“A 4-Step Process of Getting Out of Debt” (Bountiful S4E2)

August 13, 2018

Bountiful Season 4, Episode 2 for Monday, August 13, 2018

Getting into debt is much easier than getting out of debt. Debt isn’t sinful, but it does have an impact on our spiritual, as well as our financial, lives. So, if you’re in financial straits because of debt or if you just want to take a big chunk out of it, Gary & Christy talk about a 4-step process to help you get out of debt.

1. List all your debts. Include principal balances, monthly due dates, interest rates, and maturity dates.

2. Develop a spending plan. Make a list of all your income as well as all your expenses. What flexibility do you have? Can you earn more money or cut expenses in order to have more to pay off your debts?

3. Choose your debt payment strategy. This includes developing a goal (see format below). Two common approaches for tackling debt are the Snowball Method and the Avalanche Method.

4. Commit & Execute. At this point, after everything is laid out and ready to go, there’s nothing to it but to do it. It may be a difficult journey, so set milestones to remind you where you came from and why you’re dedicated to paying your debts.

A format for you goal of reducing debt can be: I owe $___ in credit card debt, $___ in student loan debt, $____ in auto debt, and $____ in mortgage debt by __/__/__.

Links

https://www.moneytalksnews.com/stressing-over-money-heres-how-to-stop/?utm_source=newsletter&utm_campaign=email-2018-07-08-am&utm_medium=email&subscriber=yes
https://www.moneytalksnews.com/8-smart-ways-pay-off-debt-fast/
- Stop using credit cards
- After establishing an emergency fund (which will stave off future money needs) pay down as much debt as possible each month (i.e. more than the minimum payment at minimum!)
- Cut spending – buy only needs and do not buy wants. This won’t be sustainable, but it doesn’t have to be. After the debt is paid, spending can go up a little bit to a sustainable (and affordable!) level.
- After one debt is paid, apply the money used to pay that down toward the remaining debt.
- Utilize windfalls to pay debt. This is a blessing from the Lord to help you get out of your financial pit.
https://www.debt.org/blog/10-mistakes-getting-out-of-debt/
https://www.nerdwallet.com/blog/finance/7-tips-for-paying-off-debt-from-people-who-did-it/
- 1. Make the most of every dollar
- 2. Work some side hustles
- 3. Align your spending and values
- 4. Use the power of extra payments
- 5. Rely on yourself
- 6. Consider consolidation
- 7. Know your ‘why’
https://www.biblemoneymatters.com/getting-out-of-debt-top-strategies-programs-and-ideas-to-help-you-get-back-in-the-black/
https://www.nerdwallet.com/blog/average-credit-card-debt-household/

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