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How to break the debt cycle (Part 1 – What is debt?)

man with hand on temple looking at laptop

This is a 2-part series on breaking free from the debt cycle! In part 2, we explore how you can avoid the debt trap. Click here to read part 2!


“The rich rule over the poor, and the borrower is slave to the lender.” (Proverbs 22:7)

“The wise man saves for the future but the foolish man spends whatever he gets.” (Proverbs 21:20)

Debt is a huge problem for many and causes much PAIN, STRESS and BONDAGE.

  • Are you in debt?
  • Do you feel like you are being strangled by debt?         
  • Is your debt spiraling out of control?               
  • Would you like to be debt-free?    

If you answered YES to any of these questions then the next few weeks will benefit you.

Today we are starting  new series on “HOW TO BREAK THE DEBT CYCLE?”

Over the next few weeks I want to show you how you can squash your debt burden.

If you find this blog post helpful and encouraging, please leave a like and don’t forget to leave a comment in the comment section, located at the bottom of the post. Join us by subscribing! We would greatly appreciate your input and support! With all that said, let’s get right into it…


Many of us have at some stage during our working lives experienced the negative impact of debt on our lives. I want to shed some light on this subject and want to also give you a few practical ideas and tips on, firstly how to avoid debt, and secondly how to become debt-free.

Debt is often brought on by poor discipline and bad spending habits.

During this series we will look at …

  • What is debt?
  • How to avoid the debt trap?
  • Why do many get into debt and what are the consequences of being in debt?
  • We will also share a workable DEBT ATTACK STRATEGY that you can apply to get out of debt.
  • We will also show you how you can SHRINK YOUR DEBT and to BUILD UP YOUR ASSETS!

But firstly,  we are going to kickstart our series by getting a better idea on WHAT IS DEBT?

The dictionary defines debt as being “something (typically, money) that is owed or that one is bound to pay”.

So if you borrow money, or go into overdraft, or buy goods on credit (i.e. store cards, credit cards) you are in debt until such time as you have paid back what you owe.

But not only are you having to pay back the amount you owe, you are also being charged interest on the amount ‘borrowed’. And that interest also has to be paid by you.

Debt can be a huge bondage and can lead to stress, strained family relationships and much heartache.

Romans 13:8 “Owe nothing to anyone—except love”

So, in a nutshell…

DEBT is all money that you have borrowed (plus interest due) and which has to be repaid. This includes; credit cards, store cards, personal loans, bank overdrafts, motor car loans, money borrowed from friends and family, and your home loan.

Debt is therefore something you are bound to pay. Debt puts you in bondage to the person or institution you owe.

Some debt is unavoidable, like buying a home or a motor car. But, watch out for those small debts, that can build up quickly, and that can seriously mess up your cashflow.

There are basically two types of debt:

  • ‘good debt’
  • ‘bad debt’.

Good debt’ allows you to buy items that appreciate (increase in value) over time, or could provide you with an additional source of income. (Eg. a home or property)

On the other hand: ‘Bad debt’ only buys you items that depreciate (lose value) over time. (Eg. Consumer goods like toasters, TV’s, fridges, microwave ovens and clothing etc.)

These items need to be bought for cash, or if bought on credit, they should be paid for at a faster rate than they depreciate. It doesn’t make sense to ‘pay off’ a  TV over 5 years when it’s ‘life expectancy’ is only 2 years. 

A new car is also generally viewed as a ‘bad debt’. You buy a brand new car and as you drive it off the showroom floor, it has lost 20% of its value immediately.

Statistics also show that many are even getting deeper into debt by buying things that have no value attached to them. Some get into debt by spending money on entertainment and take-aways. This is an extremely bad debt as it has no asset value, but still leads to a debt having to be repaid.  

A word of caution: Be careful! – Even so called ‘good debts’ can be bad if you live above your means.

You need to earn more than you spend. Or put another way – You need to spend less than you earn. Your ‘IN’s have to be more than your ‘OUT’s.

