President Ezra Taft Benson quoted a portion of 2 Kings 4:7 when he said, “Pay thy debt, and live” (“Pay Thy Debt, and Live,” Ensign, Jun. 1987, 3).

What wise counsel these words are for us today! For many years, inspired Church leaders have urged Latter-day Saints to get out of debt and live within their means. In the October 1998 general conference, President Gordon B. Hinckley emphasized the importance of these principles of personal finance when he said:

I am suggesting that the time has come to get our houses in order. So many of our people are living on the very edge of their income. In fact, some are living on borrowings. The economy is a fragile thing. . . . There is a portent of stormy weather ahead to which we had better give heed. . . . I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people. I recognize that it may be necessary to borrow for a home, of course. But let us buy a home that we can afford and thus ease the payments which will constantly hang over our heads without mercy or respite for as long as 30 years. No one knows when emergencies will strike [and we could be] helpless before creditors. We are carrying a message of self-reliance throughout the Church. Self-reliance cannot be obtained when there is serious debt hanging over a household. One has neither independence nor freedom from bondage when he is obligated to others. . . . I urge you to look to the condition of your finances. I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage. This is a part of the temporal gospel in which we believe. (Ensign, Nov. 1998, 52–54)

As President Hinckley points out, excessive debt is one of the financial problems that some members of the Church are struggling with today. This section aims to explain exactly what consumer debt is. This section also offers tips to help you better manage consumer debt throughout your life.

When you have completed this section, you should be able to do the following:

1. Understand how consumer loans can keep you from achieving your goals.
2. Explain the characteristics and costs of consumer loans.
3. Explain the characteristics and costs of mortgage loans.
4. Understand how to select the least expensive sources for consumer loans and how to reduce the costs of borrowing.