Shortly after S and I were married, we were like many newlyweds.  I brought several thousand in debt to our marriage, we had a vehicle payment every month, we lived in a rented apartment, and with S’s financial background, although he had a good bit in savings, our mindset was more about “investments.”  About 2 years later, we attended a Crown Ministries financial class, where, for the first time, we saw God’s plan for our finances.  We realized that handling finances in a Biblical manner was completely different than what society and financial advisors recommended.  We were convicted, and used S’s savings to pay off all our debt.  We were totally debt free for several years.  I was also blessed to have a husband who taught me to live frugally. 

After becoming debt free, we followed Biblical advice to stay that way by continuing to ensure we saved a bit of money almost every month.  Although we certainly fall in the “middle class” realm–a family of 7, living on a single, active duty salary, we still managed to use good investment choices and savings to establish a decent nest egg.  As time went by, we decided to use some of our savings to invest in some land to be used when we retired.  As usual, God had other ideas, blessing us tremendously with Red Gate Farm–complete with house, barn, and land–and we didn’t have to take a mortgage to buy it.  All those years of saving truly paid off, and we got to see the reward first hand.  As time went on, we continued to live frugally, saving where we could, and then using the money as God called us to.  We were able to adopt 3 children without going into debt, and it was a wonderful feeling, knowing that by living Biblically, we were witnessing money being used to further God’s kingdom.  Because of our own experiences, we also became counselors ourselves, conducting Crown Ministries classes at our churches over the years, and being able to witness others’ lives transformed as they worked to get out of debt.

Then, last year, we moved out here.  You can go back through the blog to see details, but essentially, after much prayer, we felt at peace buying the place where we currently live.  There was just one caveat.  It meant we had to take a mortgage.  Although we spent almost every dime we had in savings, it wasn’t enough to cover the purchase price.  We took our first mortgage for the remainder, which was almost half of the cost (let’s just say we borrowed 6 figures).  As much as we didn’t want to do it, we felt it was acceptable in the circumstances we were in at the time.  So we went through the application and mortgage process, and boy, were we enlightened!  It didn’t take long at all to realize why the Bible counsels against debt!  Compared to the simplicity of buying Red Gate, this process was so frustrating, and there were times we truly felt as though we were “slave to the lender” (Proverbs 22:7).  

We did not take our debt lightly.  We could see the economy was volatile, and we knew we had to get out of debt as fast as possible.  So, even before we signed the first document, we had already mapped out a plan.  First, we agreed that our tithing and normal giving would not change.  Then, knowing that “life” happens, and unexpected costs come up, we calculated the maximum we could afford to pay every month, then added a few months for those unexpecteds.  Although we were comfortable, we definitely had to buckle down our monthly expenditures a lot.  I had to pay extra close attention to our monthly budget, and we sacrificed wherever we could.  At the same time, we were trying to build the place up for our animals.  As a result, we had a very limited budget for building projects each month, and recycled or bartered wherever we could.  As a result, most months, we were able to overpay on our mortgage by about 5x the monthly bill.  Our goal was to pay off by the end of summer of 2012, which gave us just over a year to pay off a 30-year ARM loan.  We were determined, and in times of frustration, discomfort, or discouragement, we turned to the the Bible’s wisdom and prayer for guidance.  Twice we were blessed with money we hadn’t calculated–one was a great adoption tax refund plus unexpected interest, and the other was S’s pilot bonus, which we had totally forgotten about.  Both of those incomes went straight to the mortgage company. 

I am thrilled to report that this week, we completely and entirely paid off our mortgage, just over 10 months after signing, and about 6 months earlier than we planned!  When I pulled up our online account today, it was such a feeling of jubilation to see the words “ACCOUNT CLOSED, PAID IN FULL.”  While we have no regrets about the choices we made, we have also vowed, God willing, to never go into debt again.

As a previous Crown Ministries counselor, I am well aware of the impact debt can have on individuals and families.  Thanks to our personal and counseling experiences, I would like to offer some tips we found useful to help others get out of debt….

