Getting Out of Debt

America has quite the problem of materialism which leads to MANY of us living in debt because of it. Or sometimes debt just happens due to a hard time. Or maybe you as a mom just want to stay at home and live as a one income family. There are SEVERAL "programs" out there that you can go through to walk you through getting out of debt. However, we have found that no one program fits all circumstances. Here is our story and some tips that we have incorporated to help our family pay off debt.

About 12 years ago, we were in a good amount of debt. John was led to begin seminary, but we knew we couldn't do it with our debt and for me to continue to stay home with our - at the time - one child. We followed some simple guidelines and paid off thousands of dollars within a short amount of time(including selling a house by FSBO within 2 days).  Fast forward .... Here we are 12 year later, and the debt has caught up with us again. Multiple moves, mounting medical bills, and a few bad choices, have put us back in debt again. The debt is quite larger this time; however, we are just as committed to being debt free as we were the first time -- this time will just take longer. Here are some simple steps to help you get started:


#1. Identify your WHY!  Why do you want to get out of debt??  Financial freedom? Ministry Freedom? Live on one income??  Once you know your why, you can begin the process.

#2. PRAY! PRAY! PRAY! You cannot expect to accomplish great things if you don't submit your plan to God. Pray for these three main areas: for God to give you the strength, perseverance, and wisdom to make the changes you need to make, that He will hold back major life expenses, and that (as one program called it) "miracle money" will be made available to pay off your debt.

NOW LET'S GET STARTED!!!!

#1. Rainy day fund!!!  You have to set up an emergency fund. This will cover those life expenses that arise and keep you out of debt. I know Dave Ramsey states that you should save $1000 for a "rainy" day. However, due to the size of our family and possible upcoming medical bills for Luke,  we do not feel this is enough. Determine the size of your families needed rainy day fund. START HERE!!!  This MUST be in place to help you STAY OUT of debt.

#2. Now for the hard part!!! YOU MUST CUT BACK!!! Take a look around your house. Do you really need Great Aunt Irene's dusty knick-knack??  Go through your home and GET RID OF STUFF!!! Ebay, Craigs List, Letgo, are great places for your more expensive items. Then have a yard sell. Shoot, have two -- sale till the stuff is GONE!!!! Sell to the point the kids and your dog are concerned they are next :) I promise you, you WILL NOT miss your stuff!!! Over the years we have sold MANY things, and I can't think of one single item to date that I "miss."

Now, take a look at your bills. This is where is might get a little more personal. Do you really need that high dollar phone plan, top of the line cable, etc. Get rid of the bills you don't really "need." Turn your thermostat down/up. We save a fortune by adjusting our thermostats. I could write a book on ways to cut back. So, check out some great books on frugal living. Google for great ideas!!!  There are sooo many out there!!!

Give up personal pleasures for a short time ... the benefits WILL be worth it. Cut out the pedis, manis, hair color, expensive clothing, etc. Shop thrift stores, second-hand, etc. Pray that God will provide the things you "need." We currently have a list of needs that we keep and pray for. Could we go out and buy them, yes. But that is not a good financial choice for us. Sometimes God provides by a big sack of hand-me-downs. Sometimes its a refund check in the mail for the amount we needed for one of our needs. Just last month I accidently paid the cell phone bill twice which meant I didn't have to pay it this month, and we were able to pay for our boys to go to RA camp without breaking our budget.

This is a long list of sacrifices, but remember your "WHY." It is worth it!!! A short time of sacrifice for a lifetime of financial freedom. The more you sacrifice up front the shorter the time of sacrifice!! And honestly, most of the "sacrifices" you won't really miss. When we attended seminary the second time, we were flat out poor! We had four children living in a 856 sq foot house. Three of our kids were going through some tough medical issues. John worked a job that didn't pay beans, so he could focus on his schooling. Yet, the WHOLE time I was able to stay home. HOW?? Because we learned during that time what true life necessities were. Those have been life lessons that have carried through even till this day! I learned to live in such a frugal way that most days I still do the same things even though I don't necessarily "have" to anymore.

#3. After you have your rainy day fund, tackle that debt. There are MANY different philosophies as to which order you should pay off your debt. I think this is a personal choice. Some like the highest interest rates first. Some like paying off the smaller ones first to keep the momentum going! We chose to pay off our interest free loan first to free up a chunk of money faster. In the past year or so, we have paid off our van and sold our home! We chose to rent when we moved to GA. Not only was it easier, it will help us pay off our remaining debt by not having the expense of a home to maintain at this time.  GET MAD AT YOUR DEBT!!!  I am serious!!! Get mad at it, and it will motivate you to keep on keepin on!!!

#4. BE PATIENT! You did not get into debt overnight, so you wont pay it off overnight. But every little progress you make is one step closer to the ultimate goal. It took us about 1 1/2 years to pay off our van, and it will probably take a few more to pay off a few minor debts and our credit card which contains a mound of medical bills and some bad choices.  But in the end ... IT WILL BE WORTH IT!!!

#5. LIVE!!!! -- It will take a few more years to pay off our debt. Do you just stop "living" in the meantime?? Absolutely NOT!!!  Our kids are growing so fast and we want to treasure EVERY moment with them!!!  We still do things!!!  In fact, we are taking a mini-vacation for Thanksgiving. But we will do it as frugally as possible. John gets free hotel nights through his job, and we will pack and cook our own food (its healthier anyway). Usually we chose one night to go out to eat for a special treat (but you can bet I will have some sort-of coupon). Almost all the attractions we want to go and see I have been able to find discounts online. We also plan to go to Washington DC this summer, but we are saving NOW! We have a jar to drop spare change and dollars in. Again, it will be done as frugally as possible. Could we pay off our debt faster without doing things like this -- you bet!! But we chose to live (within reason) during this season!

Our why -- we believe in financial freedom. We do NOT believe that we are meant to live trapped in financial entanglements. We have a heart and a passion for missions. Knowing what we will be able to do once we are debt free is our "why." Not only have we learned how to live frugally, we have learned ways to keep the debt from EVER piling up again! Hopefully, we can inspire just one person to take that first step into a journey of financial freedom!!  We definitely do NOT have all the answers, but would love to discuss any of this further with anyone who needs encouragement to begin the journey!