8 Steps to Becoming Debt Free!

[Jonathan K]

1) Realize you have a problem and decide to deal with it. This is a big first step. Knowing you have a problem is the first and most important step in solving an issue.

2) Start Tithing. Tithing for any follower of Christ is a must. 10% or a tithe is the starting point. Once you get out of debt you will be able to save more, give more, and live better

"Honor the Lord from your wealth and from the first of all your produce; So your barns will be filled with plenty and your vats will overflow with new wine."- Proverbs 3:9-10

Below is the promise that God will supply your needs to overflowing.

“'Bring the whole tithe into the storehouse, so that there may be food in My house, and test Me now in this,' says the Lord of hosts, 'if I will not open for you the windows of heaven and pour out for you a blessing until it overflows.'" - Malachi 3:10

Consider the following command:

"Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law."- Romans 13:8

3) Pay your bills on time and make a budget. Fees and interest can really hurt you. Pay your bills on time to avoid these. A budget will keep you on track to success. Make sure to stick with it and adjust your budget as needed. See how to make a budget.

4) Cut back on your costs. Your phone & cable/satellite bill is a great place to start. Eat out less. Cut down on entertainment. Make a list of actual needs and wants. Slash anything and everything you can to the bare bone. At least until you are debt free. For a good way to plan meals & save money on food click here.

“Live like no one else (cut your costs & get out of debt) so you can (eventually) live like no one else.” – Dave Ramsey

5) Sell some stuff you don't use. An old video game, TV, or clothes you don’t use come to mind. Or maybe old DVD’s, books, or furniture you don’t really use.

6) Save for an emergency fund. Save for an emergency fund of $500 if you make less than 24K a year and $1000 if you make over 24K a year. This will allow you to pay for emergencies such as a new appliance like a frig, car repairs, emergency hospital visits.

7) Spend less than you make. This is a commitment and life style change. This seems obvious but unless you determine to do so you will always spend more than you make.

8) Pay off your debt ASAP. Pay your debt back quickly and intentionally. Have gazelle-like intesity!

Proverbs 6:4–5 says, “Give no sleep to your eyes, nor slumber to your eyelids. Deliver yourself like a gazelle from the hand of the hunter, and like a bird from the hand of the fowler.”

Use the debt snowball strategy.

Consider that if you are paying interest of 20-30% on your debt and your investments will make you 8-15% it might be better to pay off your debt before continuing to invest for retirement.

Don't go on vacations. Try staycations, where you are off from work but stay home, instead.

Get a part-time job, get a roommate, or start a side business where you can generate some extra cash.

Then pay off your debt as fast as you can. Use the debt snowball strategy.

This works trust me. My wife and I did this and in two years we became debt free. We cut expenses, sold stuff, and lived frugally. It wasn’t easy but now we give more, save more, and live better!

The quicker you pay off your debt the better. We can do so much more for others and our lives are not stressed because of finances.

For more see Financial Peace by Dave Ramsey or getting out of debt by Bob Lotich.