Several years ago, I performed a study on money and finance, and ran across some noteworthy remarks by King David:

He has dug a pit and hollowed it out, and has fallen into the hole, which he made.” (Psalm 7:15)

This is what often happens to people with their finances. They dig a deep financial hole, generally because they incur too much debt, and then they fall in the hole.

In the book of Proverbs, we read where the wise person under­stands his ways and carefully considers his steps, particularly as they relate to finances. (Proverbs 14:8,15) On the other hand, a fool is one who is out of touch with reality. They are not forward thinking and therefore, do not give much thought to financial planning, running up large amounts of debt instead.

Not long ago, a young man visited my office, seeking advice. Though I didn’t know him very well, he appeared to be successful based on the upscale neighborhood he lived in and the lifestyle he led.

I quickly learned that his marriage was in trouble, and he was experiencing incredible financial pressure. He had maxed out all lines of credit, had no equity in his house, and was struggling just to pay the mortgage. Finally, he told me that selling his house and downsizing was not an option, because his wife refused to move out of their popular neighborhood.

I could not help him, because he was not in touch with reality. Over a 10-year period, he had dug a financial hole, fallen into it and did not know how to get out. It struck me how money has such a decep­tive power. It blinds us in such a way that we make terrible financial decisions.

I find most financial problems to be the result of too much debt. Solomon addresses debt in the book of Proverbs.

The rich rules over the poor, and the borrower becomes the lend­er’s slave. (Proverbs 22:7)

Do not be among those who give pledges, among those who be­come guarantors for debts. If you have nothing with which to pay, why should he take your bed from under you? (Proverbs 22:26,27)

I feel it is clear that debt is not sinful, but the Bible discourages it when it is not necessary. The main reason is because lenders have power over the borrower. I remember a very wise older man once said to me, “If you don’t go into debt, you will never go bankrupt.”

A good question we should consider is, “When is it wise to go into debt and when is it not? What is a good reason to go into debt and what is not?”

A majority of financial advisors would agree that a mortgage on your house or a loan on an automobile is reasonable, because the loan is backed by an asset that can be disposed of rather quickly to pay it off.

Sound bankers make good loans that make sense, and they do it to protect the bank, while protecting the borrower, as well. It is when lending institutions throw their standards out the window that they get in trouble, as do the borrowers. This is what happened in this last financial crisis.

Greg Brenneman is one of the world’s leading business turnaround executives. In his book, Right Away and All at Once, he shares wise words on debt. He says we should always match our debts with the life of our asset. There is a reason that your credit card bills come due every 30 days, your car loan in five years, and most home mortgages in 30 years. These loans have been set up to match the life of the un­derlying asset. Groceries and a tank of gasoline last less than a month, automobiles last five years or more, and homes much longer.

Where people get in trouble is when they borrow to support lavish lifestyles through items such as jewelry, designer clothes and vacations. This is generally done with credit card debt, and when this happens, it is the beginning of digging a hole.

Michael Kidwell and Steve Rhode, authors of Get Out of Debt: Smart Solutions to Your Money Problems, share this:

Debt is one of the leading causes of divorce, lack of sleep and poor work performance. It is truly one of the deep, dark secrets that people have. It robs them of their self-worth and keeps them from achieving dreams.

The Bible does not have many suggested financial goals, but it does appear to teach that being debt-free is a wise objective. When a person is out of debt, he or she discovers their possessions and lifestyle no longer possess them.

Richard E Simmons III is the founder and Executive Director of The Center for Executive Leadership and a best-selling author.