Getting Out of Debt

Getting Out of Debt by Ken Smith, Director of Christian Stewardship Ministries Finding Yourself in Debt Do you think you are in debt? That could be a matter of definition. My good friend Larry Burkett defines debt as "the inability to repay an agreed-upon obligation." By that definition, you can owe a lot of money, but still not be "in debt." How much you owe and how much interest you pay on what you owe will definitely affect what you can spend on other things. However, as long as you make your payments, you can legitimately argue you are not in debt.

So let us ask another question. Do you owe anyone money? If you do, ask yourself another question. Do you believe that owing money to someone else reflects God's best for you and yours? Most people would say "No." We instinctively know that owing money does not represent God's best for us. It is easy to rationalize owing money.

The lending community has convinced many of us that it makes sense to borrow on the equity in our homes. The rationale is that other investments made with money now tied up in real estate will earn more than a house will appreciate. That may be, but once that money is siphoned out of your home, it seldom translates into greater net worth. Credit card companies also offer benefits to entice us to borrow-benefits that translate into profits for them! The fact is, if you use a credit card, statistically you are going to spend about 35% more than if you paid cash. If you believe that God's best for you means avoiding borrowing, read on.

It is actually very simple to pay off what you owe and be debt-free for the rest of your life. It does not matter how you got into debt (year-end and Christmas spending, heavy use of credit cards, major health expenses, an engagement ring you couldn't afford, living above your means or any number of other very good reasons). You can get out of debt. If you have decided that it is time to be debt- free, I guarantee God will show you the way. Knowing and Doing God's Will There are three things you need to know and do to become debt-free and to gain freedom from money-related anxiety long before you have actually paid everything off.

The first is to know that you are giving at the level at which God wants you to give. The second is to decide not to borrow anything for any reason until everything you owe has been paid. (Hopefully you will continue that commitment after everything is paid so you will not have to go through the process all over again.) And the third is to spend in the future at the level at which God wants you to spend. Giving How can you know what God wants you to give? First, you must realize that what is important here is your attitude.

If you do not want to give, if you are not operating out of a spirit of generosity, it is very difficult to do what you need to do. So ask God to give you a spirit or an attitude of generosity. Only He can help you overcome an attitude of stinginess or selfishness. The Old Testament speaks in terms of a tithe or 10 per cent (Malachi 3:8-12). The New Testament mentions proportionate giving (1 Corinthians 16:2).

In my opinion, based on the experience of thousands of individuals and families I have counseled over the years, 10 percent should be the bare minimum for a Christian. The bottom line is that the more we give, the more we will receive-not necessarily in money, but definitely in freedom from money-related concern. It is not that God needs our crummy money. He is interested in our attitude. The more generous we are, the more freedom we will have.

Unless God clearly speaks to you to the contrary, I would suggest you begin with a minimum of 10 percent, hopefully 11 or 12 percent, with an eye toward moving to giving at least 20 percent of your gross income to the Lord and His work. The goal is to become confident that you are being obedient to God. Then, when the challenges that are sure to surface do surface, you can confidently proceed to the solution without wondering whether God is involved in the process. The next step is to decide that no matter what happens you are not going to borrow for any purpose. If you believe that God does not want you to borrow money, is there any reason to go into debt? So long as borrowing remains an option, you often will not come close to knowing what God really wanted you to know or learn in a given situation.

Your borrowing deprives you of the direction God would have provided had you not borrowed. In order to test your resolve, think of the worst thing that might happen that would tempt you to borrow. Then ask yourself whether God is capable of resolving that thing. If you believe He is capable, and if you desire to be obedient, is there any reason not to trust Him? If nothing else, look at your own track record. If you have not been able to make it work, why NOT trust Him? What do you have to lose? Paying What You Already Owe The next step is to develop a budget which will enable you to pay off your existing debt.

If you are not sure how to do that, you can do several things. You can attend one of Crown Financial Ministries' seminars. You can sign up for a Crown Ministries small group study. Or you can call Christian Stewardship Ministries for contribution-based personal counseling, either in person one-on-one or long distance by telephone. Our website (http://www.

csmin.org) can also connect you to us by email or to other ministries with the touch of a button. Once you know what to do, then you must exercise the discipline to do it. Some of us seem never to get to that point, despite great pain in many cases. The process begins with tracking your expenses by predetermined spending categories so that you have some idea where your money is going.

After you have done that for a while, you can decide how much you are going to spend within those same categories, including debt repayment. You decide in advance how much you are going to spend in each category, and before long you are not only out of debt, but you are on the road to becoming financially free. Obeying God If you know what God wants you to do, it is much easier to just be obedient and watch Him give you financial freedom. And until you do it, you have no one to blame but yourself for the pain of disobedience. I guarantee that if you are obedient in these three areas, you will be free of money-related anxiety.

Give at the level God wants you to give, do not borrow, and pay off existing obligations. Everything else will take care of itself. This article is used by permission of Christian Stewardship Ministries. Their web page has many excellent articles on Biblical principles of finance and time management. They also have an excellent course called The Life Management Study on time management from a Biblical perspective.

This course can be taken on-line or in a small group setting. To: Our Budget and Finance Page.