Also make provision for potential future interest rate increases. You may be able to afford your debt repayments currently. However if  interest rates rise in the future, will you be able to afford your repayments? It is vital that you build margin into your budget.

Although we all know that we should have a budget (or financial plan) in place in order to manage our finances, the reality is that many people don’t have a plan in place.

I would suggest that you:

  1. Put a budget in place,
  2. Be disciplined with your money management,
  3. Think twice before you buy anything on credit, and  
  4. Keep a record of your spending

Debt puts you in bondage, and the short term satisfaction of buying something on credit may leave you broke, debt ridden and stressed out over the longer term. Before you buy items you cannot afford, ask yourself – IS IT WORTH IT!

When it comes to debt, be smart. So if you are seriously planning to get out of debt, and to stay out, then you need to plan how to use your finances wisely. And it all begins with your budget … your financial plan to success. 

There can be no doubt that debt, or rather unchecked debt, can be a major problem for most people. But is it? Is it really the problem, or is it the symptom of overspending and under-saving? The way to get out of debt is to change your habits. Get rid of the bad habits and introduce new effective habits.

Proverbs 14:16: “The wise are cautious and avoid danger; fools plunge ahead with reckless confidence.”


Many people vastly underestimate how much they owe.

A survey was conducted by NerdWallet: They compared credit card debt totals reported by lenders with estimates from consumers of what they owed.

Guess what they found?

There was a huge discrepancy between what people stated they owed on their debt compared to the actual debt they owed.

Some of the discrepancy may have stemmed from people being too embarrassed about how much money they owed.

But many unfortunately just bury their heads in the sand, and pretend that they do not have a debt problem. Acting this way will not make your debt go away. This approach will only end up making your bad situation even worse.


“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” – Ogden Nash

“When you get in debt you become a slave.” – Andrew Jackson

“Never spend your money before you have it.” – Thomas Jefferson


Be honorable and pay your debts!

“The wicked borrow and do not repay, but the righteous give generously.” (Psalm 37:21)

“Do not withhold good from those to whom it is due, when it is in your power to act.” (Proverbs 3:27)

Trust God. He will see you through!

Nahum 1:7

“The Lord is good, a refuge in times of trouble. He cares for those who trust in him.” (NIV)

We all owed a debt we could not repay!

It is called sin …

Romans 6:23

“For the wages of sin is death, but the gift of God is eternal life in Christ Jesus our Lord”          

Sin puts us in bondage. Jesus Christ came and paid the FULL price of our debt so that we can be free.

He paid the debt with His life when He shed His blood on the cross, so that we can go free. Take His free gift of life.

John 3:16

“For God so loved the world (THATS YOU) that he gave his one and only Son (JESUS), that whoever believes (TRUSTS, PUTS THEIR FAITH/CONFIDENCE IN HIM) in him shall not perish (IN HELL) but have eternal life (WITH GOD) .

We were cut off from God due to our sin, but Jesus paid the full price on the cross so that we can be reconnected to God. God loves you so much that He made a way for you to become part of his family. He wants to share forever with you.  

You can start or restart your walk with God, as His beloved child. What are you waiting for?

selective focus photo of person holding book. Prayer against debt.


Father, I give you my life along with my debts, burdens and failures. Lord Jesus, I ask you to be my Savior. Be the central part of my life. Today I put my life in your hands. Lord, please help me to manage my money well and to live a life that pleases you. I ask you to please pour our your favour on my life. In Jesus name. Amen.


Debt causes so much pain and stress, but with God at your side you can shrink your debts. It is time to declare war on your debt. You can break the debt cycle! And, you can build towards a more fruitful financial future by managing your money better.

God bless you. 

If this message has spoken to you, and you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.

If you found this blog post helpful and encouraging, please leave a like and don’t forget to leave a comment in the comment section, located at the bottom of the post. Join us by subscribing! We would greatly appreciate your input and support!

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