Background Scripture: Proverbs 6:1-5; 22:7
Quotes of the Week:
Never expect a loan to a friend to be paid back if you want to keep that friend.
Bryant H. McGill
This lesson continues a series talking about our money. What kind of agreements are made in regards to money? Well, unless you were born with access to a fat back account, you probably know what it means to borrow money. In fact, most people who go to college come out with some sort of student loan that they have to pay back. Then, there are cars and houses and all kinds of other things that we buy. When you buy a house, then you need furnishings. I would imagine that most of us would be amazed if we were able to see how much money we have spent in our lifetimes.
If you watch TV, commercials are geared to get you to want to buy a product. Some channels are solely devoted to selling things and if you watch them too long, you are likely to get mesmerized and ask yourself how you could possibly have existed without whatever it is that they are selling. Those who are selling often want to make it seem as though you are getting a great deal with the financing they offer. No interest for several years! Too good to be true. I wonder how many people get the product with that financing and forget all about it, only to be hit with a huge interest penalty years later.
The truth of the matter is that we all will need to buy things. Some buy more than they need, but we all need things. Berkley and I do a good job of sticking to a budget, but with all that we have had to deal with in the past couple of years since the onset of my disease, we have found ourselves having to borrow more than we would like to pay for things that we truly need. We try to be wise with what we have saved; what we are earning and what is invested. We have medication expenses, medical expenses, home modification expenses, transportation expenses on top of the normal living expenses. While we, like many others, thought we were saving for a rainy day, we were not accounting for the magnitude of expenses that we now face. Thankfully, we have good insurance, but we were ill prepared for the onslaught of other expenses. Even when any of us may think we are prepared for what may come, we see how quickly things could go south.
Some people get themselves into trouble by paying no mind to what they make as opposed to what they spend and they end up chasing themselves to pay for something that they have already used or no longer have. This would be a valuable lesson for each of us. When you pay with cash, you know what you have available and what you can spend. If you don't have it, you can't spend it. If you use checks (which seem outdated now), and you regularly balance your checkbook, you at least have some notion of what is available. Remember, just because you have a check does not mean that you have money! If you use credit cards or debit cards, it can get much trickier, as some charges do not show up immediately, so you can easily get confused. I know more than one person that has paid for a small item (such as a soda) with a debit card, only to be charged a rather exorbitant overdraft fee (greater than $30). As you live and learn, hopefully you have learned from your own (or maybe someone else's) similar mistakes. Another typical problem that happens is the presumption that a person will make the money in the months to come, so some people will take out high interest loans to get what they want now, expecting to pay it back soon. I suspect that many have done something similar to this and have lived to regret it - paying for something that they no longer have in their possession.
In the first couple of verses, Solomon addresses the problem associated with making yourself responsible for another person's debt and pledging to pay it off if they default. The language used expresses putting up security or shaking hands in pledge, but if we wanted to modernize this, we could talk about signing on the dotted line. We would have to agree that by far and away, most people never read what is above the dotted line, anymore that what is above what they 'accept' online when loading an application on their phone or computer.
The implication of making yourself responsible for another in financial matters may be thought of cosigning for a loan. The advice for cosigning a loan for a family member or friend is always virtually the same: Don't do it, and if you do, understand the consequences if something goes wrong. Some parents will do this for their children, when they are still at home and are able to at least somewhat control finances. However, this is up to individual families to decide, as there can be considerable risk. For some, it may work out great, but for others, it can create a nightmare. When a child becomes an adult, cosigning on a loan is very seldom good advice. If you choose to cosign, you are expressing that you will cover repayment, in the event that the other person defaults. Certainly the person for whom you cosign will never say that they plan to default, but this often happens. All you need to do is "google" information about cosigning loans and you will understand that it is very risky and can lead to financial ruin for all parties.
The advice that is given in the next few verses is to essentially get off the note. When we have allowed others to control our resources, we are potentially putting ourselves in an intolerable situation that we find to be totally out of our control. As Solomon writes, he implies that one should go today and beg to be taken off of the note, or risk the potential to end up in poverty or slavery. Wouldn't it have been better to not allow yourself and your finances to be put in that situation in the first place? If the situation has merit and you are agreeable, it is often better to give the money to someone else rather than cosigning. Even in those cases, consider the amount of risk you are willing to accept. In these words, Solomon is giving wisdom for successful business lives and allowing us to prosper to the point where we can help others in need.
Certainly, we all will be in debt at some point. I marvel at those who have managed to pay off all of their debt, as that seems like a foreign concept to many of us. I don't believe that there is a problem with controlled debt, as long as you are positioned to pay it off and do not put yourself further into debt. However, the more debt you have will take money away from what you have available presently.
We are called to be wise stewards of our resources. When we see needs, we should be willing and able to help meet them. If we have made unwise decisions with our finances, we may very well find ourselves unable to meet the needs of others. How sad when we have made ourselves slaves to an uncaring lender and find ourselves unable to help others in need.
It would be great if all who read this were solvent financially. It would be great if we had never made foolish decisions with our money and have not made ourselves beholden to others. However, there are all kinds of people with all sorts of situations. You can't undo what has already been done, but you can decide to not allow yourself to be taken advantage in the future.
If you are in debt, find a way to get yourself out. Develop a plan for recovery. Ensure that you are aware of your situation. For some, it would be wise to get help from services that can help you setup payment plans. Do whatever you need to do to grasp control, so that you can be available to help others in need when that situation arises.