While the Bible discourages people from going into debt and says that you are actually a slave to the lender, the Bible never overtly refers to debt as a sin.
However, the Bible does refer to the heart issues that often lead us into debt - like gluttony, envy, pride, and comparison- as sin. So the better question for us to ask is not "Is debt a sin", but instead is "why am I going into debt?"
Are you going into debt to try and make money fast? Are you trying to buy something you can't afford that isn't really a necessity? Are you leveraging out your family's future and happiness?
Those are the bigger questions I would start by asking yourself.
A. I am all for it! Some might argue that it doesn't make financial sense, but I have seen generous giving while being in debt become a secret key that unlocks an even greater place of provision in a person’s life. Remember that this isn't just a financial journey, but it is also a faith journey. Sometimes God will invite us to give generously while we are getting out of debt, but He also has a great plan for provision on the backside of it.
The key is that this should all be done in the context of community and wise counsel.
But instead of just cutting giving first, why not start by cutting other expenses like cable, eating out, cell phone, landline, faster than needed internet, etc.
A. I hear this one often when I tell people that car payment are a big drag on their finances. The normal argument is that you are paying the same amount in keeping your junker going than you would be in car payments for a new car.
A. When it comes to purchasing non-essential items like furniture, appliances, etc. where the item would be over $500, where does that fit into the debt snowball process?
A. When getting out of debt you want to start by putting aside a small baby fund for emergencies of $500 to $1,000.
Then you want to work your budget and continue to save for annual expenses. This way you don't go into debt for emergencies or events that you knew would be coming up.
But then your focus becomes getting out of debt. By paying off debts with interest rates of 5% and higher, you are actually saving hundreds of dollars each year.
Today, people own cars that are worth more than they make each year. That is just ridiculous. Honestly, I'm more of a simple man myself and just like my dad, I just want a car that will get me from point A to point B.
But not everyone is like me. I would say for the majority of people you should never spend more than $10,000 to $15,000 on the purchase of a car. You can buy a fantastic used car in this range and below.
I like the rule that you should never spend more than 10-20% of your gross annual income on the purchase of a car. So if you earn $50,000 before taxes, then you should not spend more than $5,000 - $10,000 on a car.
It might make you “feel” important, but throwing that much of your money towards a depreciating asset is not smart.
This goes against everything that you will see being driven on the road, but if you don't want to have a car payment for the rest of your life, then you need to learn how to DRIVE within your means.
Buying a home can be a great investment, but all too often people buy a home too quickly and don't count all the costs. So below we've listed some tough questions to ask yourself before you buy a home.
A. This is the one area of debt that we think it IS okay to consolidate your student loans. Mostly because you will be working with large amounts of debt and the interest rates are going to be in the same range.
A. With the cost of college at an all time high, how in the world are you supposed to get through college debt free? It seems impossible right? Well, not so fast my friend. Everyday I hear of another person who sacrificed and worked hard to make it all the way through college debt free. How did they do it? Here are a few different ways to get through college debt free.
Many times people start the home-buying process by asking the questions, "How much house can I afford?" This is usually the wrong question. The better question should be, "Am I at a healthy place financially to do this?" Here are 4 questions to help you answer that major one.
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