Debt-Free Living: A Christian Perspective on Financial Freedom

Each year, one of the most common New Year’s resolutions is to get out of debt. That’s no surprise. Having debt is so widespread in our culture that it feels normal, unavoidable. While the Bible never labels debt a sin, it cautions that debt can become a form of bondage. “Just as the rich rule the poor, so the borrower is servant to the lender” (Proverbs 22:7). Scripture also points out that, given the sacrifice Jesus made for us, we would be wise not to take it for granted. “God paid a high price for you, so don’t be enslaved by the world” (1 Corinthians 7:23). The fact that debt can become a form of bondage points to the wisdom of taking a very cautious approach to borrowing.

If you have any debt other than a reasonable mortgage, freeing yourself from that debt will enable you to more easily pursue other financial goals. It will also bring emotional benefits, easing the stress that debt can cause. And it can bring spiritual benefits because having too many bills to pay can hinder your ability to discern and respond to God’s leadings.

How to get out of debt? Here are some practical steps:

• Go no further into debt: If you’re going to get out of debt, it’s important not to take on any more debt. Remove your credit cards from your wallet or purse. Cut them up if you have to. Make it as difficult as possible to go any further into debt.
• Tell someone about your debt: This may be the most uncomfortable step, and also the most beneficial. Tell a trusted friend how much debt you have and that you’re committed to getting and staying out of debt. It can be freeing to tell someone about your debt. Their prayers, encouragement, and accountability will be very helpful in keeping you on track toward your goal.
• Fix & roll your payments: If you have a credit card balance and make the required minimum monthly payments, those required payment amounts will decline a little bit each month. That’s not kindness on the part of the credit card issuer; it’s math. Your minimum payment is based on your balance. If your balance is declining a little bit each month, so will your required payment amount. Paying this declining minimum is a sure way to stay in debt for a very long time. Just fixing your payments on the amount required this month will greatly speed up the process of paying off the balance. So, take note of this month’s required payment amount. Then, next month, when your required payment amount declines, just keep paying the amount that was required this month. Once your first debt is paid off, take the full amount you were paying on it and roll that amount into your next lowest-balance debt.
• Accelerate your payments: If you can add some extra money to your fixed payment amount, that will further speed up the process of getting out of debt. Any amount will help, whether that’s $10 per month or $100.

How to stay out of debt

Once you’re out of debt, there are two steps that will help you stay out. First, use a budget. It is the single most powerful tool for managing money well. With a budget, you take your monthly income and proactively plan how to use it.

1. Ideally, the first portion will go to the Lord’s work, and the next portions will go to saving and investing. Then, with all that’s left over, allocate it first to essential expenses, such as housing, food, insurance, and utilities. Then make allocations to discretionary expenses like entertainment and vacations. Using a budget will help you live within your means.
2. The second step is to build and maintain an emergency fund. Just start where you can, whether that means putting $25 per month into savings, $50 per month, or $100 per month. First, aim to save enough to cover one month’s worth of essential living expenses. Then keep going until you have three to six months’ worth. It may take some time. The important thing is to add to your savings each month.

Depending on how much debt you have, paying it off may take some time. Keep your goal in mind, make use of an encouragement and accountability partner, and just keep going. The day that you free yourself from the bondage of debt will be a wonderful day.

Align your finances with your values. Enhance your devotion to biblical stewardship with a Christian banking institution. Join CCCU today!

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Matt Bell is the author of Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management. He speaks at churches and conferences throughout the country and writes the MattAboutMoney blog.

This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.

Frequently Asked Questions

Q: Is it okay to have debt?

A: Debt isn’t considered a sin, but it can become limiting and reduce financial freedom.

Q: How much debt is too much?

A: There’s no exact rule, but aim to avoid debt beyond a reasonable mortgage and pay off other debt quickly.

Q: What are some good first steps toward getting out of debt?

A: Stop taking on new debt and find someone you trust for accountability and support.

Q: What other steps should I take?

A: Keep payments consistent (even above the minimum) and add extra whenever possible to pay it down faster.

Q: Once I’m out of debt, how do I stay out of debt?

A: Stick to a budget and build an emergency fund to handle unexpected expenses.