Debt is an interesting thing in that it doesn’t always find its way into your financial situation through the overuse and abuse of credit cards. While that is a common occurrence, debt has a way to sneak into peoples’ lives sometimes in more subtle ways.
Many people tend to look for quick and easy solutions to get out of debt. People typically want debt to go away as quickly and subtly as it appeared. But as many of you know, getting into debt isn’t all that hard. Getting out of debt is much more difficult and takes some work.
Today I’m going to explore two common debt situations and some thoughts for overcoming them.
I need a reliable car. I’m going to apply for a five year loan so I can afford the payments.
Often people accumulate auto debt through the purchase of a new or even a used car. I think this is probably one of the quickest ways to get into debt. In fact, everyone knows you can end up with a sizeable loan simply by spending an afternoon at the dealership. Have you ever signed the papers and felt the anxiety set in as you completed the process? Then you wondered if it was really the right decision.
Needing a reliable car is a valid reason to start looking, but it may just not be a good enough reason to go into debt. Too often we are quick to solve the problem ourselves without turning to God to provide for our needs. Personally, I’ve been there and unfortunately it has extended the time required for our family to become debt free.
Consider this approach
Try to slow down the process. Are there other modes of transportation you can use until finding a reliable car? Could you take public transportation or even work from home? Perhaps you could borrow a car from a friend at church? The idea is to brainstorm every possible option that will keep you from having to make a quick decision and end up with a loan!
Most importantly, turn to God to provide to provide for your needs.
You can be sure that God will take care of everything you need, his generosity exceeding even yours in the glory that pours from Jesus (Philippians 4:19, The Message).
That’s a powerful scripture to remember. God will take care of everything! I love that God can take care of our situations and needs in ways exceeding our expectations and in unforseeable ways. Just remember it might not be in the exact way you have planned.
It’s a good money making opportunity. I’m going to borrow the money required to get started from my retirement account.
If you have entrepreneurial spirit, you know the feeling you get when a new opportunity is presented. Your mind begins working. Could this really be possible? I’d certainly like to look at this a little closer! Oh, it requires an initial investment? But the return on this investment seems highly likely and the rate of that return looks to be pretty quick.
Perhaps you’re not entrepreneurially inclined, but the thought of making some extra money after investing a little money may sometimes become quite enticing. In either situation, there is a danger in borrowing money to fund investments. More dangerous is borrowing from retirement accounts to fund investments.
Why is it so common to cross over into savings marked for other purposes and use the money for something else? Borrowing against retirement, is running up debt because it must be repaid. You’ll also end up paying a penalty or fee for the loan and it’s considered taxable income (see your tax advisor for more information).
What’s your motivation for the opportunity? Seek some Biblical guidance.
When such investment opportunities are presented, we must consider the reason we are engaged in opportunity and know that borrowing from money marked for retirement is never a good idea. Don’t let the idea of making money lead you to unwise decisions. Invest in such opportunities with money saved for doing so and avoid the pursuit of money as your primary focus.
For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. (1 Timothy 6:10).
How have you avoided these common debt situations? Are there other common debt situations you’ve done well to avoid? Let us know about them in the comments.
This is an article I originally published at ChristianPF.
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