Steps to Getting
Debt Free

Getting debt free should be a goal of every Christian. Proverbs 22:7 tells us that, "The rich rules over the poor, and the borrower is servant to the lender."

We had a goal of being debt free even before we married. It is a financial goal we set during pre-marriage counseling.

There have been many set backs over the years... medical bills, failed businesses, college expenses, loss of income...

But we never gave up on the goal. You shouldn't either! Christian business opportunities make it possible to live a debt free lifestyle.

So... how can you make this dream of getting debt free a reality? Here are the steps we take to move closer to being completely debt free... even paying off our home.

#1 Prepare a Budget

"Riches can disappear fast... so watch your business interests closely. Know the state of your flocks and herds." Proverbs 27:23-24

Financial freedom is not determined on how much you make... but on how you spend it! Know where you are putting your money. Know where it's going.

To control spending you have to nip it in the budget. Here is our budget worksheet. Yes... it is work! But it is the single most important step that cannot be skipped.

#2 List Everything You Owe

List everyone you owe money to. Banks, Credit Cards, Stores, Doctors, Hospitals, Family, Friends... all of it. Show how much you owe... what your monthly payments are... how much interest you're paying... terms of loans... all finance charges.

Get the facts at any price! Here's the simple equation: Ignorance plus easy credit equals financial disaster. Getting debt free requires brutal honesty on your part.

#3 Prioritize Your Debt

You want to pay off the debt that is costing you the most... in interest that is. Here's how. Pay the minimum payment of each debt. Then take any extra and apply it towards the highest interest debt until it is paid off.

Now apply what you were paying on that debt to the next highest rate in line. Repeat the process until it's all paid off. You will see that as you have more extra cash to apply to less costly debt it will begin to disappear fast!

An Excel spreadsheet, designed for American credit card debtors, can be downloaded free from www.geocities.com/schizeckinosy/Snowball.html. This is a great tool that shows how long it will take you to be debt free and how to do it.

#4 Rate Surf

As you begin to eliminate higher cost debt following these steps... also look for ways to lower or consolidate your debt cost even further. We call this rate surfing.

There are many offers to transfer balances from one card to a new card with the incentive of low or zero interest rates.

Take advantage of these offers but beware of the terms. One slip and you could be in a wipe out... paying higher rates than before. It is a bit of a game and you have to learn to play to your advantage.

Bottom line in getting debt free... get rid of the highest cost debt first.

Being content with what you have greatly helps speed the process. It will also keep you from getting into trouble again in the future.

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