Biblical Answer

If you're drowning in debt and have no idea how to get out, here are some steps you can take to begin your journey towards financial freedom.

Understanding Debt and Budgeting

First and foremost, it's essential to understand the nature of debt and how to manage your finances effectively. As Larry Burkett notes, the scriptural definition of debt is the inability to meet obligations agreed upon. This means that debt is not inherently wrong, but rather, it's the inability to pay back what you owe that's the problem. To get out of debt, you need to create a budget that accounts for all your income and expenses. This will help you identify areas where you can cut back and allocate your resources more efficiently. You can use the 50/30/20 rule as a guideline, where 50% of your income goes towards necessities like rent and utilities, 30% towards discretionary spending, and 20% towards saving and debt repayment.

Managing Credit and Debit Cards

Credit and debit cards can be a significant source of debt if not used wisely. It's essential to understand the terms and conditions of your credit cards, including interest rates and fees. You should also avoid using credit cards for discretionary spending, as this can lead to a cycle of debt. Instead, use cash or debit cards for non-essential purchases. When it comes to credit cards, consider using a debt snowball approach, where you pay off the card with the smallest balance first, while making minimum payments on the other cards. This will help you gain momentum and confidence as you work towards becoming debt-free.

Paying Bills on Time and Seeking Help

Paying bills on time is crucial to avoiding late fees and penalties. Make a habit of paying your bills as soon as they're due, and consider setting up automatic payments to ensure you never miss a payment. If you're struggling to make ends meet, don't be afraid to seek help from a financial advisor or credit counselor. They can provide you with personalized guidance and support to help you create a plan to get out of debt. Remember, getting out of debt takes time and discipline, but with the right mindset and support, you can achieve financial freedom and live a more peaceful and secure life.