The Bible states that a borrower is a servant to the lender in Proverbs 22:7. In Romans 13:8, it says that we should owe no man anything, except love. The first lesson from the Bible is that we should not be so indebted to man that we cannot serve God. So there is a warning against believers going into debt, but we have to consider what is good debt and bad debt. Good debt increases your financial worth and bad debt decreases your financial worth.

A good debt is an investment that creates value, like a mortgage that helps you buy a home that increases in value over time, or a student loan, that helps you get valuable qualifications to increase your earnings potential. On the other hand, if a student took out a loan to get a qualification that employers do not recognise and consider ‘worthless,’ that loan would not be a good debt.

A bad debt is an expenditure that loses value; like a brand-new car that loses thousands as soon as you drive it off the forecourt and costs you lots of money in unnecessary interest repayments. It is possible to borrow $25,000 and use it to buy a new car, go on a holiday, buy new clothes etc, but when you look at the repayments - you end up paying back a total of over $40,000! Read the small print!

If we managed to save and pay upfront for the smaller things instead of going into bad debt, we would save money, which could be invested into God’s work. Remember we shall give an account to God and do we want Him to tell us that we wasted countless thousands on bad debt, throw-away products and poor money management?

Most believers have to go into some debt at some time, but let’s make sure that when we borrow, we do so because it is a wise investment, otherwise, we might as well throw our money down the drain! Why work two full years of our lives paying off the interest from a normal loan that we could have saved up for?

Learn more about debt here.