“A Slave to the Lender”
Living Debt Free
“Just as the rich rule the poor, so the borrower is servant to the lender” (Proverbs 22:7, TLB).
THIS WEEK’S INTRODUCTION
Debt has become a way of life. Personal consumer debt in our country increases at the rate of $2,000
per second. We are drowning in a sea of debt; in 2005 the national savings rate fell below zero percent
for the first time since the Great Depression. And with all this credit floating around, more and more
people are declaring bankruptcy—more than two million individuals a year.
Why does it seem so much harder these days to make ends meet?
What is debt? The dictionary defines debt as: “Money which one person is obligated to pay to
another.” Debt includes money owed to credit card companies, bank loans, money borrowed from
relatives, and the home mortgage. Bills that come due, such as the monthly electric bill, are not
considered debt if they are paid on time.
Read the following vignette:
Mike was a real estate agent and his wife, Jill, was a nurse. Jill's mom and dad had taught her that
financial responsibility is important and necessary. She learned, by example, how to save up for things
she wanted rather than borrow the money. As a result, she tended to be cautious with money and
reluctant to go into debt.
Mike, however, fell into the trap of impulsive buying and often found himself compelled to buy things
he saw on infomercials and in internet ads. He loved nice clothes and all things “i” (iPhone, iPod, iPad)
and he often purchased them on credit, thinking he'd pay for them eventually.
Mike and Jill began arguing continually about their finances, but they never found any resolution to
their conflict. Eventually, they found themselves seriously in debt, behind on their house payments and
unable to pay many of their bills by the due date.
What attitudes did Mike display which caused this couple to go into debt?
What can Mike and Jill begin to do to repair their precarious situation?
SCRIPTURE’S PERSPECTIVE ON DEBT
1. Debt Is Discouraged.
“Owe no man any thing” (KJV). “Pay all your debts (TLB). “Owe nothing to anyone” (NAS). “Keep out of debt and
owe no man anything” (Romans 13:8, AMPLIFIED).
2. Debt Is Slavery.
“Just as the rich rule the poor, so the borrower is servant to the lender” (Proverbs 22:7)
3. Old Testament View of Debt.
One of the rewards for obedience was being out of debt.
“If you will diligently obey the Lord your God . . . all these blessings shall come upon you…and you shall lend to
many nations, but you shall not borrow” (Deuteronomy 28:1-2, 12).
Debt was one of the curses for disobedience.
“If you will not obey the Lord your God…all these curses shall come upon you.…The alien who is among you
shall rise above you higher and higher.… He shall lend to you, but you shall not lend to him . . .” (Deuteronomy
4. Scriptural Warning Against Presumption.
“Come now, you who say, ‘Today or tomorrow, we shall go to such and such a city, and spend a year there and
engage in business and make a profit. ’Yet you do not know what your life will be like tomorrow.…Instead, you
ought to say, ‘If the Lord wills, we shall live and also do this or that’” (James 4:13-15).
What biblical principles can be drawn from this passage?
Isaiah 55:8-9 reads, “For my thoughts are not your thoughts, neither are your ways my ways,” declares the
LORD. “As the heavens are higher than the earth, so are my ways higher than your ways and my thoughts than
How does this passage relate to borrowing money?
Have you seen God work in an unusual way in your finances? Explain.
5. Responsibility to Repay.
“Do not withhold good from those who deserve it, when it is in your power to act. Do not say to your neighbor,
‘Come back later; I’ll give it tomorrow’—when you have it with you” (Proverbs 3:27-28).
Do any of these verses say that borrowing money is a sin?
Note: Nowhere is borrowing called a sin. Romans 13:8, which says "owe nothing to anyone" or "let no debt
remain outstanding" (NIV) is frequently quoted as meaning that borrowing money is sinful. But the context in
the verse is human relationships in general, not specifically financial transactions. The debt that is mentioned
could include finances, but not necessarily. We should keep in mind that anytime someone enters a debt/debtor
relationship, the original relationship changes. Therefore, the principle of not owing money to others is a good
one, but it is not a commandment forbidding us to borrow money. Borrowing may be foolish, but it is not sinful in
Read Psalm 37:21. When is borrowing a sin?
Borrowing money is not a sin, but not repaying a debt is.
If you are able, share how a mistake you and, if applicable, your spouse made in misusing debt, affected
your life and, if applicable, your marriage.
WHEN CAN WE OWE MONEY?
In our opinion, it is permissible to borrow for: (1) home mortgage, (2) your vocation, or (3) your
business. The following three criteria must be met:
1. The item purchased produces an income or has the potential to appreciate.
2. The value of the item equals or exceeds the amount owed against it.
3. The debt is not so high that the repayment puts undue strain on the budget.
What are some of the reasons you give to yourself for borrowing money (whether from a lending
institution or with a credit card)?
Are any of those reasons legitimate? Why?
