The Dangers of Debt

By Dr. Ephraim John Udofia

Being in debt is a heavy burden that can affect our effectiveness, emotional well-being and even our health. Paying what we owe becomes critical in the face of economic hardship. The attitude of constantly borrowing money or things to augment our lives is a wrong approach in financial discipline and management. As we briefly examine the dangers of debt, we will also learn of developing a better approach in dealing with debt and its consequences.

The christian attitude towards debt should be governed by the word of God and not the opinions of our secular pundits who stand to benefit from our ignorance. Paying heed to divine instructions is always better than the price of disobedient. The scripture says, "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverb 22:7) KJV. You'll notice that this scripture does not exempt any person, group or organization. In a nutshell, whoever borrows, be it, individual, or organization, including churches, remains a servant to the lender, until the debt is paid off. I know the pain and anxiety of this first hand.

Debt isn't a sin, it's discouraged in the scripture but not prohibited. It's never the real problem, the underlying factors could be greed, self-indulgence, impatience, fear, poor self-esteem, lack of financial discipline, et cetera.
Debt is an obligation owed to people or institutions to which we agreed to pay back for whatever benefits that were received.

To fully understand the dangers of debt, it's proper to look at some types, here are Five kinds of debt:

* Credit card debt
* Consumer debt
* Mortgage debt
* Investment debt
* Business debt

I will suggest whatever your reason may be, before you sign unto any of these, ask the following questions, 1) Does this make any economic sense to enter into this debt?, 2) Do I have peace of mind about this debt? (be careful how you handle this particular one) and, 3) What goals or values am I meeting with this debt that cannot be met any other way? These types of questions could safeguard you from serious dangers of debt.

For the space that we have in this article, let me address some dangers of debt.

Economic dangers of debt:

1) Interest Compounding
This is a bad debt news. On the creditors side it's a welcome phenomenon but as a debtor, it's a catalyst in debt repayment misery. The compounding work against you, even when you're asleep. Take for example a thirty year mortgage at ten percent. If you borrow $100,000.00, your payback amount for 30 years will be a whopping $315,925.00, approximately. That's alarming, isn't it? That's the nature of the beast, this pushes people into debt crisis if we're out of a source of income.

2) Debt trap
Borrowing is made so easy this days, such that you become trapped in ever ending cycle of trying to stay afloat by supplementing your lifestyle with debt. Debt in America has become a societal epidemic. Getting in takes no effort through the various debt instruments and channels that have been created. Getting out in this debt trap is what always become next to impossible. To some, it creates great feeling of power and satisfaction at least momentarily. This factor makes getting out of serious debt a battle of the giants. As you stay in this trap, a high debt ceiling is built up and your debt ratio to your income increases dramatically.

3) Mortgaging of future
When you take up debt or should I say sign on to debt agreement, you're mortgaging your future. The danger here is that, you can't guarantee your future income. Taking up debt at current earning figure, even if your budget would allow, should be a serious introspection. Things do change, including, the earning power and its sources, that's the fact of life.

There are also spiritual dangers of debt which I hope to address on future articles. For now, suffice it to say that, debt may deny God an opportunity to work on your behalf.

How do I avoid debt problems? There are many things you can do. I suggest first and foremost, live within your budget. If you don't have one,create one now. Have a spirit of contentment. Remember life isn't about how much stuff you have but how well you live and the freedom to be yourself. Debt will rob you of that freedom.

Dr.Ephraim John Udofia is the founder and Presiding Bishop of Living Faith Apostolic Ministries. International Mission-intensive ministry, both in foreign and home missions with currently over six churches in three countries. Dr.Udofia is the author of over seven life-changing books. He's passionately involved in church planting, crusades, conferences and ministers' training since the seventies. Dr.Udofia holds a BS. in Management, minor in accounting, an MBA, and Doctorate in Ministry (Dmin) with major in Missions. He is a former CEO of Precious Jewels Inc. for 19 years. Also a former banker and security representative holding both State and Federal licenses. A financial counselor, motivational speaker, mentor, marriage counselor and an outstanding dedicated family man. He is happily married with five grown children.

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