March 11, 2009

How to Get out and Stay Out of Debt

How to Get Out and Stay Out of Debt

Five Quick Tips                                                                           [Main Story]

1. Make a decision. Recognize the problem. Decide to become debt free!
The most difficult thing to do when you are in over your head in debt is to admit to yourself that you are out of control and you need to change your attitude about spending. To make debt disappear requires money management discipline and reordering your lifestyle priorities.

2. Seek divine help.
Ask for God’s forgiveness and guidance. Ask for His strength to help carry out your decision; and make a covenant with God that you will use His blessings to pay off your debts.

3. Discontinue all credit purchases.
Stop going further into debt! Decide you will not borrow for any purpose!

4. Determine your current overall financial situation.
Sit down and list all the amounts you owe on your home, credit cards, vehicle and student loans, department store credit lines, etc. Be absolutely honest in terms of the total amount you or your family owes. This will give you the true picture of your situation and motivate you to become debt free.

5. Develop a repayment plan.
If you aren’t already doing so, start with establishing the paying of tithe. Lay the foundation of faithfulness to God, and then you can do what you can to eliminate the debt with His blessing. List all your debt in ascending order with the largest balance on top and the smallest at the bottom. Work to pay off debts, going from smallest to largest. Make sure you develop a new balanced household budget that includes all living expenses plus all your debts. Stick to the budget and don’t borrow again until all current debts are completely paid off.

—Information gathered from Lesson 4 of the new Faith and Finance, a 12-lesson practical study on money management, prepared by the Stewardship Department of the North American Division of Seventh-day Adventists.