"The rich rules over the poor, and the borrower is the slave of the lender." Proverbs 22:7
How many of you like the idea of being a slave? Yea, me either! So let's commit to freeing ourselves from debt (with the help of our gracious God of course)!
When I first got married, I had about $800-$900 in credit card debt. I know that doesn't sound like too much, but it would have continued to grow had my husband not CUT UP MY CREDIT CARDS! Yep, he literally took scissors and slicey diceyed them (even the J.Crew!) We were married in August, and because of his diligence, we had them paid off by Christmas. I was an angry angry elf at the time, but boy am I happy now!
So, my very first suggestion to you in getting out of debt is this:
CUT UP YOUR CREDIT CARDS! Seriously, chop chop. Keep one for emergencies, if need be.
Next, work on paying off the smallest card amount first, only paying the minimum on all others. Even if you feel like you're not making a dent, you are. Trust me.
If you have a bulk of money somewhere (we had an investment my grandparents had started for me when I was a wee little thing - I know, more fortunate circumstances), pay off fully what you can. For us, we were able to pay off one (out of the two) school loans we had - about $2000. That felt SO good! If you can do it, do it!
If you have a mortgage, pay attention!
Let's say you have $100,000 mortgage for a loan length of 30 years. Here is what you will save by plunking down an extra $100 a month:
Savings in interest: $62,463.88 (what could you do with an extra $62,000+ ?)
Savings in time: About 10 years (now you only pay for 20 years instead of 30!)
Payments eliminated: 118
If you want to calculate your mortgage specifically, and what you could pay extra (maybe it's only $20) click here to use a free mortgage pre-payment calculator (it's from Crown Financial).
Okay, I'm going to leave it at that tonight - you have something to work on! Besides, on Thursday (Mr. Linky - don't forget) you will get some great ideas from others on how to get out of debt! I can't wait to read them!
"Treasures gained by wickedness do not profit, but righteousness delivers from death. The Lord does not let the righteous go hungry, but he thwarts the craving of the wicked. A slack hand causes poverty, but the hand of the diligent makes rich. He who gathers in summer is a prudent son, but he who sleeps in harvest is a son who brings shame." Proverbs 10: 2-5
I really like the way The Message Bible paraphrases verses 4 and 5:
"Sloth makes you poor; diligence brings wealth. Make hay while the sun shines—that's smart; go fishing during harvest—that's stupid." Proverbs 10:4,5 (The Message)
7 comments:
We refinanced when the interested rates went way down a few years ago and by doing that we slashed $100,000 off of our total payout. We took a 15 year loan instead of a 30 and only had to pay an extra $90.00 a month. It was the smartest thing we ever did.
Great post Sarah!
Blessings to you.
Kim
You are doing such a good job with this series. I'm older than you
(45) so I will tell you that your decisions are good ones and will definitely be worth the effort!
When I was 27 or 28 my hubby wanted to put more in retirement and I thought he was crazy! We had a baby and were barely making it. This year he turned 50. When you turn 50 you can put in an extra $5,0000.00 in your 401K before taxes. When he said we were going to do that I cringed. However, since it happens before taxes we really don't notice.
Take advantage of all those little opportunities.
I love the name, by the way - perfect!
All great advice! We no longer carry credit card balances. We have 1 main card that we use when we need to and then pay it off at the end of the month. But it was not always that way - due to past home sale profits, we were able to pay off credit card debts and vehicles.
The next one to get rid of is our student loan. As far as mortgage, we do pay extra every month now. It will be nice to see down the road the difference it makes!
Great post! When we got married, I had $30K in cc debt. It took two years of diligently paying it off, then we were debt free (except for our house) for almost 7 years. Unfortunately, we tried letting me have a cc again about 3 years ago and learned I just can't handle it. So, by next summer, we will once again be debt free. And, since I no longer use cc, and it's cash only over here, we won't be making that mistake again. It feels good to be that close!
I also joined our marriage with a little debt. We used all (gulp) of our wedding money to pay off the credit cards. After that, we did the "debt snowball" as Dave Ramsey calls it, paying off our smallest debt and then rolling that money over to the next debt. It took less than 2 years to pay off credit cards, 2 cars, and our 2nd mortgage!!! It's amazing, and although I wasn't thrilled with the arrangement, I am so thankful that the Lord blessed me with a man who knows how to handle our money! Opposites do attract!
Great series. We have both taken the crown financial and being out of debt is a reward in itself. Jackie
my husband and i both had student loans coming into marriage and two car loans. we used larry burkett and had a decent budget, but we still had debt. our church went through dave's ramseys program (we didn't though since we had a good budget) but then my husband read through the book and noticed a few key differences. getting rid of the debt became more important. when my husband decided to put our kids' saving towards debt, it hurt, but he kindly explained that if he lost a job and we had debt that money would be gone in a heartbeat. so we put everything we could towards debt. thankfully the lord gave us a HUGE boost with my husband's old job situation (severence pay and such) and we now only have our mortgage. sometimes i forget we own our van and then i remember and i feel free all over again!
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