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There’s a saying about personal finances that was made popular a few years ago: “debt is dumb and cash is king.” This was said by one of the most influential financial experts in the country–Dave Ramsey. This saying is so popular that people have made it their mantra as they work to gain control over their finances. A recent Facebook post on the Financial Peace University Facebook page exhibits how much people dive into this saying. People love it, live it, and breathe it.

But there’s one major problem with this mantra: it’s wrong. Debt is not dumb and cash is not king. Thinking this way can be dangerous.

In fact, the man who popularized the statement admits it’s wrong. states, “Money is amoral. It doesn’t have any guiding principles of its own.” You see, cash cannot be righteous or a “king;” cash is simply cash. The same is true of debt. Debt is not dumb, and it’s not smart, it’s simply debt. Ramsey himself explains, “Think about a brick for a second. In the hands of the right person, a brick can be used to skillfully build a home for a family. But in the wrong hands, a brick can be used to break your car window and steal your wallet. It’s all about whose hands it’s in. The brick doesn’t care!” 

Inanimate objects like a brick, cash, or debt cannot be smart, dumb, or king. It’s all about the person behind the object. And that’s where we need to focus.

The Person Behind The Debt

Anyone can use debt to buy things they can’t really afford. Debt can be used to act on selfishness and impatience. It can be dangerous!

I’m a licensed Insurance Agent, Investment Advisor, and Loan Originator. I’m a financial expert that has seen the personal finances of countless people. I have witnessed situations of people using debt to cause financial harm. It’s one of the main reasons why I started Stewardship. Poor financial decisions, including debt, can lead to money problems, which leads to relationship problems. This is just plain wrong! But again, it’s the person making the decisions with the debt, not the debt itself.

Debt can also be used to get a college education. Without debt, I wouldn’t have been able to attend Christian higher education to learn about God’s word and grow. Debt has been a tool that I used to buy a home. Not just a brick and sticks structure, but a place where I lay my head each night, where my wife and I raise our children. A home in a neighborhood where we can love and serve people. Debt can be used to do amazing things.

The Person Behind The Cash

One thing that can separate the “haves” and “have-nots” is money. Access to cash creates various freedoms and opportunities on many levels. It can be an unbelievable blessing and is obviously valuable. But again, cash is not good or bad. It’s not a king or queen. But what a person does with cash can be good or bad. You can donate cash to help end hunger in a community. Alternatively, it can be a source of pride or a cause of fear. As illustrated by Jesus in The Parable of the Talents, cash is not what matters. What matters most is what people do with it. We are to be good stewards of the cash we have. Bad actions with cash can make us “wicked” or “lazy”.

It’s About You

Debt is not dumb. Cash is not king. Instead of focusing on the object, we should be focusing on our actions. Debt has been used to ravage families, yet it’s been used to build some of the wealthiest families the world has seen.

Cash has been used to make tremendous impacts on communities and nations. It can also be the root of pride, heartache, and pain.

Debt and cash are tools. Use them well with a multitude of wise counselors to help you in your decision making. 

“It’s all about whose hands it’s in.” – Dave Ramsey