  • Understand your TOTAL debt.  This includes family debts, mortgages, credit cards, student loans, car payments, etc.  If you owe money, it’s called debt.  You need to see the whole picture if you want any hope!
  • Don’t think in terms of “If only’s.”  One of the biggest frustrations that we had while we were working our tails off to pay off our mortgage was others who tended to have similiar debt who came up with all sorts of excuses.  “If only I made more money,” “If only I had less debt,” “If only I had a better job,” “If only I had savings to begin with,” “If only they didn’t charge so much interest,” and so on.  If you think in these terms, you will never get out of debt.  Instead, to be succesful, you MUST think in terms of, “What can I do today/this week/this month to find money to apply toward our debt?”  It must become a lifestyle of sorts to save rather then spend.
  • Don’t “save” extra money for a big payment months later.  Every cent you don’t pay off now, you are paying interest money on.  If you have $5 extra dollars to put toward your debt, pay it on your next bill!!  In the long run, it will save you much more than $5 in cumulative interest payments.  Have you ever done the math on interest?   If you took a $100,000 loan with 5% interest for 30 years, you wind up paying back $193,255.  That means you are paying the lender $93,255 to borrow $100,000!!  Think about it. 
  • Pay off your highest-interest debts first.  This usually means credit cards.  As you pay off one debt, apply the entire amount toward your second pay-off, then apply both those amounts to others.  For example, let’s say you have a $50 credit card payment each month at high interest, a $200 car payment at medium interest, and a $700 mortgage payment at low interest.  Put every extra dollar toward paying off the credit card first.  When that is done, apply the $50 that used to go to credit card toward your car payment, in addition to all the extra dollars.  Then, when that is paid off, apply the $50 credit card payment, the $200 car payment, and the extra cash toward the mortgage.  You are already using that much money to pay debt, so don’t start splurging until ALL debt is gone. 
  • It doesn’t matter how much money you make, or what your social class is.  If you can afford to eat out once a month, pay a cell phone bill, or buy a starbucks coffee, then you have extra cash to apply toward your debt.  Find areas where you can sacrifice, and DO IT!!  Follow through!! 
  • Stop blaming others.   Many people have a tendency to blame the lenders for increased interest rates, unexpected problems, etc., when, in fact, everything was in writing the day they signed.  If more borrowers accepted full responsibility for their debt, they would get out of it much faster, and with a lighter, happier heart attitude!
  • Sacrifice wherever possible.  You could lose the cell phone in order to apply the $100 cell phone bill toward your debt.  You can disconnect fancy extra phone and computer features.  You may be able to sell a vehicle.  You could lose the TV (GASP!!  Really, we did it years ago, and have never regretted it!!) and save the cable/satellite bill.  Find out how much you eat out and cut it in half, or better yet, eliminate it completely!  Learn to shop at yard sales and thrift stores (and feel good that you are recycling and protecting God’s creation as you do!). Learn to barter for goods and services when possible.  As you can see, these savings can add up VERY quickly.  We have counseled some whose best option was even to sell their home, rent for a few years, then have the financial freedom they could only dream of.  Home ownership is very expensive, despite what society tells you.  The more debt you have, the more sacrifice you should consider making. 
  • Continue to tithe first.  God always blesses those who freely give. 
  • Apply any and all extra money toward debt.  Tax refunds are not a good thing.  They are 0% interest loans to the government.  Additionally, it is frustrating as a counselor when we see a client receive a huge refund that could substantially reduce their debt, but they opt for some frivolous purchase instead.  Adjust your witholding to eliminate or significantly reduce your tax refund.  Apply the extra each month and you’ll rapidly cut down debt and save hundreds or thousands in interest.  If you end up with a refund, don’t be tempted to splurge.  Decide ahead of time that extra money will be applied toward debt. 
  • Set an end goal, and think up rewards to work towards.  Depending on how lengthy your time frame is, you may need small rewards along the way (like a dinner out).  At the end, consider both an immediate reward right after payoff (like a nice date night) and a large reward (which may involve saving all that debt payment money and apply toward something later).   For us, we promised the kids a big restaurant dinner, complete with appetizer and dessert shortly after payoff, and then we will save most of what we formerly applied to our mortgage so we can purchase a a truck and livestock trailer by next year–debt free. 
  • Use caution with credit cards, and pay it off EVERY SINGLE MONTH!!  If your budget doesn’t allow you to pay it off at the end of the month, DON’T BUY IT!!   
  • Once you are out of debt, keep saving and spending with cash!!!  Don’t allow yourself to see future debts and loans as an option.  Especially in our current failing economy, it is just too risky.  Take the mindset that if you can’t buy it with cash, you can’t buy it right now.

Understand that debt is not a sin in itself, but if you find yourself thinking and worrying about debt to the point that it takes your focus off Christ, that is when it becomes a sin.  God discusses wealth and money more than any other topic in the Bible, and for good reason.  Debt ruins lives.  So, rather than being a slave to a lender, financial freedom offers opportunitites that you might otherwise have never imagined.  There are opportunities for ministry, opportunities for fun and family adventures, opportunities to improve your lifestyle.  Just don’t allow yourself to rush it.  It can be overwhelming if you are looking at 10’s of thousands of dollars in debt, and even more so if you are looking at 100’s of thousands.  It doesn’t matter though.  Just take it one day at a time, set realistic goals, cut where you can, and make yourself do it.  It’s hard work, but the end is more rewarding than you could possibly imagine!!

As a side note, Crown Ministries is a nationwide program, and the counseling costs nothing.  Dave Ramsey’s “Financial Peace” program is also very good, though somewhat more secular.  These programs are designed to help you establish a plan and follow through.  If you are in a financial bind, I would be happy to help you find a counselor in your area, or even work with you myself if need be to get you going on a solid foundation.  You can e-mail me anytime at crmemory2 -at- yahoo -dot- com.  Just do it!!