The Cautious Debtor
We’ve been looking at key characteristics of Prudent Spenders. We’ve noted that they are Generous Givers first and also Wise Savers. In addition to these two money personalities, Prudent Spenders are Cautious Debtors. A Cautious Debtor is one who avoids entering debt, is careful and strategic when incurring debt, and always repays debt.
Note that a Cautious Debtor doesn’t necessarily stay away from all debt. Primarily, Cautious Debtors avoid consumer debt – that is, debt that’s incurred on items that depreciate in value. But the Cautious Debtor recognizes some debt can be efficient and beneficial, such as a mortgage, a business loan or an educational loan. That said, Cautious Debtors don’t just assume that any debt is justified based on purpose. They weigh options and make wise decisions about entering debt. They look for opportunities to minimize the debt load and to mitigate the risk associated with debt.
Characteristics of Cautious Debtors
As with other aspects of prudent spending, Cautious Debtors are patient, content, and intentional. They’re not given to impulse buying (which is the direct cause of so much consumer debt). Their decisions are driven not by culture or marketing but rather by a holistic understanding and practice of stewardship.
Cautious debtors see debt as potentially dangerous, but not as inherently evil. They understand that all debt is a form of bondage to the lender (Proverbs 22:7). They realize that debt naturally presumes on the future (James 4:14). When considering taking on a loan, they take these truths into account.
Cautious debtors are careful and balanced about incurring debt. They make every effort to avoid debt on depreciating assets but consider carefully loans on appreciating items (such as a house). They avoid debt that requires a change in circumstances in order to pay it off (for example, a hoped-for raise or bonus). At the same time, they look for opportunities to leverage debt to create positive results (such as a business or education loan).
Habits of Cautious Debtors
Cautious Debtors spend prudently. They plan their spending so that it doesn’t exceed their income. They spend within the plan they’ve created, so that they don’t incur consumer debt to cover their spending. And they track their spending to ensure that they stay on plan.
Cautious Debtors save wisely. They create margin for unexpected expenses so that emergencies don’t force them to incur consumer debt. Cautious Debtors know how much they need to save for typical unexpected expenses and they discipline themselves to create those savings.
Finally, Cautious Debtors create plans for paying off loans. They don’t assume that they will stay in debt indefinitely but take responsibility for repaying (Psalm 37:21). They orient their Spending Plans to prioritize paying off inefficient consumer debt like credit cards and to faithfully pay off all debt. This goes back to the first point about spending prudently; Cautious Debtors dial back on lifestyle spending while they are paying off debt in order to create the margin they need.
Equipping Cautious Debtors
Churches need their people to be Cautious Debtors for several reasons. First, consumer debt fosters envy, greed, and selfishness; these are not the characteristics of a growing disciple of Jesus. Second, debt limits the resources available for generosity. Third, consumer debt is a major trigger of financial hardship, creating bondage and stress for the believer. Believers in this position are rarely able to prioritize growing spiritually and making kingdom impact.
Equipping Cautious Debtors begins with providing a Biblical perspective on money and stewardship. Most consumer debt results from responding to cultural influences rather than to God. Jesus’ warning in Luke 12:15 is a good reminder: “Life does not consist in an abundance of possessions.” Paul repeatedly warns against materialism and fleshly desires.
Those who have incurred enough debt to lead to financial hardship may need more than teaching. They may also need practical help to navigate their way out of debt and toward financial stability. Some will benefit from a stewardship program such as FreedUp; others may need deeper ongoing help from a budget coach. In any case, churches will find Biblical teaching and practical instruction on stewardship to be a strong antidote to the cultural messages that lead to debt.