Chapter 4: Getting Out of Debt: An Emergency Crash Course

Debt years are depressing years. You want to travel to educate your children, but you can’t. You want to send your friend something special to encourage her, but you can’t. You want to buy something nice for your spouse, but you can’t. Your family desperately needs to purchase a functional appliance, but you can’t. The list of financial can’ts reaches into every part of your day-to-day existence, it seems. Family arguments result from the financial strain.

Life is too short and too precious to grind under the financial and mental burden of debt for years on end. But it will take drastic action for you to get out.

Buy nothing more on credit. Budget payments to pay off all your previous debts. Yet, this alone may not be enough if you are heavily in debt. For example, while you might repay $100 or more a month, on debts now totaling $5,000 that wouldn’t get you out of debt for a decade!

To really make headway in getting out of debt, you must cut your standard of living to “state of emergency” levels. By switching to emergency mode, you can be debt-free (excluding mortgage debt) in perhaps less than two years.

Emergency Mode

Scrutinize your expenses. Look for ways to make emergency cuts in spending in order to live far below your present income. Decide what you can cut out entirely. Really sacrifice! The more you sacrifice now, the sooner you will be out of debt.

Consider your vehicle first. Ask yourself if you could possibly get along without it. A car can cost you as much as it costs to support another member of the family. So it might be a good idea to get rid of your car altogether if possible. Perhaps it may be less expensive to carpool to work. Maybe you could even walk or ride a bus or bicycle. The money you receive for your car—plus the amount you save from insurance, gasoline, licensing and maintenance—will go a long way to help you get out of debt a lot sooner.

At the very least, if you drive an expensive car, consider selling it to get something more modest. And if you drive your vehicle “into the ground,” instead of trading it in every few years, you will save yourself thousands more.

Remember, you are in debt! This is an emergency!

You might also be able to move to an area closer to your job and/or near a store to which you could walk to shop. You could conceivably cut your rent hundreds of dollars per month by renting a less expensive house. Paint and elbow grease are not very expensive. Dirty, dingy rooms can be made very livable and attractive with a little cleaning, paint and inexpensive curtains.

Pets are another area where some people spend thousands of dollars per year. Yes, they may be cute and cuddly, but they aren’t people, after all. If you can find them a loving home, maybe it is time to let someone else enjoy them so you can work your way out of financial crisis.

Now consider your food bill. Do not skimp on your health. Doing that would cost you more—in more ways than one—later on. However, while you must provide for adequate nutrition, you can accomplish it using much less money than you think. Eliminate all food expenditures not essential to maintaining good health. Go back and review the food-budgeting tips in Chapter Three.

And if you are in dire straits, the government offers food stamp programs and other assistance. If there is a need, take advantage—that is what the programs are there for.

Recreation expenses can temporarily be cut too. A family dinner at a restaurant can become a family picnic at a nearby park. A trip to a major-league ballpark can become a nine-inning nail-biter at the local high school field. An excursion to the movies can become games at home and family conversation—far cheaper and far better for you spiritually.

Don’t give up after a month or two. Set your will. Determine to stick with it. Seeing your debts melt away month by month will be worth the effort and sacrifice!

The Bible says if you faint in the day of adversity, your strength is small (Proverbs 24:10). Be strong. Finish the course. Oftentimes people quit when just a few more steps would reveal rays of light on the horizon. Saving money and reducing debt can seem overwhelming. Do not give in. Hebrews 12:1 tells us to run our spiritual race with patience, and smartly—casting off those things that impede our progress. The same principle applies in our financial “race.”

Seek God’s guidance. See your employer. See your creditor. Talk your situation over with them. Don’t sit at home and say, “It’s no use!” Don’t procrastinate. Keep thinking. Keep planning. Keep working.

It will take some austere living to get completely out of debt, but rejoice in the progress you make. Don’t fix your attention on the long way to go, but on how far you have come—and on the value of reaching the ultimate goal!

Technically, to get the most bang for your buck, pay off the debt with the highest interest rate first, while maintaining minimum payments on all your other debt. But if you need a psychological boost, consider the snowball method. Begin by paying off the loan that has the smallest principal. Once that debt is paid off, use the money you were putting toward that debt to help pay off your next smallest debt. Whichever method you choose, keep moving forward!

Get Drastic—Don’t Get Stupid

When you are in debt, the allure of certain promising investments can be strong. Be very careful! “[E]veryone who is hasty comes surely to poverty” (Proverbs 21:5; New American Standard). Money does not come easily, so don’t be tricked into carelessly throwing it away. Read Psalm 37:7. Don’t waste hard-earned dollars on gambling, lotteries or get-rich-quick schemes.

Keep your integrity and honesty. Follow the law and stay away from unethical businesses and practices (Proverbs 22:16; 28:6; Romans 13:1, 7). “A faithful man shall abound with blessings: but he that maketh haste to be rich shall not be innocent. … He that hasteth to be rich hath an evil eye, and considereth not that poverty shall come upon him” (Proverbs 28:20, 22). Faithfully stick to the plan of reducing debt and increasing savings until you have enough to meet your needs, emergencies, and then wants.

The way to prosper is to work diligently, plan ahead, invest wisely—not follow some wild idea, no matter how easy it may sound. Many men have gone broke, ruined their health and brought needless hardship and sorrow upon their families trying to get rich quickly.

“Are you willing to get another job and work a few 80-hour weeks?” asks well-known debt consultant Dave Ramsey. “If you are in financial stress because of something you’ve done, you need to get yourself out of the mess by working. If you think that it is too hard, you will never get out of the debt that you brought upon yourself. Laziness … will get you absolutely nowhere in life. We all make mistakes, but the question is whether you are willing to take responsibility for your mistakes! You need to learn from your mistakes or you—and your children—will be doomed to repeat the cycle.”

The question you need to ask yourself, says Ramsey, is this: “How badly do you want to be out of debt?”

Remember: God wants you to prosper. He wants you to be able to live the debt-free way of life and experience the blessings that come as a result of obeying His financial laws. So keep working, get creative in finding ways to save money, and persevere through the drastic action and emergency cuts you have decided to take.