The Debt Trap and the Practice of Generosity

We are living in a time of easy credit and impulse buying.  Hundreds of times a day, advertisers bombard us with ads to create in us a desire for things we don’t need.  The ads come to us in newspapers, magazines, in our mailboxes, on billboards, on smartphones when we are in stores, in airports and train stations, by email, over the radio, on television, over the internet and now, even on computer screens at gas pumps.  Banks offer us “low-interest” credit cards, credit cards to consolidate our debt into easy payments, credit limit increases, home equity loans, reverse mortgages, two years same as cash financing and many other options to allow us to buy now and pay later.  Almost always this means we end up paying more than necessary and get pulled into the debt trap.

The average American household owes $185,591 in mortgage debt, $27,630 in automobile loan debt and $47,634 in student loan debt.  The typical household spends $3000 a year dining out. Eating out generally costs between two and five times more than eating at home.  Ordering food to be delivered to your home is almost as expensive as going out to a restaurant.  

In general, about 80% of Americans are living in debt.  There are different kinds of debt, of course, and some kinds of debt make more sense than other kinds.  For example, if you borrow money to buy a house and regularly make the mortgage payment on time, that might be a wise investment of your money in the long term.  But if you rack up a large amount of credit card debt, you will be throwing your money away by paying large fees in interest.

The ordinary American family holds about $9,000 in credit card debt. If a family has a credit card balance of $9000 for a year and can only manage to make a small payment to keep from building more debt, they will likely pay $1350 in interest alone.  That is based on a credit card interest rate of 15%, which is the average rate for credit cards in 2019. Can you think of what you would do if you had an extra $1350? I can.  

The Bible gives us serious warnings against falling into the trap of debt.

“If you’ve gone into hock with your neighbor or locked yourself into a deal with a stranger, if you’ve impulsively promised the shirt off your back and now find yourself shivering out in the cold, Friend, don’t waste a minute, get yourself out of that mess. You’re in that man’s clutches!  Go, put on a long face; act desperate. Don’t procrastinate – there’s no time to lose. Run like a deer from the hunter, fly like a bird from the trapper!” Proverbs 6:1-5

“Don’t gamble on the pot of gold at the end of the rainbow, hocking your house against a lucky chance. The time will come when you have to pay up; you’ll be left with nothing but the shirt on your back.”  Proverbs 22:26-27

Most Americans develop a budget and seek to live by it.  But recent trends show fewer people doing this. Why would people stop planning a budget and seeking to live by it?  There are many reasons. They may feel it’s useless, because they can’t predict income and expenses. They may be too busy.  I will give a personal answer to this. For many years, I have created a budget for my family. But sometimes, I fail to live by that budget.  It’s gratifying to buy the things I want, when I want them. To have access to the internet and the use of a credit card makes buying very easy.  The delight of buying what I want, when I want it can easily morph into addictive buying. From time to time, I slip into this kind of buying. When the high credit card bills arrive in the mail, I sink in a deep pit of remorsefulness.  

On average, Americans give between 3 and 5 % of their income toward charitable work such as churches or Christian mission.  That’s not very much for people living in the wealthiest nation on earth. One interesting fact that has been documented for many years is that poor people, in general, are far more generous in giving, than wealthy people.  If you are cynical, you will say that poor people remain poor, because they are too generous with their money. I don’t believe that.  

Not all poor people are generous and not all wealthy people are stingy.  What makes sense to me, no matter what our situation, is that we should work to minimize our debt, so that we can become more generous without fearing that we will be in need.   

Economic systems, attitudes and habits about how to manage money differ in each culture of the world.  But in most cultures, perhaps in all cultures, it is easy to fall into debt and hard to get out of debt once you get in. Debt is a trap like a lobster pot. The way in is painless and appealing.  The way out is hard to find and difficult to navigate.  

Here is the simple truth:  Debt cripples our capacity to be generous.  It is hard to be generous when you owe money to companies charge you more and more interest if you don’t pay them on time.  In the long run, you cannot give away what you do not have. In order to be generous, families who are in debt need to get out of debt.  Families who are not in debt need to work hard to stay out of debt. One of the worst places to live is just beyond your means.

This is not the place for me to give detailed counsel on money management.  Today there are some excellent Christian ministries that can help you learn to manage your money well, get out of debt and glorify God by living gratefully and generously.  Dave Ramsey’s Financial Peace University is one such ministry. Crown Ministries is another. You can enroll in a class that will be taught at a church or you can take a class online.  Many people have taken giant steps toward financial freedom and generosity by participating in these courses.  

The apostle Paul wrote “Don’t run up debts, except for the huge debt of love you owe each other.”  Romans 13:8 

I want to encourage you, if you aren’t already doing so, to create a budget based on thoughtful, faithful and biblical principles of stewardship so that you can live within your means and practice generosity.  If you don’t know how to do that, find a friend who knows how, and ask that friend to help you make a budget you can live by. If you don’t have any friends who can help you, look into enrolling in a course at a church such as one of those I mentioned above.  Work towards getting out of debt and staying out of debt. You will breathe more freely and take pleasure in sharing what you have for the work of God’s kingdom.  

Donald Marsden

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