On Debt and Feeling Like a Slave

woman chainedI’m honestly not sure how it happened, but I sort of forgot that the Bible compares being in debt to slavery.  I hear Dave Ramsey say “the borrower is slave to the lender” on his podcast all the time – maybe that imprinted it on my brain as a Dave Ramsey-ism instead of recognizing it as Proverbs 22:7.  And I haven’t made any decisions about debt recently so I guess I let it float out of my brain as it wasn’t immediately relevant to my life!

 

I was talking with another Christian last week, though, about PF and he reminded me of the Proverbs 22 verse and some others advising against debt.  It definitely made me feel uneasy as I don’t want to be in direct opposition to the Bible’s wisdom!

 

The “the borrower is a slave” analogy, though, struck me as feeling false for our situation.  We are in debt – I have about $16k in student loans; they are currently subsidized and deferred, which means we are making no payments and the loans are garnering no interest thanks to the US taxpayer.  If you want to count what we charge to our credit cards before we pay them off, we are in debt to those companies for a few days every month as well.

 

However in both cases I don’t feel like a slave in the relationship – to the contrary, I feel that Sallie Mae and Chase are working for us.  We benefit monetarily from both of those arrangements through investment returns (we have the money we will use to pay off the loans invested) and credit card rewards.  (On a closer look, as taxpayers and consumers, we are subsidizing both of those benefits, though not likely to the extent that we receive them.)  We can choose to exit these relationships at any time because we have the money to pay everything off already earmarked, which doesn’t seem at all like a slave relationship.

 

I know that just because I feel something doesn’t make it true, but I’m struggling with how to understand this analogy legally/financially.  Even if we are cautioned against debt, like in Proverbs (bankruptcy, cosigning, etc.), I’m not sure that there can’t be cases where debt is prudent.

 

Do you think ‘the borrower is slave to the lender’ is a useful analogy in all cases?  Does your debt make you feel like a slave?  Do you consider debt to be spiritually unwise or sinful?

 

photo from Free Digital Photos

 

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27 Responses to "On Debt and Feeling Like a Slave"

  1. While I definately want to avoid debt where I can, I don’t think that the average person really can and still achieve their goals. Despite what Ramsey teaches, the average person isn’t going to ever be able to buy a house with cash. And frankly, it’s probably more expensive in the long run. Because, chances are, the place you rent in the mean time is much more expensive since the landlord is paying for all of the things you would as a homeowner and is still making a profit.

    For my next car, I want to avoid getting a loan, but if I get a promotion, I’ll be driving 60 miles each way to get to work. I have to do the analysis, but my gut reaction is that a car loan on a much more efficient vehicle would pay for itself in gas savings from the 2500 miles I’d be driving in a month.
    Edward Antrobus recently posted..Is “I Can’t” Really a Lie?

    1. Emily says:

      Honestly, that sounds like a slippery slope toward justifying a car lease! Not that I really think you’d go that far, but it’s the same sort of logic.

      1. Without the dillegence of testing the hypothesis yes. But I would never use a financial rationalization without first examining if it was actually true.
        Edward Antrobus recently posted..Is “I Can’t” Really a Lie?

  2. CashRebel says:

    I think it’s true most of the time. But when you successfully leverage debt to get an education, or start a business, everybody wins, and on that case id say the proverb doesn’t apply.
    CashRebel recently posted..Bank Accounts And Keeping Busy

    1. Emily says:

      I think that even “good” debt can feel like/be slavery, though. I guess some people feel it to a greater extent than others (fast mortgage payer-offers), which is why I’m not sure my feelings on this matter are super relevant in discerning reality.

  3. Matt Becker says:

    I certainly don’t think that debt is inherently right or wrong. I think it all depends on how you use it. As you said in one of your previous posts, there are very few one-size-fits-all rules that we can all live by and to me this is just another example.
    Matt Becker recently posted..How to Negotiate a Lower Bill

    1. Emily says:

      Yes, but my last post was from a values-independent stance (you have yours, I have mine…). This point presupposes that I’m a Christian who values what God says through the Bible. 🙂

  4. Lucas says:

    So lets start off by looking at the context of the passage. This particular statement is one of truth/understanding and wisdom, not a statement of what is sin or not. So it is the truth that if you owe someone something you are a slave to them in the sense that they can control your choices. The amount and extent of the control varies based on the amount/type of debt.

