The beginning of 2021 is fraught with uncertainties. Most people are entering the new year heavily encumbered with debt and facing limited employment prospects and global lockdowns. Rapidly rising unemployment and an increase in debt are most concerning. Seventy-seven percent of adults in the United States are suffering from financial anxiety, with 45 percent worrying particularly about debt (White, 2020). Although the statistics point to a bleak future, there is hope. Here are some pointers for effective debt management based on 2 Kings 4:1-7 (NIV).
Recognize your situation: Understand what you are dealing with. The widow in this Bible passage was acutely aware that her source of income had dried up as she said, “My husband is dead” (verse 1). She was in debt and was at risk of losing her most valuable assets (her two sons) to the creditor. “The first step is to admit to yourself that you have financial problems” (Mountain & Jones, 2020, p. 2). You need to understand your resources and “what you owe and who you owe” (Snyder, 2020, p. 2).
Understand why you are in debt: Understanding the cause of debt is important as this directs behavior toward the root cause. In the widow’s case, her husband left her with debt, and she had no source of income. Debt has many causes, including “impulsive consumer decisions” (Majamaa, etal, 2019, p. 241); and a lack of independent advice and financial knowledge, as well as insufficient income to meet living expenses (OECD, 2016). An Italian study revealed that low-income families “have a higher probability of being over-indebted (Cavalletti, etal, 2020, p. 760). The Organisation for Economic Co-operation and Development (OECD) specifically highlights causes stemming from lack of knowledge and suggests that debt can be reduced by closing the knowledge gap.
Seek help: The widow sought help. You need to take the first step and understand that you cannot solve this problem on your own. Depending on your location, there are free debt counseling services that may be available to you. The widow chose to go to a prophet, someone with knowledge whom she could trust.
Know the resources available to you: Do an inventory of your assets, possessions, and talents. What is within your reach? Do not underestimate the value of what you have, even if it is just a “small jar of . . . oil” (verse 2). This could be your time, health, physical strength, land, talent, etc. Snyder (2020) suggests that a tradesperson can provide services and negotiate reduced rent.
Find income-generating activities: Given the aforementioned connection between low income and indebtedness, growing income, though challenging, provides a more sustainable solution to meet basic needs. The Bible advocates hard work and resourcefulness. What is the need in your community that you can meet in exchange for payment?
Seek resources in your community that are underutilized: The widow was told to “go around and ask all your neighbors for empty jars” (verse 3). Your community may have, for example, a community garden where you can grow vegetables to eat, sell, and freeze for winter
Plan and follow through: Debt entails formulating a plan and focusing your efforts on doing the much-needed hard work. “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want” (Prov. 21:5, NRSV). According to Mountain and Jonas (2020), reducing debt is not easy or quick; it takes time and patience. If you commit to making debt reduction a priority, you will succeed.
The value of planning/budgeting cannot be overstated. Budgeting helps you understand where your money is going and allows you to target your spending (Kiplinger’s Personal Finance, 2016); it helps optimize opportunities and releases money for savings (OECD, 2016); “planning controls debt and a lack of planning contributes to debt” (Bird, etal, 2014, pp. 685, 686).
Remember to plan for the end of life; why leave your dependents struggling with your debt?
Involve your family: Work together with your family and those who are dependent on you. Your debt situation has a direct negative impact on them. They need to be part of the solution. The widow’s sons brought the jars. It is important that you have a family plan/budget that you all work together to put into place.
The widow was instructed; “Go inside and shut the door behind you and your sons” (verse 4). What does this mean? Getting out of debt is hard work. You need to huddle together and focus on the plan you are implementing. Do not acquire more debt. Close the door to costly distractions. Most important, protect your privacy
Take responsibility for changing your situation: The widow worked to eliminate debt. Avoid quick fixes. There are generally no fast lanes to getting out of debt. The OECD notes that “it is important that everybody has the knowledge, skills, and attitudes to improve their financial outcomes and well-being” (OECD, 2016, p. 59).
Be methodical: The widow followed logical steps. She (1) assessed her situation; (2) asked for help from an expert and asked her sons to be involved; (3) gathered vessels; (4) closed the door and worked to fill vessels with oil; (5) inquired about next steps; (6) and sold the oil. Identify sequential steps and make them part of the plan. Strive for specific, measurable, attainable, relevant, and time-bound (SMART) goals (Haughey, 2014).
Continue to consult the right people as you take steps to execute your plan; when the olive oil stopped flowing, the widow was ready for the next step and sought guidance.
Use income to pay debt: The widow was instructed, “Pay your debts. You and your sons can live on what is left.” Debt is a serious issue; the borrower is a “servant” to the lender. While you are not literally to starve, you must prioritize debt payment. In addition to the cost of financing debt (interest), the many stressors and health problems associated with debt make it incumbent on you to focus on paying your debt. Be frugal. When your debt is paid you can live more comfortably. Being frugal is validated by Snyder (2020), who echoes other financial advisors who view frugality as the “new normal” (p. 2).
Have faith: Take a big leap of faith coupled with effort and see what God can do for you. The widow had the faith to gather as many vessels as she could. She could very well have said, “What is the point? Clearly this little oil will not fill a single vessel.” There are several well-respected publications whose findings and advice give credence to these biblical lessons. Some of the most comprehensive advice is provided by Mountain and Jones (2020) and may be summed up as shown in the diagram below:
Food for thought: Do you have the knowledge to create a budget? Budgeting is a “planning tool that creates financial opportunity and future flexibility” (Snyder, 2020, p. 689). Increasing financial knowledge results in reduction of poverty and increased wealth (Khalil, 2020). Why not make a commitment today to seek knowledge and begin 2021 with a budget?
Finally—embrace 2021!! Live with hope. Plan, act, and let God do the rest. “For I the Lord thy God will hold thy right hand, saying unto thee, Fear not; I will help thee” (Isa. 41:13, KJV).
Bird, C. L., Sener, A., & Coskune, S. (2014). Visualizing financial success: planning is key. International Journal of Consumer Studies, 684-691.
Cavalletti, B., Lagazio, C., Lagomarsino, E., & Vandone, D. (2020, June 20). Consumer debt and financial frugality: Evidence from Italy. Journal of Consumer Policy (43), 747–765.
Haughey, D. (2014, Dec 13). A brief history of SMART goals. Retrieved from https://www. projectsmart.co.uk/brief-history-of-smart-goals. php
Khalil, M. (2020). Financial citizenship as a broader democratic context of financial literacy. Citizenship, Social and Economics Education, 1-14.
Kings James Bible. (n.d.). Retrieved from https:// www.kingjamesbibleonline.org/
Kiplinger’s Personal Finance. (2016). Build Wealth for a Lifetime. Just starting out? Raising a family? Getting ready to retire? Whatever your age, follow our moves for tending your finances and you’ll reap big rewards. Washington: Kiplinger’s Washington Editors, Inc.
Majamaa, K., Lehtinen, A., & Rantala, K. (2019). Debt judgments as a reflection of consumption-related debt problems. Journal of Consumer Policy, 223-244.
Mental Health Foundation. (2020, May 1). The COVID-19 pandemic, financial inequality and mental health. Mental Health in the Pandemic Series, p. 16.
Mountain, T. P., & Jones, W. P. (2020). Getting out of debt. Virginia Cooperative Extension. OECD. (2016). OECD/INFE International survey of adult Financial Literacy competencies. Paris: OECD.
Snyder, D. (2020, Jun). Beat the budget blues. Money (Australia Edition)(234), 8.
White, A. (2020, Oct 30). 77% of Americans are anxious about their financial situation— here’s how to take control. CNBC Select.