The financially wise avoid debt. Proverbs warns, “The rich rules over the poor, And the borrower is the lender’s slave” (22:7).
Or, as the Seven Dwarfs might sing, “I owe, I owe it'd off to work I go…”
The Bible doesn’t teach that all debt is wrong, but debt is a trap. Sometimes debt is unavoidable in an emergency, or you might secure a loan to make your life a little easier, but it is best to avoid borrowing unless absolutely necessary. Especially for something that will go down in value, like a new car. Rent-to-own plans are not a good idea, either, and payday loans can tangle you up in a deepening spiral of liability.
The first five verses of Proverbs 6 advise against co-signing a loan for a friend. It is dangerous for both financial and relationship reasons. You oblige yourself to pay a loan for a person that the bank does not trust.
First, don’t borrow any more money. Don’t take out a debt consolidation loan. There will be fees, more interest and you’ll end up owing more money. Instead make the minimum payments on all your obligations and make extra payments on the smallest debt. When that one is paid off, work on the next smallest and so on. In this way, you are reversing the debt spiral in which you found yourself.
Commit any unexpected cash to reducing the debt and try to make some extra money. You can have a yard sale and get rid of your clutter or get a part time job. Even at minimum wage, a part time job will make enough to make a significant dent in your debt.
Keep going after you’ve paid off the credit cards and the car loans. Start saving to build up an emergency fund. Keep going. Start saving for your next car. If you can make a car payment, you can set that much aside. Make interest instead of paying it.
Be like the ant. “…it stores its provisions in summer and gathers its food at harvest.” (Proverbs 6:8)