Pat's Perspective -- Christians Should Aim For Debt-Free Living

Solid financial planning is key to a peaceful Christian life. With the potential threat of a future recession in the upcoming millennium, Pat urges Christians to reign in on expenses and opt for debt-free living whenever possible.

The Bible says that the debtor is the servant of the lender (see Proverbs 22:7). This has always been true. It is a great tragedy to have to borrow money to pay for current expenses, to live beyond your means and constantly try to make $100 do the work of $200.

I believe that those who do not live within their means and who borrow to meet day-to-day expenses wind up being the slaves of those who lend to them. They do not have peace, and very often their marriages are torn apart. Some marriage counselors and financial consultants assert that 80 percent of marriage failure is caused by money pressure and that money problems account for about 50 percent of the impotence in married men. Living beyond your means, which results in debt, can be devastating.

There are some types of debt that are not always damaging, however. For example, a business may need to borrow to purchase productive assets; the servicing of interest and principal payments make up a business expense that is included in the operating budget. Modest debt can allow a business to buy equipment, buildings, and land, and to expand in an appropriate fashion. The same justification applies to the debt-financed purchase of a house. Mortgage payments are not considered by some as debt but as a monthly budgeted expense. Of course, the happiest people in this regard are those who have no debt on anything, who have paid cash for their cars, their furniture, and their houses, and who have funded their businesses out of either equity or cashflow. These people are better off in times of recession or even in times of rampant inflation. Especially in today's world, when in the next ten, fifteen, or twenty years I believe we are going to be faced with increasing deflationary pressures, the paying of debt is going to be extremely difficult, because we will pay off debt with more and more expensive dollars. It will be a terrible situation. A time of deflation is a debtor's hell.

The present economic environment is the worst possible time to incur debt for anything. If at all possible, do not go into debt now.