SPIRITUALLY IN DEBT

Most people would not think that being in debt has spiritual roots but it does. This is because the majority of people do not think in spiritual terms. Being in debt means that someone else owns you. You end up working for other people rather than working for yourself. You are not free to do as you please. You must please your master, your creditors and they can be a hard taskmaster because they can take everything you own from you.

Proverbs 22:7 makes this spiritual condition apparent, "The rich ruleth over the poor, and the borrower is servant (slave) to the lender." Those who are deep in debt are ruled by impulse rather than delayed gratification. They are visually motivated. They see something that they want, they purchase it on credit without regard to how and when they will pay for it. When purchasing on credit and not paying it off at the end of the month means that every purchase is more than the purchase price plus sales tax. Interest expense must also be added which makes the purchases more expensive than their original list price. You have to earn more money to pay off your purchases under this arrangement.

Delayed gratification is self control. It is disciplining oneself. The Frugal Accountant believes in delaying gratification. He is willing to wait and save his money before making major purchases. He will also think about saving his money to make a substantial down payment on a house purchase or car purchase. This brings down the amount that has to be borrowed for these major purchases and ultimately the amount of interest that will have to be payed.

There is an axiom that the spiritual always precedes the physical. The condition of the heart determines are attitude toward debt. The Frugal Accountant does not want to mortgage his future. He does not want to spend his entire life working for someone else. Instead of purchasing a house that will keep him tied down for a long time, he looks for a house that he can afford and meets his needs. It does not make sense to purchase a house that you cannot fully utilize. You are paying for a lot of empty space.

In purchasing a car, one must realize that this is a depreciating asset. It loses its value over time because it is machinery and machinery rusts and eventually wears out. Vehicles are designed to get us from point A to point B. Buy a car that you can afford. I own two cars. Both are used cars. I cannot afford to make payments or the price of a new car. When purchasing a new car, you will also be paying more for insurance than with an used car. If you purchase a car using credit, you have to factor in the interest paid. Many people talk only about the purchase price. Psychologically, they do not want to think about all the costs involved. Purchasing a new car also means that you will be paying higher sales tax.

Real estate, generally, appreciates over time because it is not going anywhere and also it is heavily influenced by the amount of real estate supply in a geographical location. Like a new car, the more expensive the purchase price for the home means that you will be paying higher property taxes and home insurance. Also, when you borrow money to purchase a home, you have the added cost of paying mortgage insurance.

Borrowing money has many negative ramifications. This is why it is wise to take into consideration the effect borrowing will have overall. The Frugal Accountant considers the total cost of purchases, not merely the purchase price. The Frugal Accountant knows that borrowing money adds to the purchase price and means that he is going to have to work harder to pay for the purchase. Learning to live without and saving up to purchase items is prudent and highly recommended.