Bill’s TV isn’t the best so he decides to go buy a new one. Since Bill doesn’t have the money saved up, he decides to buy the $800 TV on his credit card. His credit card charges 15% interest (which is average). He can only pay $50 a month towards the TV purchase. How much extra does he pay for that TV? This is a great math question that I made up and gave to my students, but it gives a good example of what credit cards and debt do to our finances. The answer is about $100 extra. Are you willing to pay $100 extra for a TV, because you want it right now or are you willing to save up to purchase it with cash?
Proverbs 22:7b says “the borrower is slave to the lender.” What a statement! When you borrow money (have debt) to make purchases, it burdens you down, your money doesn’t go as far, and you feel that stress associated with debt. We have to focus on getting out of debt to unburden ourselves from that slavery talked about in Proverbs 22:7. How do we do it? Dave Ramsey calls it the “Debt Snowball.” List all your debts smallest to largest; anything from student loans, medical bills, car payments, to credit cards. And focus on paying off the smallest debt first. Once that is paid off, take what you were paying on that bill and apply it to your next until that is paid off, then go on to the next until we have all debts paid. Just think of the extra money in the budget we would have if those debts were out of our life and the freedom that would bring.
Pastor Bryan Christenson