How to Avoid Debt

The Cambridge Advanced Learners Dictionary defines debt as something, especially money, that is owed to someone else, or the state of owing something. Although historically debt involved other commodities besides money, these days it is primarily money that is owed by people in our societies. In today’s world, debt does not remain stagnant but continues to accrue interest every month or year. Having a lot of debt is an uncomfortable position to be in; it can lead to psychological and emotional breakdowns. Although the Bible does not expressly forbid or condone borrowing, the wisdom of the Word of God teaches that it is usually not a good idea to be indebted. Debt can occur through several means. This article tries to help believers on how to avoid debt.

How believers get indebted

It could be a result of poor spending habits or mismanagement of resources.

With banks making credit readily available, many people are now spending beyond their means. They excuse their behavior by saying they will have no trouble paying for things later. Unfortunately, they are not always able to pay back on time, making their total debt accrue over time. (Luke 15:11-13)

Lack of employment or underemployment can be another reason debt adds up.

Many people in our world today are not able to get the jobs they are really looking for because of the competitive nature of the labor market. Man must still survive, so they go on borrowing for food, rent, and so on. In this situation, debt can pile up and become difficult to pay over time.

Failed business.

To run a business, we sometimes have to borrow from the bank to keep people on the payroll. Many businesses start with help from banks and other investors; while this is common, it can lead to debt if the business doesn’t survive.

Reduction in income.

When you are earning hundreds of thousands of dollars per year, your spending habits somehow increase to match your income. You choose better cars and houses, and even better restaurants to go to with your friends and family. But if you lose your job or get demoted, it is sometimes difficult to change your spending habits, and this can lead to debt as well.

Medical challenges.

Many critical medical conditions require a lot of medications and doctor visits. Along with the growing complexity and sophistication of our medical systems and institutions, new or more complicated diseases or sickness are appearing. We have several medical conditions today that were unheard of in the past, and these conditions can lead to frequent doctor visits and the tendency to go into debt.

Divorce.

With the rise in divorce and marriage breakdown in our societies today, many persons end up going into debt in order to settle with their lawyers. It is not cheap to have a lawyer settle disputes in marriage breakups. These lawyers get paid whether or not your finances match up.

Addiction to gambling.

Gambling can be a very dangerous addiction because it starts slowly and becomes a deep problem before you know it. All you will think about initially are the thrills and excitement you derive from gambling, but in time you get addicted and cannot do without it. Many borrow money “just to make one bet,” thinking they will win, but eventually, they begin to lose and run into debt.

How can we avoid debt, then, after learning about the things above that lead to debt?

Learn to honor God with your finances by giving your tithe or offerings.

Tithing cannot be overemphasized and is a very important practice for a Christian. It has to do with giving 10% of your income to your church. This teaches you the culture of giving and managing your finances. By giving your tithe, you are indirectly learning how to manage your money. How? You start thinking about how to effectively use the 90% that is left, so you learn to manage the less that is left pretty well.

Develop a saving culture.

This is where you save a little every month from the income you get from your job or family. I would like to encourage you to save at least 10% of your income and invest in something profitable. If you can’t afford to put aside 10%, then just start with any amount you can manage and keep on increasing this bit by bit. You will be amazed at how much you can save.

Prepare a budget based on your actual income and not what you can get from the bank.

Avoid using your credit cards on every purchase and try to make a budget for what you really need every month. Make time to sit down and write your expenses out. To avoid impulse buying and budget properly, write expenses down and don’t just leave them in your head. Avoid unnecessary buying too; buy things that you need and purchase luxury items only if you can really afford them.

Don’t be lazy by staying home and avoiding involvement.

Get out there and find something to do. When it comes to how to avoid debt, it doesn’t matter how small that occupation is—it will afford you a way to bring many more blessings into your life. God will always bless what you already have in your hand.

Seek financial advice and invest wisely.

If you don’t know what to do with your finances or if you are highly in debt, then please seek financial counseling from someone who is authorized to give it. Avoid taking the advice of your friends unless they are financial experts and authorized to give it.

Pray to God to help you with your spending.

Pray for wisdom. The wisdom of God will help you to save and invest well. He will get you out of debt and make you a blessing to your generation and the generations yet unborn.

We hope this article has helped you on how to avoid debt. You can share it to bless others as well.

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