“The rich rules over the poor, and the borrower is servant to the lender.” Proverbs 22:7 NKJV
Anytime someone hears the word budget they automatically assume that the person is struggling financially or that they are BROKE. Not always the case. According to a Gallup poll, only 1/3 of Americans have a household budget yet 80% of Americans are DROWNING in debt.
In 2015, my husband and I looked at our finances and determined we wanted to leave a legacy of financial freedom to our children. We made up in our minds that we no longer wanted debt to have a lifelong grip on us so tight that we could not enjoy life. After a friend introduced me to Dave Ramsey, my husband and I decided to embark on this journey to financial freedom and peace. I would highly recommend everyone to take his Financial Peace course to learn the ins & outs to financial freedom.
As consumers, I don’t know what it is about having the latest and greatest but that is the mentality that often puts us deep into debt. And with the world of entertainment, keeping up with the Jones’s and blowing money faster than we can make it, our income spirals out of control to the sunken place, a point of no return.
Well don’t ever think that there is a point of no return because there is a solution for the problem. Let me say this as well. You may not be the person who lives in “the sunken place”. You may be reading this and saying to yourself, “I have money in the bank and I pay my bills on time and I get to live life to the fullest.” Great. Round of applause. Read the list below and if you have any of the items listed, you’re in debt.
- Credit Cards
- Loans (student loans, auto loans, furniture, pay day loans, etc.)
- Mortgage and/or Home Equity Loan
- Hospital Bills
- Collection Notices
- Department Store Charge Cards
- Personal Bank Loan
- 401K, Retirement, 403b Loan
- Business Loan
- Do You Owe Someone? Ok, you get the point
Don’t be fooled into thinking that just because life is fine, you’re ok. That mentality will keep us all a slave to the financial system. So here is what I find that works for our household- a monthly budget. Now you can google budget forms and you will get soooo many hits and links. Here are some quick steps to get your money designated for specific areas of spending AND doing so will help you find ways to eliminate your debt faster.
1. List all of your debts, smallest to largest. Once you pay off a debt, roll that amount into the next debt. This is called the SNOWBALL effect. Read about it here.
2. Obtain a credit report to make sure you have not been a victim of fraud and to make sure you have accounted for ALL of your debts.
3. List all of your household expenses- charities (tithes, charitable giving), mortgage/rent, utilities, groceries, entertainment, clothing, gas, auto repairs, health & medical (i.e medicines, doctor appointments, etc.), outside insurance policies, personal care (i.e toiletries, baby supplies, tutoring/music lessons, child care/babysitters, organizational dues), and debts you pay.
4. List your take home pay and subtract it from ALL of your expenses. If the number is positive you have money left to start paying off some debt FASTER. If the number is negative, you will need to look at what you can eliminate from your expenses to ensure that you are not living above your means.
Repeat steps 3 and 4 each month and have a household budget meeting. Make a vision board and take control of your financial life. After all, God wants us to be lenders and not borrowers. He wants us to prosper in all areas of life. Finally, DON’T LET ANYONE make you believe that because you are budgeting your way to financial freedom, you are broke and busted. Start the journey and keep going if you’ve already started.
There are a thousand ways to get out of debt and to budget your household. What are some ways you budget? What are some resources you recommend? Share your strategies and share this with someone.
It’s a FAITH journey y’all! No matter where you are in life, you gotta have faith!
P.S. I do not get paid to promote Dave Ramsey’s products. I’m on the journey to financial freedom and peace. As of today, I’ve stopped using all my credit cards, paid them off, and will be tackling the remainder of my car loan and the BIG student loan. I’ll keep you posted! 😉
#winning #debtfree #onefaithjourney #financialpeace