Is Debt Bad or Good?

            Families, communities, and nations are stronger when parents minimize and eventually eliminate family debt. Americans are currently facing high rates of inflation with threats of stagflation. Reports are that individuals are putting more expenses on their credit cards. I have heard people mention that people may not be able to make their mortgage payments. If enough people default on their mortgages, there could be a bust of the housing bubble.

According to E. Jeffrey Hill and Bryan L. Sudweeks in their Fundamentals of Family Finance – Living Joyfully within Your Means, “credit can be a wonderful tool” that “has enabled many families to meet important needs that they could not have met otherwise: a college degree, a home, a car” (2016, p. 52). The following quotes come from their chapter four about credit and loans.

            Leaders of The Church of Jesus Christ of Latter-day Saints have taught that “debt incurred for education, a modest home, or a basic automobile may be necessary to provide for a family” (Elder Robert D. Hales, “Becoming Provident Providers Temporally and Spiritually,” April 2009 General Conference).

            Church leaders have also warned about taking on unwise debt. President J. Reuben Clark, Jr. gave this warning: “Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it … and whenever you get in its way or cross its course or fail to meet its demands, it crushes you” (Conference Report, 1938, pp. 102-109).

            One of the problems caused by excess and/or unwise debt is the damage that it does to the marriage relationship. Elder Marvin J. Ashton quoted a study done by the American Bar Association that “89 percent of all divorces can be traced to quarrels and accusations over money” (“One for the Money,” September 2007 Ensign).

            President Thomas S. Monson spoke about the negative effect that debt has on family relationships: “Feelings become strained, quarrels more frequent and nerves frayed when excess debt knocks on the door. Resources channeled to make payment on debts do not put one crumb on the table, provide one degree of warmth in the house, or bring one thread into a garment” (Julie A. Dockstader, “’That noble gift: love at home,’” Church News: The Church of Jesus Christ of Latter-day Saints (May 2001).

            President Gordon B. Hinckley taught, “Debt can be a terrible thing. It is so easy to incur and so difficult to repay. Borrowed money is had only at a price, and that price can be burdensome” (“‘Thou Shalt Not Covet,’” March 1990 Ensign).

            President Ezra Taft Benson echoed the counsel of other leaders, “Let us avoid debt as we would avoid a plague; where we are now in debt, let us get out of debt; if not today, then tomorrow” (“Prepare for the Days of Tribulation”, October 1980 General Conference).

            We may already be in the “days of tribulation.” If not, those days are close. So-called experts expect the current inflation rate to lead to stagflation and a worse economy. Now is not the time to take on more debt. It is a time when we cut spending as much as possible and use the emergency account to handle true emergencies, not maintain our lifestyle. It is also a time that we can use some of our food storage, which will help in rotating it. Parents who work toward the goal of minimizing and eliminating debt will strengthen their family, community, and nation.