DEFEATING THE DEBT DEMON (DOWNSIZE DEBT SECRET #5)

Defeating the debt demon is difficult for many families. Total household debt in the United States exceeds $16 trillion — and it’s increasing (fool.com). Car payments, student loans, credit card bills, and second mortgages are crushing American families.

Dreams are dashed. Futures are forfeited. Destinies are decimated.

Christians, despite our abundance of Biblical wisdom, rarely do better than those outside the Church. We should be leading the financial charge not playing catch up. Our families should be blessed beyond our wildest dreams (Ephesians 3:20-21).

Can we do it? Is it possible?

I have good news for you.

The debt demon can be defeated.

Financial freedom can be obtained.

The Power To Get Wealth

God has given us the power to get wealth (Deuteronomy 8:18, NASB). He went one step further and said He would teach us how to profit (Isaiah 48:17). Paul, in his letter to the church in Galatia indicated that we have the fruit of self-control (Galatians 5:22-23).

God is on our side.

Why Are You In Debt?

Going into debt is not a sin. Christians can and sometimes should borrow money. The Bible is open and honest about the negative effects of debt, though. The Bible discourages debt.

Why debt?

Debt is often the result of discontentment. Our human nature can be selfish and impatient. We want what we want and we want it now! Waiting is out of the question.

Too many Christians use debt to “prove” that they are financially blessed. They’re driving cars that they truly cannot afford, live in houses out of their income range, and go on unjustified vacations.

Debt Is A Decision

We don’t begin life in debt. Debt is a decision. We rarely believe that debt will end in bondage but it often does.

Discipleship involves denying ourselves and crucifying our desires (Luke 9:23). Telling ourselves “No!” and delaying gratification is a basic part of being a Christian.

When we buy things on credit we’re expressing discontentment with our lives. The Bible has a ton to say about being content. Contentment is such an important subject I wrote an entirely separate article on it. Click here for my article titled I Can Do All Things Through Christ.

Money is rarely the answer to our problems. Furthermore, “stuff” doesn’t generate joy.

There is always something to learn in the midst of financial frustration. Ask God to help you see what He’s teaching you at that moment.

Also, ask Him to help you learn the secret to contentment.

Request Forgiveness and Repent

Faithful stewardship is a big deal. Faith-based financial management is often treated as an optional endeavor. It’s not optional.

I Corinthians 4:2 Moreover, it is required of stewards that they be found faithful.

Debt caused by discontentment is an issue. Practicing retail therapy with God’s money is problematic. Carrying a credit card balance month to month is sloppy stewardship.

Every penny in our possession belongs to God. He allows us to earn, spend, save, invest, and give His money to the best of our abilities. Savvy stewards improve in each area. Sloppy stewards make excuses (Matthew 25:24).

Ask God to forgive you if you’ve been practicing sloppy stewardship. Repent for being unfaithful and learn savvy stewardship secrets and put them into practice.

Stop Digging Deeper Into Debt

Repentance is not a guilty feeling for getting caught doing something bad. When we repent we change directions. We stop doing the bad thing and start doing good things.

You must stop using debt if you’re serious about defeating the debt demon.

Full disclosure, I am not an anti-credit card type of guy. I fully believe that some adults can use credit cards responsibly. Here’s a previous article that I wrote about responsible credit card use.

However, if you’re mired in debt, putting your card on ice is probably a good idea. Stop using it even when you’re paying it off each month. Once you get a firm grasp on your debt situation then begin using it again.

If you’re in a hole and want to get out — stop digging.

Declaration of Debt Independence

The Founding Fathers of America signed the Declaration of Independence long before actually breaking free.

The Continental Congress adopted The Declaration of Independence on July 4, 1776. The members ratified the document by signature on August 2, 1776. The Treat of Paris, which ended the Revolutionary War, was not signed until September 3, 1783. Independence was declared seven years and three months before it was truly realized.

Benjamin Rush stated that most of his fellow signers believed that they had simply signed their own death warrants. It was a solemn time. Signing the Declaration of Independence was an act of high treason. It was also just the beginning.

High Treason Against the Spirit of Mammon

Declaring debt-free independence is similar. Everyone you know is mired in debt. Car loans and student loans are commonplace. Vacations are charged and paid for over many years.

You are committing high treason against the spirit of mammon. Plus you must fight daily until debt freedom is truly realized.

Are you ready to take the plunge?

I encourage you to write a Declaration of Debt-Free Independence when you’re truly serious. Committing your goal to paper dramatically increases your success rate.

Debt Snowball or Debt Avalanche

The debt snowball and debt avalanche are two popular debt destruction strategies.

Larry Burkett introduced the debt snowball to us many years ago. My wife and I used the debt snowball method to eradicate, what seemed like, an insurmountable pile of debt.

Debt Snowball

In the debt snowball method, debts are racked and stacked from smallest to largest. At least the minimum on each debt is paid each month. When the smallest is paid in full the monthly payment from that debt goes to the next one in line. This process continues until all of the debt is destroyed.

Debt Avalanche

Outstanding debts are racked and stacked by interest rate amounts in the debt avalanche. The highest interest rate is attacked first. When that one is paid the monthly amount is piled onto the next one in line. This process continues until the debt is fully demolished.

Is One Better?

Which strategy is best? The best one is the one that you will use.

The debt snowball method is more of an emotional strategy. Early wins are realized. Positive momentum is developed.

Proponents of the debt avalanche method tout the interest rate savings. However, the truth is that if we were so smart we wouldn’t have borrowed money at these rates at all.

Here’s a link to a debt calculator from NerdWallet. Plug in your debt info and you will see which method, debt snowball or debt avalanche, gets you out of debt quicker.

Pick one and get busy.

Defeat the Debt Demon — Get Started

The hardest part is getting started.

“The most difficult thing is the decision to act;

the rest is merely tenacity.”

Amelia Earhart

It might take you a few years to get the debt monkey off your back. Keep punching debt in the face every day. Stop using debt. Eventually, you will have defeated the debt demon.

It took George Washington and his friends seven years to earn freedom from England.

Don’t give up!

Practice Patience

Patience is the key to financial freedom for Christians. Patience is grit and tenacity. It’s the quality that doesn’t give up in the face of adversity.

You’re going to make some wrong turns in your effort to secure debt freedom. When you fall, just get back up again!

Micah 7:8 Rejoice not over me, O my enemy; when I fall, I shall rise; when I sit in darkness, the Lord will be a light to me.

Patience is huge. I’ve written a separate article about it being the key to financial freedom for Christians (click the link for access).

You can earn debt freedom. It’s possible to break free from the spirit of mammon.

The ball is in your court.

It won’t be easy but it will be worth it!

Pay Off Debt Before Investing?

People want to know if they should stop investing while getting out of debt. Only stop investing if you’re unable to make at least your minimum payments.

If your employer is offering a match to your 401(k) you must do everything in your power to get the full match. It’s free money and the return is often 50% — 100%.

Take their money!

I recommend this strategy: Create the snowball and start making payments. Contribute enough to get the full company match. Put extra cash, after the contributions, towards the snowball.

You will never recover lost time or free money.

Savvy Stewardship Academy

Downsizing debt is a key component of our future course, Savvy Stewardship Academy. Faithful stewardship is more than giving money. Each of these components is broken down into bite-sized chunks in Savvy Stewardship Academy.

Sign up below to be the first to know when the course launches.

It’s going to be revolutionary!