San Francisco happens to be the third most expensive city in America. In the Mission District, the current average rent for a one bedroom apartment is $2,650.
It’s a neighborhood of striking contrast, where undocumented workers, homeless folks and tech billionaires share the same sidewalks. But aside from a few highly paid Facebook and Google employees, most people scrape and struggle to get by. San Francisco also happens to be the place where my family and I live—where we’ve raised three kids in a home we own and always managed to live off one modest income that’s never been more than an average teacher’s salary.
Sixteen years ago, my wife, Lisa, and I dreamed about moving to this amazing city to raise a family, start a new faith community and care for the needs of an at-risk neighborhood. But one of the biggest challenges was money, and we had to find creative ways make our dream work.
We’d wager the same is true for you. You sense God’s call toward a purpose, a career, a mission—but it’s hard to get anywhere fast with debt dragging you down.
We may enjoy the privilege of using someone else’s money, but in the long-run, the cost of borrowing adds up. In fact, the way most school loans and mortgages are structured, you’ll end up paying as much in interest as the original loan amount. Interest rates on most credit cards are 16-19 percent annually, with additional penalties for late and missed payments.
The average American has $7,150 in consumer debt—in other words, just in average credit card debt. If one pays the minimum monthly statement on that amount at the current average interest rate of 16.89 percent per year, it would take 35 years to pay off. As one friend put it, “Those weekly pizzas I put on my credit card 10 years ago in college have become very, very expensive.”
Debt can also be an obstacle that limits your options for the future. We have friends who can’t buy a home because of bad credit scores. We know others who, after they got engaged, discovered their combined school and credit debt was close to $150,000. As a result, they’ve had to put off certain dreams, such as starting a family or choosing more meaningful work.
But that’s not all. There are also spiritual reasons why it makes sense to move toward becoming debt-free.