Dealing with Debt: How Church Members Can Become Better Stewards

By Ron Kelley

As pastors, we are well aware that many of our members struggle with issues concerning debt. A century ago, debt was regarded as an earned privilege for a few.  But today, debt is viewed as a right for all and borrowing is an integral part of our lives.  There has been a generational shift in our country.  The World War II generation was savers, but later transitioned into a generation of consumers, or spenders, and today, we are a generation of debtors as we spend beyond our income through the use of easy, yet harmful, debt (e.g., credit cards).

Scripture does not say debt is sinful, but sinful behaviors in most cases can lead to or create debt behaviors such as envy, pride, greed, gluttony or lust.  Make no mistake about it, God has nothing good to say about debt.  The psalmist says in Psalm 37:21:  “The wicked borrow and do not repay.”  Solomon wrote in Proverbs 22:7:  “The rich rule over the poor, and the borrower is servant to the lender.”  Second, 2 Kings 4:1–7 tells the story of the widow and the oil where, because of the widow’s deceased husband’s debts, she faced losing her children to the debt collector.  Fortunately, there is a positive outcome to this story, as the widow’s obedient faith and willingness to follow godly counsel led to an incredible blessing from God.

Debt extracts a physical toll.  It increases stress, which contributes to mental, physical and emotional fatigue.  It harms relationships and is the number one reason for divorce in the U.S.  Many people raise their standard of living through debt, only to discover that the burden of debt controls their lifestyles.  Debt also places the believer in financial bondage, and gets in the way of our fulfilling the calling on our lives to be abundant and cheerful givers.  Accumulating debt also creates a blurred line between wants and needs.  Lastly, for those who have children, the question we should ask ourselves is “What lessons are we teaching our children by living in the bondage of financial debt?”

1. Track Expenses / Establish a Family Spending Plan

You should know exactly where your money is going, right down to the penny.  A written budget helps you plan ahead and analyze spending.  Having a budget will help you cut back on “impulse buying.”  Every family / individual should have a spending plan.

(To learn how to develop your family spending plan, go to prestonwoodfoundation.org/freedom.)

2. List Your Assets

You should list every possession you own, including:  your home (equity), car, and furniture.  You should evaluate the completed list to determine whether you should sell any assets, including downgrading your car or house, and selling your coin, gun and baseball card collections, etc.  The correct attitude should be, not to think about what you are losing; think about how much you will gain by being out of debt.

3. List Your Liabilities

Most people do not know exactly how much they owe.  A person should list each debt with the interest rate and minimum payment.  One should also understand the need to prioritize which debts to pay back first.

4. “Rollover Your Debt” Technique Example

You should throw every single dime you can find at debt #1.  Even if this process takes years, think of how much better off you will be in time.  Once the debt is paid off, for most this will be the single largest disposal income increase you will ever experience.  This is a great time to start building up short-term and long-term savings.  Better yet, if you have not been able to biblically give to God what is rightfully His (the tithe) due to the bondage of debt, start now and enjoy the gift of giving.  Make sure to visit crown.org and access its useful tool to Rollover Your Debt.  This will be discussed in greater detail in the Three Action Steps to Eliminate Your Debt section.

Pay off a small debt first —it will encourage you!  Next, pay off debts with higher interest rates.  Once you have paid off an account, add the monthly amount from it to another debt payment.  Also, you should constantly be striving to lower your interest rates; the lower the rate, the less money you will have to pay back over time.   Here are some helpful tips when attempting to lower your interest rates:

1. Contact each card’s customer service number.
2. Understand that most cards have inflated interest rates because of missed/late payments.  Be ready to state that you know this to be the case and share how you have been on time for “x” number of months.
3. Don’t take it personally if they reject this request — keep calling!  Also, do not hesitate to ask to speak to a supervisor.
4. Always remain calm, friendly and professional, even if the customer service rep is harsh in dealing with you.

5. Consider Generating Additional Income

Additional income should be applied to debt elimination.  But beware of protecting your relationship with your family and Lord.  You can be creative, use your special talents, and do something you enjoy.

Have a garage sale.  Most American homes are cluttered with material possessions that are never used or simply no longer needed.  You’ll be amazed how much stuff you can sell to generate funds that will solely go toward paying down your debt.

6. Accumulate No New Debt

If you can’t pay for it with cash, check or debit card, then you have to go without.  If you are dealing with harmful credit card debt, it is highly recommended that you cancel your cards except for one card you can keep for emergencies.  Be warned that when you cancel a credit card, your credit score may decrease for a short period of time.  As crazy as it sounds, the credit bureaus view it negatively when your capacity to use credit is reduced; but be assured, the best thing you can do is to stop using and depending on  credit cards when making your daily purchases.

In principle, debt consolidation is a good step, given that you are working with an honorable firm, and you are committed to using only cash for ALL future purchases.  Some recommended nonprofit debt consolidation services include:

– Consumer Credit Counseling Services      800-856-0257 / cccs.net
– Christian Credit Counselors          877-474-5291/ christiancreditcounselors.org

7. Be Content with What You Have

Contentment is mentioned seven times in the New Testament, and six of those passages refer to money and possessions.  The apostle Paul wrote in Philippians 4:11–13, “I have learned to be content in whatever circumstances.  I know what it is to be in need, and I know what it is to have plenty.  I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.  I can do everything through him who gives me strength.”  Paul learned the secret of contentment because his circumstances and accumulation of material possessions did not determine his mindset.  Rather, Paul knew that true contentment was found in knowing and serving Christ, and that the Lord would provide for his needs.  Society today dictates that we cannot be content unless we drive a certain car, live in a certain house, or have a certain job title.  Be assured; having more will never be enough, as we will soon become dissatisfied and want the next better material possession that’s out there.

8. Consider a Radical Change in Your Life

You should lower your expenses significantly to get out of debt more quickly.  Ideas include selling your home and buying a smaller one, or renting; you can also cut out all non-essentials, including cable, internet, eating out and entertainment.  Bare-bones living with no extras for a period of time will allow you to achieve your goal of debt-free living!  Short-term sacrifices can turn into long-term gains if we are diligent in watching every penny we spend.

9. And Lastly… Don’t Give Up –Get Angry with Your Debt!

There will be 100 reasons for you to delay or quit your efforts.  You should get angry at your debt.  How many dreams have been put on hold by your debt?  How many sleepless nights have you stayed awake worrying over that debt?  Use your anger to get fired up about a plan to pay off your credit card debt, once and for all!  Also, don’t yield to temptation.  Jesus brings freedom in all areas of our lives.

Ron Kelley serves as the Director of Prestonwood Foundation at Prestonwood Baptist Church in Plano, TX. Feel free to ask him financial planning questions at rkelley@prestonwood.org.