This week, let’s talk about debt.

Debt can build.

Debt can also kill.

Recently, I heard of someone I knew who passed away after being crushed under the weight of mounting debt. It was a sobering reminder that debt is not merely a financial issue. When debt becomes overwhelming, it can affect our emotions, our marriages, our relationships, our work and, ultimately, our lives.

So, what does the Bible say about debt?

Proverbs 22:7 gives us a very strong warning:

Debt creates an obligation. Once we borrow, we have committed part of our future income to someone else.

That is why, as a general principle, we should avoid unnecessary debt whenever possible.

We should think twice before borrowing money to buy an LV bag, fly first class, purchase a 100-inch television, or fund a lifestyle that we cannot genuinely afford.

Why borrow today to enjoy something when we are simply transferring the financial burden to our future?

Sometimes, what we call “I deserve this” is actually “I cannot afford this.”

The Bible also warns us about our attitude towards possessions:

Contentment is one of the greatest protections against unnecessary debt.

Not necessarily.

There are debts that may be necessary or potentially productive.

For example, buying a home or property in Singapore can involve millions of dollars. For many people, owning a property without some form of financing would simply be impossible.

Businesses may also need financing to expand, purchase equipment, acquire property, hire people or take advantage of genuine opportunities.

Debt, when used wisely, can become a tool.

But a tool can either build or destroy, depending on how it is used.

The question is therefore not simply:

“Is debt good or bad?”

Perhaps the better questions are:

Why am I borrowing?

Can I repay it?

And what happens if things don’t go according to plan?

For debts that may be necessary, I would approach them with the 3Rs of Borrowing.

Borrow for the right reason.

Before taking on debt, ask yourself:

“What am I borrowing this money for?”

Is it for a genuine need, a productive investment or something that can potentially create value?

Or is it simply to satisfy our wants?

There is a big difference between borrowing to purchase a home that we need and borrowing to upgrade to a luxury apartment simply because our friend has one.

There is also a difference between borrowing to expand a viable business and borrowing to maintain an extravagant lifestyle.

We need to distinguish between needs, productive opportunities and indulgence.

Jesus warned us:

Before we borrow, perhaps we should ask:

“Am I borrowing because I need it, or because I want to appear successful?”

That question alone can save us from many financial mistakes.

The second R is Borrow Responsibly.

If we borrow, we should have a realistic and responsible plan to repay.

Don’t simply look at:

“Can I afford the monthly instalment?”

Ask instead:

“What happens if my income falls?”

“What happens if interest rates rise?”

“What happens if my business performs badly?”

“What happens if I lose my job?”

“Can my family still cope?”

A loan may look affordable when everything goes well. The real test is whether we can survive when things don’t go according to plan.

Proverbs teaches us to think ahead:

Being responsible means we don’t borrow based on our maximum capacity simply because a bank is willing to lend us that amount.

The bank may tell us how much we can borrow.

But only we can decide how much we should borrow.

And as Christians, we should also remember that our financial decisions affect more than ourselves. They affect our spouse, our children and sometimes even our parents.

The third R is Borrow with Risk Management.

If we have to borrow, we should work to reduce the risks as much as possible.

Don’t assume that everything will always go according to plan.

Build an emergency reserve.

Have adequate insurance where appropriate.

Avoid excessive leverage.

Consider what happens if interest rates increase.

Think about whether the asset you are buying can generate sufficient income or retain sufficient value.

And don’t put everything at risk with one single investment.

Proverbs 27:12 says:

Good stewardship is not about avoiding every risk.

It is about understanding, managing and limiting unnecessary risk.

There is a difference between taking calculated risk and taking reckless risk.

Ultimately, debt should remain our servant, not become our master.

When used correctly, debt can help a family purchase a home, help a business expand and help an entrepreneur build something productive.

But when used wrongly, debt can destroy.

I have seen how debt can break families.

It can create conflict between husband and wife.

It can destroy friendships.

It can cause tremendous emotional stress.

And in tragic situations, the burden can become so overwhelming that people lose hope altogether.

That is why we should never treat debt casually.

The Bible says:

This does not mean every form of borrowing is automatically sinful. But it reminds us that debt is a serious obligation and that we should strive to honour what we owe.

As Christians, our ultimate goal is not to maximise what we can borrow.

Our goal is to be faithful stewards of what God has entrusted to us.

So before taking the next loan, signing the next financing agreement or increasing our leverage, perhaps we should pause and ask ourselves:

Am I borrowing reasonably?

Am I borrowing responsibly?

Am I managing the risks wisely?

If you have to borrow, be wise and be right.

Because debt can build.

But debt can also destroy.

The same financial tool that builds one person can crush another.

The difference is often not the debt itself, but the reason, the responsibility and the risk management behind it.

Let us therefore not pursue wealth at any cost.

Let us pursue faithful stewardship—using God’s resources wisely, responsibly and for His purposes.

Blessings,

David Poh

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