The rich ruleth over the poor, and the borrower is servant to the lender. (Prov.22:7
Introduction.
One of the major matters that arise concerning family finance is the issue of debt. There are a lot of families that are neck deep in avoidable debt. They don’t like the situation but instead of getting out of it, they are rather getting deeper and deeper into more debts due to ignorance. We are going to look at the matter of debt from two angles:
Debt Avoidance.
Never go into debt without ensuring that it is unavoidable and that you are using the money for a productive purpose which you should be able to pay back. Have aversion for debt; Remember that no loan is free, there is payback and usually with interest; Be convinced that whatever you may use loan for may be achieved with your resources, though it may be slow. Be convinced that pressure for loan repayment can shorten your life. If you must take loan, please note the following;
• There is no free loan, you have to pay back with interest.
• Ask yourself whether you really need the loan before the offer comes because once the offer comes, most people are not able to say no.
• Honestly look at your finances, will you be able to pay back? Will what you are obtaining the loan for increase your capacity to generate more income?
• Imagine the worst case scenario; in case you can’t pay back, what are the implications? Will your family be able to accommodate the consequences of not paying back? If your residence was used as collateral, what will happen to your family if you can’t afford to pay back?
The answer to the above questions may help you to decide whether to go ahead and accept the loan or not.
Debt Elimination.
Let there be the desire and determination to be free from debt. Nobody really enjoys being a debtor, but the elimination of debt requires the determination to take some steps which one may not be able to take otherwise. Some of the steps which may be taken to be debt-free are as follows:
1. Prayerfully determine that you want to get out of debt.
2. Determine your financial situation by frankly listing all the debts that you owe. You may look at the possibility of selling off some of your possessions in order to reduce the debt.
3. Open up to your spouse about the details of the debt.
4. Stop adding to your debt by refusing to add fresh debts however attractive the terms are.
5. Cut down on expenses so that you may be able to save some money which may be identified as usable for repayment.
6. You may also consider an activity that may bring in extra income that may be used for repayments.
7. Have a repayment plan for each of the debts you are owing and communicate with your creditors.
8. Avoid any temptation to suspend repayments because once your default, the interest is compounded and borne by you.
9. Never allow the fear of your creditors to demobilize or cripple your health because it will complicate matters. Instead of fear, plan and face reality!
Conclusion.
The mindset of debt avoidance and elimination is so important for the success of a marriage because the family may find itself in deep crisis because of debt. The mindset will make you to as much as possible avoid loan except it is absolutely imperative. Such mindset will also make you to be desirous of eliminating it as early as possible towards the financial health of your family.
Dr. Mike Oluniyi.
