Financial Literacy

As income tax return season reminds us to take a hard look at our finances, it also invites a deeper question we often avoid: Is all debt harmful, or is there a difference between bad debt and good debt?

The Bible does not shy away from the subject of wealth. In fact, Scripture speaks more about money and possessions than almost any other topic—not because wealth is the goal of life, but because it reveals the posture of the human heart. When understood biblically, wealth creation is not about accumulation for self, but stewardship for God's purposes. The Bible says wealth begins with God: "Remember the Lord your God, for it is He who gives you the ability to produce wealth." (Deuteronomy 8:18). The skills, opportunities, strength, creativity, and discipline we have are gifts from God. Wealth creation, therefore, begins with gratitude and humility, recognizing God as the source—not luck, intelligence, or effort alone. Work is not a course but a calling. Through faithful labor—whether farming, teaching, business, or craftsmanship—God invites us to participate in His provision for the world. The Bible never encourages us to depend on wealth, as it can take the place of God. Money is a servant, not a savior. Wealth creation is about multiplying what God has placed in our hands—time, resources, abilities—for His glory. The Bible says, "Dishonest money dwindles away, but whoever gathers money little by little makes it grow." (Proverbs 13:11).

Debt is like a fire or a trap; it can build a home, cook a meal, or burn it down. Borrowing is not a sin, but it should always be done with caution, purpose, and responsibility. Debt can be a powerful tool for wealth creation. Debt is a servant, and it should never become a savior. It needs to be aligned with wise stewardship, productivity, and restraint. It should fund assets, not liabilities. Never borrow against depreciating assets like a car or most real estate. When it is borrowed against appreciating assets that generate income, it becomes your best friend, shaping your financial future. Good debt is debt that is leveraged wisely to invest in building wealth that you can transfer to future generations. Bad debt comes from impulse or desire, creating anxiety and injustice. The Bible consistently treats bad debt as a burden, not a blessing, and it limits one's freedom: "The borrower is slave to the lender." (Proverbs 22:7). "The wicked borrow and do not repay." (Psalm 37:21).

Here, in this limited space, I'll use two of the most influential Western financial voices often discussed in Christian spaces: Dr. Dave Ramsey (radical debt avoidance) and Dr. Robert Kiyosaki (strategic use of debt for wealth creation). Ramsey views freedom through eliminating debt, while Kiyosaki views wealth through leverage and assets. He distinguishes between bad debt (consumer debt) and good debt (debt used to acquire income-producing assets). For Kiyosaki, wealthy people don't work for money; they make money work for them. The tension between safety and strategy is visible.

Dave Ramsey, from Financial Peace University, wrote extensively about wealth, budgeting, and how to get out of debt. "Live like no one else so later you can live and give like no one else" is the catchphrase he often uses. One of the best pieces of advice he shares is the format he calls the "seven baby steps" for financial freedom. Of course, they are written in a Western context, but they are applicable with global significance. The first step is to save up to $1,000 for your emergency fund. The second step is to pay off all debt except your house, using the debt snowball method. If you have credit card debt, pay it off one at a time—smallest amounts first, then larger ones—while paying the minimum on all other credit card debts. The third step is to save three to six months of expenses in a fully funded emergency fund. This will protect you from job loss, illness, or any unexpected hardship and turn fear into confidence. Then, invest 15% of your household income in retirement. This is about stewardship, not greed; it helps you prepare faithfully for the future. The fifth step is to save for your children's college or wedding fund, helping to reduce future financial burdens. The sixth step is to pay off your home early, providing freedom and stability. The seventh step is to build wealth and give—living a debt-free life with purpose while enjoying God's blessings without guilt. The goal is radical generosity and a lasting legacy.

Dave Ramsey frequently emphasizes that one's income is the most important tool for building wealth, arguing that monthly debt payments steal the potential to invest and create long-term wealth. He advises that to build wealth, one must avoid wasting money on high-depreciation items, like new cars, and instead focus on investing income. When money is tied up in debt payments (cars, credit cards, or mortgages), you are working to make others rich. Millionaires are made by investing their income, not by spending it.

Robert Kiyosaki is a well-known American entrepreneur, investor, and financial educator, best recognized as the author of the best-selling book Rich Dad Poor Dad. He teaches a distinctive approach to money that emphasizes financial literacy, cash-flow–producing assets, and the strategic use of debt to build wealth. Kiyosaki's work challenges traditional ideas about jobs, savings, and retirement, encouraging people to think like owners rather than employees. His work has shaped global conversations about wealth creation, investing, and financial independence.

Debt itself is not the problem; how and why one uses debt is what matters. Debt can accelerate wealth creation by acquiring income-producing, appreciating assets. Cash flow is the key to paying off the debt while still leaving income. Using leverage allows you to control larger assets with less personal capital, helping wealth grow faster than saving alone. Good debt shifts focus from saving to cash flow. Debt is always tax-efficient, encourages financial education, and separates assets from liabilities. Kiyosaki defines wealth as what puts money into your pocket. Good debt helps clarify the difference between assets and liabilities. Debt is a tool, not a moral evil. He argues that debt is morally neutral—like fire. In wise hands, it builds; in careless hands, it destroys. Debt can work while you sleep. When tied to strong assets, debt allows money to work for you instead of you working for money. If debt is on a fixed interest rate, inflation works in the borrower's favor. This is why some investors call inflation "a silent ally of debtors." In other words, inflation transfers wealth from savers to borrowers if the borrower holds assets or income that rise with inflation.

Remember, "The poor and middle class work for money. The rich have money work for them." — Robert Kiyosaki. A person should only use debt if they are financially educated enough to manage it. The goal is to ensure the asset's income comfortably covers the debt service. The question is: How are you using debt? Do you have bad debt or good debt? Use whichever approach you are comfortable with or at what stage of life you are in your financial journey. But remember the Lord your God, for it is He who gives you the ability to produce wealth. (Deuteronomy 8:18)