2005-03-19- Become Debt-Free
Nine Steps to Financial Freedom, Part 2
Originally Published 2003-05-28
We are continuing in our series of the Nine Steps to Financial Freedom, to
answer the questions: How can we achieve financial freedom? What must we
do according to God's plan?
In Step 1, we learned the first thing that we must do is as Christians is
we need to Transfer Ownership of every possession to God.
Step 2: Become Debt-Free
Before I continue I need to tell you that this step is so long, please bear
with me. Thanks! Also I feel I need to clarify the difference between
Financial Freedom and Becoming Debt-Free. Becoming
Debt-Free means to get out of all debt, or to get out of bondage. When
you are in debt, you are in bondage to creditors. Financial Freedom
means to live in the freedom of Gods provision.
A Christian must get out of debt altogether. Let me define scriptural debt.
Debt exists with any of the following conditions:
Payment is past due for money, goods or services that are owed to other people.
The total value of unsecured liabilities exceeds total assets. In other words,
if you had to cash out at any time, there would be a negative balance in
The familys basic needs are not being met, producing anxiety in the
area of financial responsibility.
It should be noted that debt in itself is not necessarily bad. Some debt
may be incurred from buying a house or car on an installment loan. This debt
is not bad, if the purchaser uses wisdom in making such purchases and is
able to make the payments, after tithing, responsibly paying all other
bills or debt, and is still meeting their basic essential needs.
So within Step 2, I will present four steps to becoming debt-free.
Have a Written Plan.
If we have food and covering, with these shall
we be content. " (1 Timothy 6:8)
Your adornment must not be merely external - braiding
the hair, and wearing gold jewelry, or putting on dresses; but let it be
the hidden person of the heart, with the imperishable quality of a gentle
and quiet spirit, which is precious in the sight of God. (1 Peter
Do not love the world or the things in the world.
If anyone loves the world, the love of the Father is not in him. For all
that is in the world, the lust of flesh and the lust of the eyes and the
boastful pride of life, is not from the Father, but is from the world.
(1 John 2:15-16)
Determine Essentials for Living
A Christian in debt must stop any expenditure that is not absolutely essential
for living. (See Proverbs 21:17). Look for services around the home that
can be done without outside cost. Also begin to develop some home skills.
By utilizing individual skills, you can begin to reduce some of the expenditures
that are not really essential.
What Im expressing is an attitude of conservation and gratitude. Begin
cooking hamburgers at home, instead of eating fast foods out all of the time.
Be thankful for Gods provisions, and ask Him to give you the skills
to use them wisely.
Christians who are in bondage must begin to assess what things they can do
for themselves and stop frivolous use of finances. Once a Christian has begun
to do these things, whether in debt or not, it will become fun and will help
stabilize family life.
Think Before Buying.
A Christian who is in debt (and even those who are not) should think before
every purchase. (See Proverbs 24:3). Every purchase should be evaluated.
Is it a necessity? Have I assessed whether it is a need, a want or a desire?
Where is its priority in reference to my needs, wants, or desires?
Does the purchase reflect my Christian ethics? (For example, Playboy
does not reflect Christian ethics.) Can I continue to subscribe to magazines
or belong to book, CD, or movie clubs where I owe others?
Is this the best possible buy I can get, or am I purchasing only because
I have this credit card?
Does it require costly upkeep? Example: an inkjet printer that costs $100.00
and the ink cartridges cost $45 dollars a piece. After purchasing 3 ink
cartridges, you have well paid for another inkjet printer. Look at the cost
of inkjet cartridges; find the three lowest priced cartridges, then see which
printers they fit. Finally examine those printers for purchase.
Discontinue Credit Buying
A Christian in debt should also begin buying on a cash-only basis. One suggestion
is to obtain a debit card from your bank or credit union, and cut up your
credit card. If possible, get your required expenditures for need to come
due just after you receive your paycheck, and pay them immediately. Then
use what money you have left over with much wisdom. Make a lifestyle change
in the use of your finances.
The principle to observe is this: If you are in debt from the misuse or even
an emergency use of credit, stop - totally stop using it. Cut up the cards
and mail them back to their respective companies, and ask them not to send
you any more. Include in your letter the plan for paying that credit card
debt, and then commit yourself to buying solely on a cash basis. And pay
off the creditor. When someone has overextended his or her finances, it is
necessary to sacrifice some of the wants and desires in life to get current;
otherwise, that person will continue to borrow and will remain in bondage.
Avoid signing contracts for personal services.
Dont sign yourself into bondage. Never co-sign on a credit card or
loan for anyone. If that person defaults on the debt they incurred, the creditor
will come after you to pay it, and you will be responsible.
Also dont sign yourself into a contract for services that requires
you to be in debt whether you are able to use a service or not, due to illness
or default. A friend of mine signed herself into a two-year contract with
a fitness center, and she became ill. She was unable to use the service,
and was unable to make a payment while she was in the hospital. Because she
missed the payment, she defaulted on the contract and lost her access to
the fitness center, but was still obligated to pay the finance company for
the services she could no longer receive.
A Christian should practice saving money on a regular basis. This includes
those who are in debt. Even if its only $5 a month, develop a discipline
This does not mean to store up a large amount of money while failing to pay
your creditors, but one of the best habits a Christian can develop is to
save a small amount on a regular basis. There is
a precious treasure and oil in the dwelling of the wise, but the foolish
man swallows it up. (Proverbs 21:20) The common scriptural attitude
presented in the Bible is to save on a regular basis, and it is important
that Christians develop good habits to replace bad habits.
There is no other alternative under Gods plan for becoming debt-free.
Lord Jesus, help me to be a wise and humble steward
of the property you have entrusted me to invest, according to your precious
and holy name Jesus, Amen
I want my life to be for the glory of God