Debt is a legally building agreement that, in the future, will require you to pay for what you’re using today. That is negative living — and it can strangle your life. Debt can hold you back from many great things in life.
It is unwise to enter debt unless the financial return for doing so will be greater than its cost. For example, a loan for education beyond high school or to start a business often meet this criteria — while loans to purchase clothing and furniture do not. Even a house is not guaranteed to appreciate, and it’s purchase should be entered into very carefully.
Before taking on debt, consider these dos and don’ts:
Do consider the level of financial and emotional stress the debt will cause.
Do consider whether you and your spouse agree to take on this debt.
Do consider how this debt will have an impact on your ability to achieve other goals you have set.
Do consider whether this debt will prevent you from being able to embrace God’s plans for your life.
Don’t borrow to get what you need now. Work and trust God to provide what you need.
Don’t guarantee another person’s loan, which is the same as taking on the debt yourself.
Don’t borrow to get in on a get-rich scheme. Remember that assets are accumulated little by little.
Don’t rely on the future. Your salary may not increase. Your job may be cut. Plan for the future — but live in the present with the means you have.
We hope you’ll consult with your financial advisor for a plan to liquidate liabilities. We certainly invite you to contact us here at Lighthouse Financial, too.
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