    There are several passages of scripture that talk about loaning to those in need: Deut. 15:7; Ps. 37:26; Matt. 5:42 (typically without interest to fellow isrealites, but with interest to foreigners) But excessive interest (Prov. 28:8; Ezek. 18:8, 13, 17; 22:12; Ps. 15:5), and all debts were suppose to be forgiven on the sabboth years (Deut. 15:1-11).

    So debt/loaning is understood as something that happens and is ok, but that it does impact those who are in debt and it is wise to not be controlled by your debt. Particularly this applies to taking out debt on something that is consumed or looses value very quickly, but to some extent to all debt. Personally I had a small college loan (~3k) and a car loan right after college, but made paying them off a priority before we got married as they did somewhat control what i could/couldn’t. We bought a house on a loan, but paid it off as soon as we possibly could becuase the bank does have all sorts of control over what you can/can’t do (having to have insurance, maintain certain things, pay taxes through them, etc. . . .), and becuase we believed the wisdom of trying to be out of debt. It has been very freeing although a little bit anti climactic with being completely out of debt.

    Using debt to finance business/investing is very different then financing lifestyle, and that is where most people get ensnared. And as long as you have the money elsewhere or resources to pay back a loan (other investments, or selling a house to pay the morgage), there is a lot of freedom in that.

    1. Emily says:

      The person I was talking with wasn’t really saying not to go into debt (like you said he was taking the “it happens” view of reality) but rather that it should be exited as fast as possible (Dave Ramsey approach), which is exactly the opposite of what we’re doing. What I hear you saying is that collateralized debt (as long as it equals or exceeds the value and you are willing to part with the collateral) is manageable. However I’m not sure why financing a business would be terribly different than financing lifestyle if it’s not backed up by savings elsewhere – I guess it depends if the debt can be paid by liquidating the business?

  5. Depends on person to person. I respect your thoughts. But I defer that debut is how one uses it smartly or effectively so that debt becomes your slave and you benefit through it. There are many ways I am not getting into it but want to say it depends on case by case basis.
    Rita P @ Digital Spikes recently posted..How to write and what to write when short of ideas

    1. Emily says:

      Do you think it depends on the disposition of the person or the facts of the case?

  6. Lucas provides an excellent analysis and good context for other times debt is mentioned in the bible.

    The very first part of that proverb though might give us some helpful context, too: “Just as the rich rule the poor, so the borrower is servant to the lender.” (NLT)

    This is just my opinion, but when we view the whole verse the proverb seems to be making a statement about power & position, & how those are affected by money. A lack of wealth (and a need to borrow it) puts you in a position to be ruled, at least in some way, by someone (or an organization) with wealth.
    Done by Forty recently posted..Outsourcing Yard Work, or Exploiting My Neighbor

    1. Lucas says:

      I agree. This is more of a “this is the truth about life” statement. But it does give you the clear wise goal of not being ruled becuase of being poor or being a slave due to debt. I don’t think you are being unwise in your current situation (as you have the funds to pay it back), but it is important to know that having any debt does make you subject to the lenders restrictions.

      1. Emily says:

        Yes, if Sallie Mae decided to revoke our subsidized status, for instance, we would just have to go along with it. In our case that is OK because we are not depending on it.

    2. Emily says:

      I agree that it’s mostly a statement about how the world works. It’s so tempting to say that the next step is “become rich” or “don’t go into debt” but it doesn’t say that explicitly.

  7. SarahN says:

    This is a great post, and Lucas has added some great information.

