Here is a G.O.O.D. 4-step financial plan:
- Get
- Out
- Of
- Debt
I recently heard an interesting description of what debt is. I”m not sure if I fully agree with it but I think it’s on the right track:
Debt is when you cannot pay what you owe.
If you have a mortgage and you’re paying your monthly payments you are not in debt because you are paying what you agreed to. If you can’t make your monthly payments then you’re in debt.
This also applies to credit cards. If you use them and pay them off each month you’re not in debt. If you can’t pay off what you owe then you are. My opinion regarding credit card debt is that it should be your #3 financial priority. Right after giving and necessary monthly expenses.
If you are paying only the minimum while waiting for God to send you a big check covering the amount you owe I urge you to re-consider your plan.
God can pay your bills for you, and He loves to show mercy and benevolence. But He also wants us to partner with Him and to be responsible for our choices. If you’ll begin to actively pay off your debt, you’ll see the wind of the Spirit come behind you and help you reach your goal.
When I got married I brought $4,000 of credit card debt. Anna and I decided that we would pray for a $4,000 check but also aggressively pay off the credit card. We sold my truck, downsized a few ‘luxuries’ We never never found 4 grand hiding under a rock like we were hoping for but we did pay off our debt surprisingly fast.
Credit Card debt puts a cap on your finances. It will not allow your budget to work the way it should. Ask the Lord for wisdom and favor and He will help. As you begin to walk out paying off your debt, He will supernaturally breathe on your efforts.
What have you done to get or stay debt free? Or what are you doing now to pay off any debt you have?
Idhrendur said:
Me, I’m in a (somewhat) bad situation. I’ve had to accept a fair amount of debt to get through school. Now that I’ve gradutated, I’m still in job limbo (working at a supermarket to pay the bills). Until I’m able to get a job with my degree, I’m still slowly sinking.
But then, the payoff begins at high speed.
Posted on April 25, 2007 at 9:50 am
Chana said:
A timely and wise post. This month I am officially debt-free, thank God! Revisited priorities and changed spending habits were effective. I achieved a goal to live cash-only by:
- closing credit accounts.
- (use debit card with credit company logo, if needed).
- decide needs vs. to limit spending.
- pay larger expenses direct, or at least partly cash.
Due to size of debt, I set up payments though a * reputable * consolidation program, that also helped to prevent problems with creditors who seemed to take any opportunity to keep my obligated to them. It took three years, but I am now liberated!
Posted on April 25, 2007 at 10:21 am
Chana said:
Sentence should read:
- decide needs vs. wants to limit spending.
Posted on April 25, 2007 at 10:24 am
Molly Mosack said:
Shawn - great post. I laughed out loud at your four step process.
I learned about the dangers of credit card debt the hard way in college. I maxed out my limit in under a year and it took me close to three years to pay it off. Since then I decided not to get another credit card until I could actually pay it off as I use it.
I find what works the best is to be faithful with what you have - i.e. not living beyond your means (great post on that too, btw) and giving. When I do that, everything seems to fall into place.
Posted on April 25, 2007 at 12:20 pm
adamhanly said:
i agree.
proverbs states “if you are surety for a friend (or financial institution or whatever) you need to deliver yourself.
surety is like a debt, but it’s when you have to give collateral because you cannot pay what you owe.
it says it like 5 times in proverbs.
yada yada yada
Posted on April 25, 2007 at 1:47 pm
Victoria Merita said:
Last year I got really serious about my debt. I ate ramen noodles (YUCK!!!!!) for three months, and downsized my living (i.e. no more eating out, no more coffee or pepsi, small apt.), got another job (besides ihop) and every ounce of money I got I threw at my debt.
I literally paid off $10,000 in 3 months….oh yeah, the Lord did help. But like you, I also never found the money hiding under a rock…he just blessed my efforts.
So…that’s what i did…and now i’m debt-free.
Posted on April 25, 2007 at 4:04 pm
Jenn S. (a.k.a. Ducky) said:
I tear up every credit card offer that comes in the mail. (If I want to build up credit, I’ll get a loan from the bank and use some money as collateral.) I only use a debit card, and I won’t buy things unless I can afford them.
I do have some debt in the form of student loans, but I’m paying them off, if slowly … I admit that some days I wish I had a “real” job so that I could pay off my loans more quickly.
Posted on April 25, 2007 at 4:52 pm
wonderbox said:
i am a huge fan of dave ramsey (www.daveramsey.com) and he (and many on his radio show) have so encouraged me on the journey to debt freedom. when i am free of the bondage of debt, i will be able to give even more and that goal excites me tremendously. when debt is mentioned in the bible, it is never positive.
being at in full time ministry position at an ihop makes it tough, but God does provide in wonderful ways, and in the 3.5 yrs i’ve been doing this, i have paid off $23,000 of the 30k that i owe and that is a testimony of HIS greatness.
i am a new reader to the fight spot and just wanted to say that you have an interesting and enjoyable website.
Posted on April 25, 2007 at 5:27 pm
Coffee ChriS said:
Been in debt and been debt free and been in debt and am now debt free. Debt Free is best!
Most debt comes from either impulse buying or managing an unsuspected crisis, or trying to keep up with others.
Whenever I’ve got back into debt it started out small and managable. Never stays small.
The crisis stuff can get resolved while building up a cash reserve although I find this hard to do as Prayer Missionary. By refusing to use credit to solve a “crisis” we allow God the opportunity to come though. We Christians create Ishmael’s in our lives every day by failing to wait upon God to fulfill his promises. He is faithful.
Stay debt free and see what He does.
Posted on April 26, 2007 at 8:54 am
Daniel Shattuck said:
Debt or using credit is spending money from the future.
Spending future earnings. So give yourself a “future” raise, and cut up your cards.
Unless what you buy on credit pays for itself and earns you a living.
Posted on April 29, 2007 at 10:59 pm
Debt Free Christian said:
Like you I brought several thousands of dollars of debt into my marriage (mostly from college). It is amazing though how much debt you can really pay off when you focus on it. I think the biggest thing my wife and I have done is made a commitment to be faithful in tithe and giving. I have been more blessed in the last 3 years and had more creative ideas than at any other time in my life. God has provided for us and blessed us beyond measure and I attribute it to being faithful first in establishing God’s ownership and our stewardship in tithe.
Posted on February 17, 2008 at 3:11 pm