt. Last week, we talked about American’s attitude of entitlement. Nowhere does that attitude do more damage than in one’s finances. An attitude of entitlement leads us to believe we’re deserving of whatever we don’t have or what others have. So we go out and spend money we don’t have, putting it on credit cards and worrying about paying for it later. This is the phenomena of “Keeping up with the Jones” and it’s widespread. CNN Money writes, “The rich are getting richer, and everyone else is going deeper into debt trying to keep up.” The average American family is in debt. They have an average credit card debt of $15,950. But our debt doesn’t stop there. The average student loan debt is approximately $23,000. The average household mortgage debt is $149,782 and many of those households owe more than their home is currently valued. Today, the average American owes approximately $47,000 while the average American salary was $41,673.83.
Excessive personal debt is taking a huge toll. First it causes emotional and physical problems. Debt causes stress and depression leading to lost sleep, lost hair and health issues including ulcers and stomach problems as well obesity. Second, it affects our work causing more missed days of work and diminished performance over time. Third it is the #1 cause of divorce. Excessive debt leads to feelings of anger, blame and arguments that divide and harm marriages beyond repair. Fourth it causes bad credit which can impact your ability to purchase a home or a car. Fifth is eviction from a current residence or even foreclosure. Sixth is wage garnishment or even bankruptcy.
That’s the bad news. The Good News is that the overall average debt of Americans is down $524 billion nearly 40% since the recession started in 2008 and for the first time in decades Americans are actually saving money rather than spending more than they earn. And while owing less is a good thing, the study shows that we're burning through our savings to pay our debts down. The overall net worth of the average American is down nearly 40% from 2007 to 2010, though a large part of that is due to the housing market.
The debt and credit system has always been with us. It was an active and important economic component of the Israelite community. There are, however, crucial differences between our debt system and theirs. In ancient Israel, debt was a function of survival and a ministry to the poor. Those without any other survival options were forced to borrow. As a result, the lending systems was established as liberally as possible. You would not charge interest (Ex. 22:25), you would not remove items necessary for one’s livelihood to pay their debt (Deut. 24:10-14), and you would forgive all debts every seven years (Deut. 15:1).
The biggest biblical concern with debt revolves around two issues: servitude and obligation to debt creditors. The Bibles speaks about a nation’s debt. The Lord was promising to make Israel a powerful nation and spoke in terms of borrowing and lending to represent the strength and weakness that is inherent in lending and borrowing. Deuteronomy 15:6 says, “For the LORD your God will bless you as He has promised you, and you will lend to many nations, but you will not borrow; and you will rule over many nations, but they will not rule over you.” When a nation is indebted to someone, they can exert influence over you. Our nation’s leaders should listen to Biblical commands about debt and stop spending money we don’t have. Our enormous debt as a nation is going to be a burden passed on to future generations.
The Old Testament also speaks about individual debt: “Just as the rich rule the poor, so the borrower is servant to the lender.” Proverbs 22:7 When you’re in debt, you’re a slave to the lender. You might not realize it, but they control a good deal of what you do – what you buy, where you go and even how or where you live. God does not want us in bondage to anyone or anything. Instead, he wants the freedom that Christ provides us spiritually to be experienced in every other area of our lives. 1 Corinthians 7:23 says, “God purchased you at a high price. Don’t be enslaved by the world.” Debt ties us down and dictates our future. Each debt we assume offers us less personal choice for the future. Eventually, our false hope for the future will be sold away because of our discontentment with the present and the spending it causes.