"Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law." (Romans 13:8)
1. Are you paying bills in no particular order? Housing should be the number one priority each and every month. After the mortgage or rent payment, vehicle, groceries, and utility bills should fall in line. Secured debts are obviously more important, since they can be taken away from you through foreclosure and repossession. Unsecured debts will need to be paid too, but the importance of food, shelter, clothing, and transportation always trump the credit cards. Make sure that you are paying the most important things first, so in case of a set-back you don't find yourself in a bad situation.
2. Have you been monitoring your credit reports? You should be checking your credit report at least once a year. Many have errors and you will be doing yourself a disservice by not pulling them frequently. They are crucial for obtaining better interest rates, landing a job, and stopping identity theft. Your credit score also determines how high your interest rates will be on loans, such as vehicles or home mortgages. You can receive a free credit report on-line at http://www.annualcreditreport.com. Keeping an eye on your credit report will keep your interest rates low, raise your credit score, and help you obtain credit in the future.
3. Do you have a budget in place? Many people feel that budgeting is just a waste of time, but in all actuality budgeting will show you exactly where your money is going and benefit you financially. It will stretch your dollars further and help you track your spending. Budgeting is a very useful tool that should be implemented in your home every month. You will be surprised by how much you spend and you will be even more surprised by how much you save if you set up a reasonable budget that the whole family can live within. If you decide not to budget it will be a waste of money, not time.
4. Have you prepared for an emergency? This fund is not really an option; an emergency is bound to happen sooner or later. If you are not prepared for it, you will only be digging deeper into the financial hole. You'd hate to have to pile on more charges to the credit card, especially when you can prepare in advance. Even it is just twenty dollars per pay cycle that you save, this will add up and save you big time when that time of emergency comes.
5. Are you charging your purchases instead of paying in cash/debit card? I have always said that credit cards equal convenience. It is a lot easier to throw the credit card down than it is to write out a check or count out your cash. This is definitely what the credit card companies want you to believe. How often do you use your credit card on those insignificant purchases when you could have just as easily used cash or even your debit card? This raises your balances and costs you more money in interest. Why not use cash, check, or a debit card and save yourself some money? Using this method of payment will not only save you money, but will help you live within your budget too. It may not be as convenient, but it sure is worth it.
Carrying debt is a headache at best and is certainly not the way you should be living. Though it is fairly common to obtain some kind of debt or another in your life, it is how you choose to handle your debt that will make a difference. There are a number of strategies to reducing debt and getting out of financial hardships.
Joe Larson is one of the certified
Christian credit counselors for Family Life Credit Services, a nationwide
Christian credit counseling agency since 1986. The goal of FLCS is to strengthen and encourage families and individuals through Christian faith-based financial counseling. They offer financial educational materials free of charge as well as the opportunity to work with a certified counselor in your area of need.
