“The rich rule over the poor, and the borrower is servant to the lender.” – Proverbs 22:7
The Bible never says that carrying debt is a sin, but it definitely strikes a cautionary stance. As someone who once had $20,000 of credit card debt, I can vouch for the sentiments of the proverb above. If you’re looking to free yourself from the clutches of debt, here are the steps I’ve found effective.
1. Commit to going no further into debt. Depending on how much debt you have, it may feel impossible to get out of it. Still, despite what may look like a tough road ahead, the first step is to commit to the journey. Of course, that means committing to going no further into debt. If your credit cards tempt you to spend more than you can pay off each month, take them out of your wallet/purse. Get them out of reach.
2. Find out where you are. As with any goal, clarity is essential. In this case, that means totaling up exactly how much debt you have. Go to the Accelerated Debt Payoff Calculator and list your debts in order, from the lowest balance to the highest — credit cards, personal loans, college loans, car loans, home equity loans, and any others. You don’t have to include your mortgage, but you can if you’d like to make that part of your deleveraging plan as well.
3. Go public with your debt. This may be the most bone-rearranging step of all, but also the most beneficial. There’s something powerful about telling another person how much debt you have and that you’re committed to getting out of debt. Invite them to ask you about your progress from time to time and to pray for you.
This request for accountability will be tremendously helpful to you, and it might just be helpful for the other person as well. You see, many people have debt, possibly including your accountability partner. Your willingness to open up about your debt might just create the space for them to talk about theirs, and then you can support
4. “Fix” and roll your payments. The main point here is to make sure you keep making (at least) this month’s minimum required payment every month, instead of paying what will turn out to be a declining minimum payment. You see, your required minimum payment is based on a percentage of your balance. If your balance is going down a little each month, so will your required minimum payment. You’ll be amazed at how much more quickly you’ll get out of debt if you at least fix your payments on this month’s amount.
5. Accelerate your payments. Paying more than the fixed minimum each month will really speed up the process of getting out of debt. If you have multiple debts, target your lowest balance debt first. Completely paying off some of your smaller debts will be very motivating.
6. Keep going. For motivation, use the Accelerated Debt Payoff Calculator mentioned earlier to run some numbers and see how much faster you’d get out of debt if you put an extra $10 per month toward your debts. What about an extra $25, or even $100 per month? Enter these extra amounts in the box where it says, “Enter a monthly dollar amount you can add to your debt payoff plan.”
Seeing the difference may motivate you to cut your entertainment or clothing spending to free up money to pay off debt faster. You might decide to sell some things or even pick up an extra part-time job to raise cash.
It took me four-and-a-half years to pay off my $20,000 of credit-card debt. There were plenty of times when the journey felt like it would go on forever. But I soon realized God was using that trying time to mold my heart. He was teaching me how to follow and trust Him. He was teaching me patience, and He was showing me that my value does not depend on how much money I have or what I own. Beginning to understand that God was using this difficult time in my life for a greater purpose was very encouraging.
If you follow the steps outlined above, you will get out of debt eventually. Along the way, look for what else God has for you in this experience. It’s possible that He has a purpose for this journey that goes well beyond money.
Matt Bell is the author of four Biblical money management books published by NavPress. He speaks at churches and conferences throughout the country and writes the MattAboutMoney blog.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.