Getting out of the debt trap

Vocations and Debt

By Phil Lenahan

When Jesus spoke to the rich young man who asked Him what he should do to inherit eternal life, Jesus responded with the need to follow the commandments. The man said he had kept the commandments, to which Christ replies,

 "One thing you still lack. Sell all that you have and distribute to the poor, and you will have treasure in heaven; and come, follow me. But when the rich young man heard this he became sad, for he was very rich. Jesus looked at him said, "How hard it is for those who have riches to enter the Kingdom of God"  (Lk 18:22-24).

Why would I bring up the story of the rich young man when the topic of this article is debt? While the search for material wealth continues to be an obstacle for many when it comes to embracing Christ through a priestly or religious vocation, we see that debt is having a similar effect. Here is the story of one young woman:

"I have a very practical question. I am, after several years of avoiding the question, beginning a process of spiritual direction and discernment regarding the religious life. However, I am a little discouraged from the beginning, as I still have about $35,000 to repay on my student loans from undergrad and law school (I have repaid about half of the original principal of the loans). It is my understanding that most orders won't even consider you if you have outstanding debt.

Are there any loan forgiveness programs out there? While I am just beginning the discernment process, this seems like something that could doom the process from the start."

Why do so many who feel called to the priesthood or religious life find themselves heavily in debt? It is natural for discernment to occur during the college years. As a result, undergraduate and graduate student loans¾which originally would have been taken on with the assumption that they could be paid back once in the work force¾are one of the primary factors. For others, the excessive debt is a function of bad habits when it comes to budgeting, spending patterns and the abuse of credit cards.

How can we reach the point that young men and women who receive the call from Christ to follow Him are in a position to say yes?  The answer is twofold. First, for those who haven't fallen into the trap of debt (or for those parents who are striving to foster an environment in the home that is open to a priestly or religious vocation), a key will be to make decisions in such a way as to avoid the pitfalls associated with creating a debt problem in the first place.

Second, for those who already find themselves deeply in debt, part of their saying yes to Christ will rest with the willingness to tackle the debt problem head on. In many of these cases, the young person is looking for a quick way out. They hope to find a benefactor who will offer to pay the debt. Yet, it may be better for the young man or woman to develop a plan where they take responsibility to work the debts down. It may be this very process of discipline; sacrifice and patience that will further open the door to the beautiful vocation to which they feel called.

Our Lord often works in paradoxical ways. While the debt load may seem far too burdensome to deal with, maybe He wants us to start with a simple plan to work the debts down on our own. Is it possible that at some point, He would choose to "speed up" the process by bringing a benefactor to the young person? Certainly! Yet at the same time, He wants us to act in a responsible manner at the present time.

So how does one avoid debt in the first place or start on a plan to eliminate debts that have already accrued? It starts with having a solid set of principles from which you can build an effective plan. Here are five key principles drawn from Scripture and Church teaching:

·        Seek First the Kingdom of God (Mt 6:19-21)

·        Trust in the Providence of God (Mt 6:31-33)

·        Develop a Charitable Spirit (Mal 3:7-10)

·        Practice the Virtue of Temperance (1 Tim 6:6-11)

·        Develop Personal Responsibility (Mt 25:14-30)

While there isn't space to expound on each of these, you can see how they provide tremendous balance. On the one hand, we are to trust in God's providence, yet at the same time, He calls us to personal responsibility. As you develop a plan to work your debts down, don't forget to be generous with others during the process. St. Paul tells us in his letter to the Corinthians, "Let me say this much: He who sows sparingly will reap sparingly, and he who sows bountifully will reap bountifully. Everyone must give according to what he has inwardly decided; not sadly, not grudgingly, for God loves a cheerful giver. God can multiply His favors among you so that you may always have enough of everything and even a surplus for good works" (2 Cor 9:6-8).

Here are some practical tips on eliminating debts:

·        Commit to no further debt. If you can't pay off current purchases on your credit card, cut them up.

·        Develop a realistic budget, which incorporates an amount to repay your existing consumer debt. Use a software program like Excel or Quicken to help calculate a debt repayment schedule. Make sure your budget balances.

·        Review your budget for spending habits that can be changed to allow for a more rapid debt repayment.

·        Be accountable to someone. This can be a friend, family member or pastor to help you stay on track.

·        Set up a visual system to show your progress, such as a chart on the refrigerator or bedroom mirror that shows your declining debt balances. Depending on the circumstances, it's not uncommon for a debt repayment plan to take from one to five years, so a visual aid, which tracks your progress, can help you to persevere.

Here is one more tip that will be critical. Too often, people fail to plan for what I call "irregular expenses." While they feel as though they are making progress, when the car's transmission, or an unexpected medical bill hits, they don't have the money to pay for the repair. These aren't really surprises; it's just that they don't occur as regularly as most other bills. The solution to this problem is to include a reasonable amount for these items in your budget and to set the money aside so it will be there when you need it.

As far as college related debts go, those who already have student loans need to follow the above listed steps to work the debts down. For high school students preparing for college or for parents who want to help their children avoid student loans (or at least a complete reliance on them), here are a few tips:  

·        Start saving early for college. At $20,000 per year, you would need to save nearly $450 per month to cover the complete cost of a private school. By starting early with what you can, the compounding of interest in your favor makes all the difference.

·        Parents should consider paying off their mortgage early to free up funds during the college years.

·        Remember that you can consider Catholic education as a part of your charitable giving.

·        Apply for scholarships.

·        Participate in work programs the college offers.

·        Work during summers while living at home to pay for a portion of the tuition expenses.

I encourage those who believe they are called to the priesthood or religious life to keep their eyes on Christ as they work through the various obstacles¾including debt problems¾that need to be removed before they can move ahead. Remember the words of St. Ignatius Loyola, "Pray as if everything depended on God and work as if everything depended on you." God love you.

Phil Lenahan is Executive Director of Catholic Answers.