    I started reading the bible this year (in it’s entirety, rather than snippets etc), and am learning about all sorts of things it says to do and not do (like, ahem, I shouldn’t have shaved my head (I did it to support a friend with cancer)). I’ve also struggled with it saying not to publicise your giving/donations – which I was tracking on my monthly blog round up.

    As to debt and slavery. I think debt of any kind, does tie you to obligations. To repay. How to repay. As Done By Forty also talked about – he had some good points. Personally, my preference is away from debt – I wouldn’t get a car loan. I did have student loans, but paid for them upfront as much as possible. I have a mortgage, and I think I’ve been told it’s ‘good’ debt, but it does tie me to regular repayments, which ties me to work etc. Are these ties ‘bad’, I think, no, they aren’t. Work is good for the soul and the community (which is why I couldn’t have worked in sales). And bonds/being bound, well, isn’t that essentially the foundations of society. And really, slavery, whilst ‘big and bad’ now days, is essentially workers needing the work. It’s all relative to the conditions, to be honest. Oh, so much to think about, I hope this is coherent to you!
    SarahN recently posted..Waste Wednesday update

    1. Emily says:

      I’ve actually been purposefully reading the Bible, too! I’m finishing up the OT this summer – coincidentally I just have the wisdom literature left (though I think I’ve read all of it before this current project). I actually read an article just the other day that you might find informative given your shaved head and such – it’s on how Christians should view OT law in light of the Resurrection. http://www.christianitytoday.com/ct/2013/july-august/learning-to-love-leviticus.html?paging=off

      You are right that the is not a huge distinction between being in good debt, like for a mortgage, and just not being financially independent because you are still obligated to work to pay your bills regardless if they are debt or just living expenses.

      1. SarahN says:

        OH wow, congrats on the OT being read – I’m reading a few chapters of a book a day – but a different book each day, which helps balance the heavy with the more known stuff. It’s going well, I’m a little over 1/4 of the way through!
        SarahN recently posted..Smile for you close up!

        1. Emily says:

          Yeah it’s been a long time coming. I go through periods of more intense reading and then not so much for a while. That’s why I’m glad my small group has switched from discussing each week’s sermons to actually doing Bible study – it’s nice to have a regular reading schedule. Are you following a plan (external or that you made) or winging it?

  8. The problem with being in debt is that eventually you accept your faith. Most countries don’t believe in borrowing and make you earn the money first before you buy things.
    Marissa @ Thirty Six Months recently posted..Six Ways to Save a Family Member from Financial Turmoil

    1. Emily says:

      Yeah, I don’t think I would choose to go into debt again except for a mortgage. But I don’t seem to have a problem staying in debt!

  9. E 2 says:

    I think that in our culture and time, debt makes you a slave just like work makes you a slave. The Bible wasn’t written at a time when most free people did wage labor for others whose disapproval could mean losing house, home, security, etc, which is worse than what most people risk from non-mortgage debt. But it’s pretty rare to be able to be totally independent, whether in the Marxist sense of owning your own means of production, or the PF sense of financial independence. I think debt is part of this equation but frankly, it’s different from “not being rich” in degree, not in kind. And the Bible’s pretty understanding of “not being rich.”

    1. Emily says:

      Yes I agree that having to work is very similar to being in debt. I guess in that sense you are a slave to your lifestyle.

      1. Stephen says:

        Slaves to ourselves – our needs. Even the hunter-gatherer is a slave to his needs for food, water, and shelter. He has to build his shelter. He has to find water. He has to find food. 🙂

        If debt can be used to increase income or reduce expenses it would likely be the prudent thing to do, at least financially. Sometimes, though, there are more important things.

        1. Emily says:

          That’s the argument Kyle always gives me when I tell him he has a sugar addiction. “I’m addicted to food. I’m addicted to air.”

  10. […] had some great insight into Proverbs 22:7 on my post on not feeling like a slave: “I think that in our culture and time, debt makes you a slave just like work makes you a […]

  11. […] @ Evolving Personal Finance writes On Debt and Feeling Like a Slave – Proverbs says that the borrower is slave to the lender; however, I’m in debt but I […]

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