Debt is a thief. It steals from your future. Debt is consuming tomorrow’s income today. It is not an exaggeration to suggest that debt is destroying the economies of the Western World with unprecedented debt levels amongst households and Governments. Just in the United States alone, the total debt exceeds $60 trillion, of which $18 trillion alone is owed by the Federal Government, which works out at over $150,000 per taxpayer. The interest bill alone is over $242 billion per annum, and that is with interest rates sitting at record lows!
How will it ever be repaid? Answer: It wont!
Here is a bit of home truth about debt in today’s society:
“Consumption in today’s society consists of people buying things they don’t need, with money they don’t have, to impress people they don’t like”.
Clive Hamilton, Author – Affluenza
Funny quote, but depressingly true too! Sadly so many families, businesses and Governments have fallen for the world’s lie, that debt is necessary in order to maintain a certain standard of living.
The Bible provides ample warning about this, consider:
“The rich rules over the poor, and the borrower becomes the lender’s slave.”
Given the elevated nature of the debt levels in the world and the flow on impact this has into local economies, their growth levels and employment levels, it is sensible that Christians evaluate their own levels of debt, their attitudes towards it and consider the potential impact that both their own debts and debts of their Government will have on them and their families.
- Do I really need this debt? or the asset that it allows me to own?
- Can I realistically repay it within a reasonable timeframe?
- What motivated me to get into debt? Did I do it for sensible reasons?
- How is it impacting my relationships?
- Have you fallen for the lie that debt is both normal and necessary in order to get ahead?
Become a Debt Destroyer
Here are the sure ways to get out of debt fast:
- Make a list of all your debts
- Put them in order from highest interest rate at the top, to the lowest interest rate at the bottom. Then put them in size order with the smallest (but highest rate) at the top, and then largest (but lowest rate) at the bottom). For example:
|Interest Rate||Amount Owed|
|Credit Card 1||18%||$2,000|
|Credit Card 2||18%||$5,000|
- Pay off the smallest debts with the highest rate first (most likely a credit card) and work your way down.
- Celebrate each debt that has been paid off! Ideally not by spending more on your credit card!
- Do a Budget and use it to determine:
- What areas are wasteful and can be cut out
- What additional repayments you can make against your debts
- Switch from a credit card to a debit card, so you only spending money that you have actually saved!
- Commit to not borrowing again! Save 10% of your net monthly income and put it to work so compound interest can do the heavy lifting.