Jul. 6, 2005 - The Lender's Slave

The Bible does not absolutely state that borrowing money is a sin, just that it isn't the wisest choice we can make.

"The rich rules over the poor, and the borrower becomes the lender's slave." Proverbs 22:7

I was reminded of this verse yesterday when I received a call from a young woman -- Christian, married, 3 wonderful children.

She described a situation that is all too common.  On the outside this family is living the "good life" with a large house in an upper-class neighborhood, driving new cars, and surrounded by every imaginable creature comfort.  They attend a solid Bible church, have two incomes, and the kids attend good schools.  Life couldn't be better.

They are living in fear and misery.

This couple's total debt payments account for 86% of their net take-home pay!  By their estimates, they need a 20% increase in take-home pay just to make ends meet at the bare minimum.  ("Hey boss, I need a raise."  Good luck!) 

They have already negotiated favorable payment arrangements with the mortgage company to avoid foreclosure and with multiple credit card companies to reduce the ever-growing balance due.  A home equity loan was taken out to consolidate some high-interest bills and money borrowed from one retirement plan.  They owe a lot of money to a lot of people.

In short, they are slaves to many lenders and have no room left to maneuver.

It is not easy to live in the present while paying for the past.  Never mind preparing for the future (retirement, education, etc.).

Sadly, this couple is at the point where very aggressive measures are necessary to salvage their finances and credit scores -- asset sales, drastic lifestyle changes, and severe spending cutbacks.  Even then it will take a long time.  The situation is not hopeless but it is very difficult.  They are quickly running out of time and options.

They are at war!  It's more than money at stake.  Marriages and families often fail and break apart under the weight of economic hardship.

This situation highlights a few points we should all consider:

1.  Borrowing money hapazardly to live beyond our means is the surest way to the poor house.  We borrow to "have it all" but end up with nothing.

2.  Waiting to plan our finances or take action when we get in trouble is the worst thing we can do.  The best time to plan and act is when things are going well.  That's how we avoid trouble.

3.  Character is the key to financial success.  Imagine what a little dose of self-control, discipline, or frugality might have wrought in this situation.

4.  Maybe God knows what He's talking about when it comes to borrowing.  We tend to think we know better or that we can "handle" a situation.  Only later do we realize our error and His wisdom.

Sorry to share such a depressing story.  I wish I didn't get such phone calls.  It is the least pleasant part of my job to work with stressed out families and be the one to administer the financial medicine.  Yet it is also the most rewarding thing to see such situations turn around -- when the family is willing to follow the Lord's financial principles.

Jul. 12, 2005 - Good stuff!

Jul. 24, 2005 - Borrowers are slaves

Aug. 2, 2005 - Encouragement & Insight

Nov. 15, 2006 - Not the lenders slave

Nov. 15, 2006 - Reply to Spidey