HOW TO GET OUT OF DEBT
1. Pray for strength and God’s help.
2. Start/keep giving regularly.
“Will a man rob God? Yet you rob me. But you ask, ‘How do we rob you?’ ‘In tithes and offerings. You are
under a curse—the whole nation of you—because you are robbing me. Bring the whole tithe into the
storehouse, that there may be food in my house. Test me in this,’ says the Lord Almighty, ‘and see if I will not
throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for
it’” (Malachi 3:8-10).
3. Accumulate no new debt. Stop borrowing!
4. Establish a written spending plan that allows a monthly surplus for debt repayment.
5. Set up an emergency account of at least $1,000.
6. List your assets - everything you own. Determine if you should sell any assets and use that money
toward debt reduction.
“Be sure you know the condition of your flocks, give careful attention to your herds” (Proverbs 27:23).
7. List your liabilities - everything you owe.
8. Establish a debt repayment schedule. Decide which debts to pay off first. Base your decision on two
factors: the size of the debts and the interest rate charged.
“The wicked borrow and do not repay, but the righteous give generously” (Psalm 37:21).
9. Consider earning additional income.
10. Consider a radical change in your lifestyle.
“Therefore, I urge you, brothers, in view of God’s mercy, to offer your bodies as living sacrifices, holy and
pleasing to God—this is your spiritual act of worship. Do not conform any longer to the pattern of this
world, but be transformed by the renewing of your mind. Then you will be able to test and approve what
God’s will is—his good, pleasing and perfect will” (Romans 12:1-2).
11. Do not give up!
Read 2 Kings 4:1-7. What principles of getting out of debt can you identify from this passage?
REDUCING COMMON NON-CONSUMER DEBT
1. Automobile Debt
Keep your car long enough to pay off the loan. Then, continue paying the monthly car payment into
your own savings account so you can buy your next car without a loan. Keep the car for 10 years or
twice as long as the loan.
2. Home Mortgage
If you have a home mortgage, consider pre-paying at least a little bit each month to shorten the length
and save interest:
Add 1/12 of your monthly mortgage payment each month or some other set amount.
Make one additional payment each year.
If the lender will allow it, pay bi-weekly or weekly.
3. Investment Debt
Borrow for investments only when the investment is the sole collateral for the debt.
4. Business Debt
Carefully consider the stability and competitive edge that accompany operating a business debt free.
A person who cosigns becomes legally responsible for the debt of another.
“It is poor judgment to cosign another’s note, to become responsible for his debts” (Proverbs 17:18, TLB).
Read Proverbs 22:26-27. What does this passage say about cosigning? How does this apply to you?
Read Proverbs 6:1-5. If someone has cosigned a loan, what should he or she attempt to do?
The Magic Of Compounding
Compounding has been called the eighth wonder of the world because it changes a dollar saved for the
future into multiples upon multiples of dollars. For example, if you were able to save $1,000 per year,
and if you earned 12.5 percent interest each year, at the end of forty years you wouldn't have just
$40,000. The actual amount available to you would be $1 million! This amount excludes the impact of
inflation and taxes, but the point remains that you don't have to save $1 million in order to have $1 million.
Charts 6.1 and 6.2 illustrate the results over time, at various interest rates, of investing either a lump
sum of $10,000 or a fixed amount of $1,000 per year. The three variables are the amount, the time
period, and the rate of interest. Obviously, the earlier you begin, the more you invest, and the higher
your interest, the greater the impact.
It's essential to understand the magic of compounding because the flip side of investing money is
borrowing it. If you borrow money at 12.5 percent, if you pay $1,000 per year in interest to the lender,
and if you do that for forty years, the lender, assuming he can reinvest the money at 12.5 percent, has
earned $1 million on your interest payments, even though you have paid him only $40.000 (plus the
principal). We call this phenomenon "the opportunity cost of consumption.” You can choose to be
either a borrower of money, giving someone else the opportunity to earn through the magic of
compounding, or a saver, or investor, of money, which is the same thing as being a lender. Then you
can see the magic of compounding working for you than against you.
One guaranteed good investment is to pay back all high-cost debt.
One guaranteed good investment is to pay back all high-cost debt, such as credit card debt that's
costing you 12 to 21 percent. That's the same thing as making an investment at 12 to 21 percent. For
example, if you have $3,000 in a savings account earning 5 percent and $3,000 of credit card debt
costing you 21 percent, the net differential is 16 percent against you. By taking the $3,000 out of your
savings account and paying off the 21 percent debt. you're doing the same thing as making a 16
percent investment. If in future months you then take the amount that would have been paid to retire
the credit card debt and invest it in your savings account, you'll really benefit from the magic of
Would you like an easy-to-read, step-by-step financial plan for achieving financial freedom? The
Crown Money Map™ is a fun, visual guide that shows you practical steps for becoming financially
stable. Purchase a copy or get the free electronic version at www.CrownMoneyMap.org