I hope you have read the two previous articles in this series. In them I covered two financial disciplines I think are essential for financial success- Over-spending and Creating Assets. 
So if you have followed the advice contained in them- reduced your spending and created assets- Great job!!

Why are those two concepts important? Easy answer: It leads to part three of the series--Getting (and Staying) Out of Debt!

Teens, newly-engaged and newly married couples are in the forefront of my mind when I consider the topic of debt. Why? Because I greatly desire that they are fully educated on the dangers of debt and the many horrible experiences that being in debt can cause. The number one argument couples experience is on the topic of money. Debt makes home life tense- like trying to walk thru field of well-hidden land mines.

Therefore it is imperative that we avoid debt as much as possible and if we are in it we need to aggressively move towards freeing ourselves from its clutches. Proverbs 22:7 tells us that- The rich rule over the poor, and the borrower is slave to the lender.

Do you want to be a slave to credit card companies, lien holders, banks and other lending institutions, or would you rather be free and able to put your money to work for you?

 Of course you'd rather be debt free, so let's look at how to do so. These tips will work for anyone willing to

*Sacrifice

*Remain disciplined

*Keep future goals in mind &

*Trust Biblical principles- they work!

My first piece of advice is cut up your credit cards.

(wait, wait, wait, don't leave….stick with me for a bit)

Here's food for thought from the book Where Did My Money Go? By Bob Hopkins:


" Most credit card companies do not want you to pay off your monthly bills. They want you maxed out. They can't make obscene profits on interest alone…" Mr. Hopkins goes on to explain that those credit card holders who pay off their bill on a monthly basis are referred to as "deadbeat clients".

(Yeah, I didn't appreciate the term either)

I can attest to the truth of this. My wife and I used to work in a call center taking in-coming calls for a giant credit card company. Many times clients would ask for a credit limit increase and end up confused as to why they were denied. They'd say things like, "I've been with you guys for a really long time. I pay off my bill every month. Why can't I get an increase?"

The question was legitimate and so was their confusion. They were managing their money well. It makes sense that this type of client would be allowed to borrow more money because they have shown they will pay it back in a timely manner. But, the credit card companies are not interested in you being responsible or Godly. They are interested in charging you late fees, interest, membership fees, etc. It's all about THEM making money. 

Consider this: Why should you continue giving more and more of your hard earned cash to people who do not support your positive, wealth-building actions?

 Also, if you don't cut up those credit cards you'll keep using them. 

 I know, I know, some of you are saying, "I can just stop using it, no need to cut it up Taz, that's a bit extreme."

 If that were true you would not be in the debt situation that now has you shackled, worried, up at night, working overtime, arguing with your spouse, mad at the kids and unable to afford to send your kid to band camp much less college.

So keep your eyes on the prize. Keep your account open but cut up the cards and work on paying them off. Once you have a balance of zero dollars you can order new cards.

So now that you have cut them up, step two is pay more than the minimum balance. This is really important. While working at the call center I learned that even a medium sized credit card balance can take a while to pay off. 

 I called my credit card company the other day and asked, "How long would it take to pay off my current balance of $348.17 if I only paid the minimum due each month?" The agent asked for some personal information and came back with the answer of "One year and eight months".

 I consider that a very long time considering the balance is not really all that big. Don't you? Ya see, in this situation the credit card company (a.k.a. another big bank) charges me interest each month that I have a balance on my card. So my minimum payment reduces my debt but the interest is added in next month which brings the balance up a bit also. Each month this process is repeated there for dragging out the process of paying off the debt. In my case, instead of paying off a little over three hundred dollars I could end up paying over $500!! Yeah, that's interest at work- cut up those cards and pay more than the minimum. 

 Call your credit card companies and ask them how much you'd have to pay each month in order to pay off your cards in six months. If the answer they give you is too much for your budget, don't be ashamed, just ask, "How about if I  pay it off in a year?" Keep asking until you get a number that works with your income and budget.

You need to make sacrifices, period! One of the things I admire about my wife is her financial discipline. There was a time when she was out of work so- being the responsible person she is- she decided to cancel her satellite subscription and she signed up for Netflix instead. There were also other areas in her life where she cut back in order to survive while looking for employment.

Can you say the same about yourself? Are you willing to sacrifice in order to spread your money further and reduce your debt? 

 Consider your spending habits and add up the following monthly costs:

1. Eating out

2. Movies

3. Clothes

4. Video Games

5. Concerts

6. Cigarettes

7. Alcohol…….

…and all the other non-essentials.

 Now that you have that number in front of you, imagine sending those funds to your creditors each month. I am sure you see where I am going with this. That money, currently spent on non-essentials, could greatly reduce your debt. 

 You are literally spending away your financial freedom.

(let that sink in)

My next piece of advice is not something I hear in financial circles a lot and I think it's a shame and that is; read books about how money really works.

John Adams said it really well when he uttered these words: "All the perplexities, confusion and distress in America arise not from deficits of the constitution or confederation, not from want of honor or virtue, so much as down-right ignorance of coin, credit and circulation."

I love that statement. I cannot tell you how empowering, freeing and eye-opening it is to soak up the wisdom in books like…

*Where Did My Money Go?

*Money Came by The House The Other Day

*Financial Peace

*Digging Out The Money Pit

*What Ever Happened To The American Dream?

*The Coming Economic Earthquake

*Rich Dad, Poor Dad (entire series)

*Why We Want You To Be Rich

*The Millionaire Mind  &

*The Millionaire Next Door

*The Automatic Millionaire

The knowledge shared by the wise folks if the financial industry yielded me a greater understanding of how money works and what money really is.

That's right, money is not really what we think it is. What do I mean by that? Get those books I listed above and you'll see.

 Also, the concept of having my money work for me was driven home by these books and the authors who have lived that concept.

In part two of this series I spoke about the necessity of Creating Assets. That is how you have money work for you! Imagine that you have an ATM machine in your bedroom and every time you put in $200 it spit out $275 back at you. I can imagine you'd spend a lot of time putting $200 into that machine, correct? Now imagine if you put in the 200 and when you got the 275 back you took the excess 75 and sent it to a creditor, reducing your debt by 75 dollars. Can you see how you'd become debt free if you were patient and disciplined enough? This is what an asset does for you. Not only does it increase your income it allows you to reduce and eventually eliminate your debt.

You might now be saying, "Taz, you said you were going to show us how to get out and stay out of debt."

My only reply would be, "All the things that helped you get out of debt are the same things that will keep you out of it. Stay disciplined, spend less than you make, save, invest, pay off credit cards each month and keep creating assets.

There are tons more pieces of advice I could list but honestly, you have to dive into the books, DVDs, audio disks and websites for yourself. Take personal responsibility, take charge and don't let Satan beat you down with financial negligence.

Remember Proverbs 22:7- The rich rule over the poor, and the borrower is slave to the lender.

Let's not be slaves- let's be Financially Free!!

 





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    I'm just an everyday guy, father, husband, Christian and business owner. Here I am sharing my experiences which serve to prove the validity of Biblical teachings concerning finances, money and stewardship.

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