Act Your Own Wage: A Guide to Getting Out of Debt (and Staying There!)

Lenders and advertisers use attractive definitions of debt that mask its harsh reality. The truth is, many types of debt are simply swapping short term gain for long term pain. Know what types of debt to avoid, how to get out of debt and stay debt free with this handy guide.

Types of debt

You may have heard of two different kinds of debt, good debt and bad debt. Good debt generally refers to mortgages and other investments where the money borrowed is paid back on an asset that grows in value. Bad debt is unfortunately all too common, and is debt incurred through unnecessary spending on consumer items and other goods and services.

A good way to think about good and bad debt is:

  • Home loan: Good debt. If you choose the right loan (and the right home) your property will increase in value while providing a roof over your head.
  • Car loan: Bad debt. Cars lose value fast. Instead of taking out a loan, save up money, and buy a car you can afford.

Bad debt

There are many ways you can get yourself into debt. Bad debt includes:

  • Money owed to credit-card companies
  • Personal bank loans
  • Money borrowed from relatives
  • Past due medical bills

Bills, such as the monthly electric bill, are not considered debt if they are paid on time. To understand the true cost of debt, we’ll look in detail at some types of common debt.

Credit card debt

Credit card debt accumulates through interest and fees owed. Credit cards let you spend money you don’t have, but that credit incurs interest, so you always pay back more than you spend.


Let’s assume your credit card debt costs you $1,000, in interest and fees every year. The cost to you over 40 years is $40,000. In contrast, if you had invested the $1000 a year for 40 years at 12 percent, after 40 years, your earnings would accumulate to somewhere around $767,000.

Home mortgage

A mortgage on a house is a type of debt you will need to consider if you ever want to own your own home. While mortgages can ultimately be good investments, it’s important to consider the interest rate, term and total borrowed on your mortgage before signing on the bottom line.


A 30 year home mortgage, at 10% interest rate, will require you to pay more than three times the amount originally borrowed. If you borrow $100,000, over a 30 year term, it will actually cost $315,925.

Personal loans

Banks and other financial institutions offer personal loans under the guise of helping you make your dreams come true, but often these loans are nothing more than high interest sinkholes of debt.


Taking out a $2000 personal loan to start a small business is a poor decision. Instead, if you want to start your own business, create a business plan and get a proper and approved business loan. Do your due diligence to make the most of your loan.

The personal cost of debt

Proverbs 22:7 “Just as the rich rule the poor, so the borrower is servant to the lender.”

Debt extracts a physical toll. It often increases stress, which contributes to mental, physical and emotional fatigue. Many people raise their standard of living through debt, only to discover that the debt ends up controlling their lives. ‘I owe, I owe, it’s off to work I go’ is an unfortunate reality for too many people.

Debt puts us in servitude, and the deeper we are in debt, the more of a servant we become. We do not have full freedom to decide where we spend our income because we are legally obligated to meet those debts.

Sometimes debt can’t be avoided, to buy a home for example. So consider the following before getting into debt:

  • Is the item being purchased an asset with the potential to appreciate or to produce an income?
  • Does the value of the item equal or exceed the amount owed against it?
  • Is the debt so large that the repayments put undue stress on the budget?

If you are in debt or do enter into debt, establish a goal to eliminate it as soon as possible. Prayerfully consider paying off all debt so that if the financial climate changes or your work status is interrupted, you owe no man anything.

“You were bought with a price; do not become slaves of men.” 1 Corinthians 7:23

Don’t live in denial

The denial spiral is one of the most dangerous mindsets you can have when in debt. It doesn’t matter if you’ve made a few mistakes, been unfortunate, or some combination of problems, debt has a habit of rising stealthily and sneaking up on you.

Face up to your debt problems. Look them straight in the eye. It’s only being open and honest with your current situation that allows you to decide a strategy to move forward.

Consolidate your debt

Some of your debt will have higher interest rates than others. Consolidating your debt means combining your loans into a single (or multiple) new loans to help pay off your debt faster (and with less pain). A financial advisor should be able to provide you with a path forward for consolidating your debt and making smarter budget decisions to meet repayments.

Write down your strategy

Keeping your debt recovery strategy all in your head is courting future mistakes. Instead, draft up your own plan for recovering from debt. NerdWallet recommends a 3 pronged approach:


Be patient, master your anxiety and focus on positive and gradual outcomes. The hill might seem high now, but each step is a little bit closer to your goal.


Often, our propensity to get into debt can come from a lack of well being. Turning to prayer when faced with the desire to overspend might help overcome these challenges.


Close credit cards you’re not using and just paying fees on. Sell off any assets you don’t need. Letting go of your ‘stuff’ and embracing a more humble lifestyle can enliven the spirit.

General Disclaimer

The content of this article includes advice that is general in nature and does not consider your personal situation. Christian Super encourages all people considering their options in retirement planning to seek out qualified professionals who can provide specific personal advice