Refuse to accumulate more debt and eliminate current debt. The borrower is servant to the lender and thus God does not want His people to be in debt because it often causes people to make bad decisions and move away from God’s purpose for their lives and brings trouble upon them and their families. His desire is that you owe no man anything but love.
Refusing to live in a way that brings debt-freedom has brought great turmoil and upheaval in people’s lives via the enormous finance charges they incur as well as problems with repossession, foreclosure, and bankruptcy that millions of people deal with each year, some over and over because they never learn the lesson the LORD shared with them nor see that the bible never speaks positively with regard to borrowing money.
The debt snowball method (using all extra discretionary income after minimum payments are made to pay off the smallest debt first and afterward using all of it to pay off the next smallest debt) tends to be the best method because it is easier to chart debts and eliminate them and it gets you quick victories that positively affect your psyche and motivate you to continue to stick with the debt elimination plan. Also, it generally helps you eliminate total household debt within a few months of other methods that seem superior mathematically.
If you stick with them, other methods will work (like paying off the account that has the highest interest first, then moving to the next highest interest account) and on paper may work out better mathematically. However, they do not appear to have the same positive psychological and motivating effect in that a much higher percentage of people continue on to eliminate debt when the debt snowball method is used. Also, if you were a math genius, conceivably that would have already motivated you to stay out of consumer debt and/or get out of it quickly because you would recognize it greatly hampers your ability to properly manage your income and build wealth.
Refuse to cosign for the debts of other people. You will not help other people live in the responsibility God desires for them and you will bring financial trouble upon yourself by eventually being on the hook for paying the bills of irresponsible people. Bottom line is the debts are ultimately on your record when the people do not pay them and most don’t and it will severely crimp your life and likely put you in financial bondage.
Learn to tell family and friends NO to cosigning anything and simply give them a cash infusion toward worthwhile endeavors when you are in a debt-free and asset rich position where you can do so. You and they will be much better off in the long run as this approach teaches them to be financially responsible and disciplined. If they don’t learn the lesson, then you will not be drug down the hole with them when they become encumbered with debt they will not pay.
Please pray for this ministry and email me with any questions. May the LORD bless you richly as you follow His plan!
Deuteronomy 28:12, 15, 44, Proverbs 22:6-7, Romans 13:8, Proverbs 6:1-2, Proverbs 11:15, Proverbs 17:18
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