The Bible tells us the borrower is the lender’s servant. How true. Getting in debt is easy: merchants want to move inventory, set a trap (buy one get one free), you bite, and voilà!, the debt journey starts. Getting out of debt is another matter. It’s slow, frustrating, and can be painful. However, a few ABCs and 123s of getting out of debt applied consistently will work.
If folks focussed on the ABCs of getting out of debt: attitudes, behaviors, and choices, instead of credit scores, refinancing, and other money related activities, they would find the getting out of debt procedure highly targeted, and less frustrating. Without attitude changes while in debt, you will meander as you try to fix your credit score and debt payments; merely reinforcing Einstein’s comments: Insanity is doing the same thing over and over again and expecting different results.
Let’s look more closely at the ABCs and 123s.
Your attitude is your worldview.
Your attitude is what you believe; its what you think. It decides how you will behave. It determines how you will choose. For example, if you believe a credit card is a funding source, you won’t have a problem carrying a monthly balance. With the opposite view you will pay monthly balances fully.
Ideally, before you are in debt you should understand your beliefs about money. What are they? From where did you get them? From the TV? By observing parents? Parents teach children to save, sometimes to give, but seldom how to spend. Teaching children and others how to save and give without training them thoroughly on how to spend is fruitless.
The basic attitude to convey to our children, ourselves, and which folks should take to the getting out of debt journey is nobody can manage money — it’s not manageable. We mange ourselves … our greed, wants, needs. We decide to spend, usually prompted by a merchant. After this fundamental understanding, apply these 123s to getting out of debt.
1. Ensure you have the right attitude to savings, bulk buying, and using coupons. You don’t save when you spend, use coupons, buy in bulk. You spend less, but that’s not saving. An item listed at $100 marked down to $50 does not cause you to save $50. You spend $50. Similarly buying in bulk and using coupons could mean you spend more unless the need preceded the decision to buy bulk or use coupons.
2. Examine your beliefs about debt and credit card use. An increasing number of people see debt as normal and inevitable. If that’s your view you will stay in debt for a long time. Alternatively, if you believe the best debt is no debt, you will approach the get out of deft path differently. As well, if you see a credit card as a debt source, this too, will cause you to stay in debt. If you are in debt you should stop using your credit card; research shows consistently that you spend more using a credit card than not using one.
3. Examine your thinking about bankruptcy. You got into debt voluntarily; even if coerced by the merchant it was your decision. Do not walk away. For the follower of Jesus the Bible is clear: if you borrow you must repay, Psalm 37:21. Never allow the seemingly impossible to cause you to do the wrong thing. There is a way out: it might take years, but there is a way out. Meanwhile, let’s understand that there are consequences to our decisions.
Your behaviour flows from your attitude.
1. Work with a life-stage appropriate budget. If you don’t work with a realistic budget where you spend less than your income consistently, you will remain in debt. You are where you are; don’t blame; live there as you move out of debt.
2. Work with a realistic debt repayment schedule in which repayment amounts fit your budget. As you prepare this schedule and the budget, speak with your creditors honestly and humbly to see how they might help by reducing interest and other payments.
3. Seek extra income only if you are confident you have examined your attitude to money and are implementing changes. Otherwise, more money merely defers your reverting to where you are today … possibly becoming worse off.
Your choices flow from your attitude.
1. Choose to live debt free as of today. That’s a decision. Agree as of today you will take on no more debt. You will do without stuff. This calls for patience and humility.
2. Choose to follow a spending decision procedure similar to the Affordability Index. As well, never shop without a list.
3. Accept it’s your choices that will lead you out of debt. Even so, these choices likely will lower your standard of living. Therefore, today you might not appear to be the person whom others thought you were because you are now living inside your income.