Many American households are drowning in debt and see no way out of the pit that continues to grow deeper by the month. The problem is so profound that 75 percent of Americans are a mere three paychecks away from bankruptcy.
ALEXANDRIA – Many American households are drowning in debt and see no
way out of the pit that continues to grow deeper by the month. The
problem is so profound that 75 percent of Americans are a mere three
paychecks away from bankruptcy.
In 2003, American households racked up $412 billion in credit card
charges, up 185 percent from the previous five years, according to
Standard & Poor’s. The average balance on open credit cards in
December 2005 was $4,616.90. If a household has more than one credit
card, the average amount of consumer debt is in excess of $8,000.
An ever-mounting consumer debt can wreck one’s judgment, job
performance and relationships. There are people, even Christians, who
are so far behind they sense the enemy has cast them into a demonic
bondage and there is no hope except for bankruptcy, a lottery win, a
consolidation loan or cashing out the equity of a home. All of those
scenarios carry problems within themselves and tend to exacerbate the
debt rather than bring about genuine, life-long solutions.
For most Christian households wrestling with consumer debt, lasting
solutions are very possible. Follow these basic principles to exorcise
the red ink:
1. Start with the right mindset. The Bible is very clear about a
believer’s money and possessions. Part of discovering the splendor of
God’s grace is finding that “I surrender all” means I surrender all of
me and what I call mine to the Lordship of Christ. Transference of the
ownership of stuff and resources has a way of revolutionizing a
person’s mindset. Instead of living with an allegiance to the cultural
god of the almighty dollar, life’s meaning is found in bringing
pleasure to the Lord Jesus with work, relationships, purchases and
2. Find out what is causing the debt. Most people who are drowning in
debt do not have a clear picture of what is trashing their personal
finances. All they know is their outgo is exceeding their income. To
get a handle on what is actually happening; make an inventory of
expenditures for the last 90 days. Was it purchased with debt? When
debt is used, future income is obligated. Consequently, there is less
money for today’s purchases.
3. How much debt is there? Too often people who struggle with debt do
not know how much they owe. Make a list of the balances and the
interest rates for each. Rearrange them so that the smallest debt is on
the top of the list. Ask the Lord for strength to do everything you can
to dissolve the debts, starting with the smallest debt.
4. Get a plan and work the plan. There are four specific things Christians can do to dissolve debt:
–Tithe. From a biblical perspective, the child of God begins with
giving instead of receiving. Tithing to your local church is an act of
faith and must be a non-negotiable. Whatever the income is from all
sources and before taxes, tithe it to the local church. Obedience is
the pathway to finding biblical solutions for life’s challenges.
–Cut spending. This is perhaps the most painful part because it means
we must deny ourselves and curb our natural proclivity toward
gratification. But, if we are serious about conquering debt, it must be
done. Christian financial advisors suggest the following: shred the
credit cards, pay cash, avoid impulse purchases, mow your own lawn,
discontinue memberships or subscriptions, cook at home and bring your
lunch to work, avoid unnecessary travel, buy groceries right after you
have eaten and not before, shop for your auto insurance with different
carriers, and car pool.
–Increase your income. Finding ways to increase your income will do
more to speed up the process of debt reduction than anything else. Is
there a temporary second job you could do? If you take a second job,
make sure it is true income. If a job is costing you money, it is not
making you any money. Is there something you currently own that can be
liquidated and applied to the debt? Can you cash out of your current
vehicle and buy a less expensive one?
–Create a spending plan. Put the plan on paper. What must you spend on
essentials including tithing, groceries and debt reduction amounts?
Place everything in priority order with the most important items at the
top of the page. To harness the debt, you may have to forgo the lower
5. Record the progress. Simple, accurate records will help you see the
progress you are making with spending, income and debt reduction.
6. Pray without ceasing. Make it a matter of sincere prayer for you and
your family. Debt is usually what we do to ourselves with the choices
we make. Remember that God loves to demonstrate His grace through the
lives of repentant sinners.
Statisticians often find no major difference in the personal finances
of American Christians and the general population. However, the failure
of American Christians to trust God with prudent financial decisions
does not mean that Christians don’t have an available solution.
Obedience to God in the area of biblical financial stewardship can tame
the demon of consumer debt and set the Christian free to be a conduit
of kingdom resources for the glory of God.