Wisdom in Borrowing

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The Big Question
Am I losing sleep because of what I owe? How am I doing when it comes to reducing what I owe, or at least keeping it steady?

BIBLE VERSES

Proverbs 22:7
The rich rule over the poor, and the borrower is
slave to the lender.


Romans 13:8
Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.


James 4:13
Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.”

REFLECTION QUESTIONS

  • Is there an area where I’ve lacked wisdom in how I have borrowed?
  • Are my spouse/partner and I resolving our debt problems together, regardless of who borrowed the money in the first place? Are we making decisions together regarding future debt?
  • Am I borrowing money to buy things I don’t really need, or to impress others?
  • How has my debt impacted on my and my family’s level of freedom (from stress, avoiding phone calls, getting blacklisted)?

FINANCIAL HEALTH TIPS

  • Good debt is where we borrow money for
    essential things of lasting value.
  • Bad debt is where we incur debt for
    something we don’t really need, and is for
    something we use up in a short space of
    time.
  • Building and maintaining a positive credit
    record is very important.


Tips you can follow to build a healthy credit profile:

  • Make sure you understand the terms of the loan/credit, and read your credit agreement carefully.
  • Choose your credit providers carefully, and ensure that they are registered with an NCR certificate. Try to avoid ever handing over your ID card or bank card to a lender.
  • Never use credit for cash, for example, drawing money at an ATM from your credit card.
  • Don’t have too many of one type of credit, for example store cards.
  • Pay your bills and instalments on time. Set up automatic payments via debit order wherever possible.
  • Whenever possible, don’t pay only the minimum instalment. If you have extra money, use it to pay off some old balances.
  • If the interest rate goes down, try to keep your payments the same. You’ll end up paying off your debt faster.
  • If you have If you have missed payments, try to make some regular payments, even if they are small, to show you are making an effort.
  • Do not use one credit product to pay for another credit product.
  • Never ignore overdue accounts. If you have any problems repaying, contact your credit providers to make a repayment arrangement.

Moving Forward
What one or two commitments can I make that will help me to reduce my current debt over the next six months, and how can I avoid taking on any new debt during this period?

Script: Brian Helsby, Derek Muller, Jennifer Charlton
Presenter: Jennifer Charlton Animation voice-over: Mzamo Moloi
Creative and Production: Indie Village
Producer: Jennifer Charlton

Money Values Church Course

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