Positive Plan #2 is to reduce debt. Yes, I know, I know… we’re not getting a cost of living raise and everything (including interest rates) will probably increase – and I’m pretty sure they are getting ready to raise the rates soon. I’m very surprised they have not done it yet – but look out because I really think 2016 is the year they will hike them up.
Reducing debt is a matter of sacrifice – big time sacrifice. What can you live without in order to get it paid down? Each person would answer differently. It might be that $4 cup of fancy coffee in the morning or the $1 cup of soda from the fast food place. You know your lifestyle better than I do – so your answer will be based on your lifestyle.
Common sense and prayer go a long way – or so I’ve found that to be so. Here are a few steps that may help to at least organize your debt into the proper perspective as you tackle it.
- Make a list of every one of your credit cards. List them with the highest interest rate card at the top of the list, second highest under it and so forth.
- Write down the total of the minimum payments.
- Pray over the list. Ask God to help you use as much common sense as possible. Give the list to God. Call out to Him for direction. Debt is a weight – a very heavy weight that affects every aspect of your life. It takes money to live in this world and God wants to be involved in our spending habits and in paying off debt. He cares about the things that weigh His children down in life. If it is lack of money that weighs on you – if debt is robbing you of the joy that God wants you to have in your heart – you have to hand it over to Him. You need to pray over this list every day until your debt is paid off.
- As you are praying, ask God to impress upon you those areas in money management where you can possibly either do away with or significantly cut back. He will do that if you ask. Even if you can pay an extra $20 a month on the card with the highest interest rate – that adds up! Every little bit helps.
- As the payments come due, pay the minimum on the cards with the lowest interest rates. That first card on your list is the one you need to pay more than the minimum payment – it’s your goal to pay that one off first. That high interest rate is eating your lunch, so pay as much as possible on it.
- Continue doing this until the first card on the list is paid off. Once done, focus on doing the same with the second card on your list.
- This step may seem obvious, but once your debt begins to dwindle, don’t reapply for ANY credit cards! I know it’s a great temptation when money is tight to apply for credit, but try to resist the temptation to do that.
Here are a few more tips for getting debt paid down more quickly, but none of these are a slam dunk guarantee. You may want to:
- Call each credit card company and ask if your interest rate could be lowered. It sounds too good to be true, and I’m the first to admit it doesn’t always work, but the most they can say is NO. It’s been my experience in life that sometimes – they say YES. So… give it a try.
- On some credit cards they run special 0% offers. These are hard to come by in this economy and you have to be careful (read the fine print) because there are hidden fees that might outweigh the benefit.
- The balance transfer deal may not be the best way to go, but you could try to get the balance lowered from 25% APR to a card with 18% APR. Even with an 18% APR it’s going to take some time, effort and a great deal of personal sacrifice to get debt paid off, but isn’t it worth lowering that annual percentage rate?
Debt steals peace and joy! It haunts a person daily because it’s all-consuming all the time. You can’t buy that occasional latte from the coffee shop without feeling guilty. Let’s make a Positive Plan that is bathed in prayer. God can do what no man can do! I pray that 2016 is the year your financial joy is abundant. (y)