Saturday, August 19, 2006

Five First Steps to Debt Free

1. Realize that being in debt is a bad thing. It's sort of like the AA 12 step program... admitting you have a problem is the very first step. My husband and I were discussing debt and why we want to get of of it with our 8yo daughter last weekend. I was so impressed with my husband.. he told her.. "Taking on Debt is like stealing from your future self". A profound thought, to be sure. And it's true, also. Getting out of Debt, and living without Debt is the very best step to being free.
Debt is a bad thing.. realize it, accept it, and do something about it.

2. Honestly access your debt. Include such things as... not saving any money for short and long term goals. A lack of savings translates into a debt to YOURSELF. It's bad enough to owe other people money.. but living at the extreme edge or beyond of our income creates a debt to our future self as well. List every creditor, list every major "undone" savings goals... and be honest about it.

3. This probably should have gone first.. but I believe that seeking God's help is a major part of becoming Debt free. It seems obvious from the Bible that God disapproves of debt.. because it puts people into servitude.. and that's a bad thing. Asking God to deliver us from debt and to help us gain personal discipline and good stewardship goals.. it's all part of the process.

4. Honestly access your income and resources.. not forgetting such things as free time, talents, training etc that could translate into more income. In order to become debt free... you need to have income, and you'll need to WORK hard at it. In my case.. I'm a SAHM of five children.. there's not a whole lot of free time to be had. However.. I do have some options, and I'll be getting into exactly what we are doing a little later. This is just the first five things to do.. and it all starts with being honest.. to ourselves and to God about where we really are.

5. Start the process of eliminating expenses. Identify extraneous expense. Eliminate Extraneous Expense. Create both income and debt reduction in one fell swoop. Eliminating expense is a double whammy.. and should be the very first practical step towards becoming debt free. It's the first step to self discipline, the first step to good stewardship, and will provide great satisfaction when you have tangible proof that your efforts are working.

Next.. I'll be posting about specific expenses we're eliminating, additional sources of income we've found, and lots of frugal tips to help with all five "first steps" of the Get Out Of Debt - Be Free life.

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