That’s the average amount of student loan debt the class of 2014 had by the time they received their undergraduate diploma.
Throw on top of that post-graduate studies, credit card debt, car payments, house payments, etc.—It’s so easy to see how America has become a nation that’s swimming in an ocean of debt.
Proverbs 22:7 lets us know that the rich rule over the poor and that the borrower is the slave of the lender.
For far too many people in today’s culture, freedom from slavery to debt seems almost like a far and distant fantasy.
Well I’ve got great news!!
Financial freedom is NOT a fantasy!
Every single year, there are more and more individuals who are refusing to live their life buried under a pile of debt and are deciding to do something about it.
To help you live a life that’s full of the joys that come with financial freedom, here’s
How To Dig Yourself Out of Debt (And Deal With It Once And For All).
1. Stop Digging The Hole. The first key is simple. Stop digging yourself further in the hole!
You will never get out of debt if you refuse to take your foot off of the shovel that created the hole to begin with.
Financial freedom begins with making a decision not to take on additional debt until you’ve reached your intended destination.
2. Do You Have A Safety Net? We all know how dangerous it would be to walk across a high-rise tightrope without a safety net. Well, living your life day to day without some type of emergency fund is like taking that walk personally without the security of a financial safety net.
As a Christian, I believe that the first financial obligation we all have is to tithe 10% of our income back to God. Immediately following that, I believe that creating room for the unexpected should be the second highest financial priority.
Usually, $1,000 is a recommended emergency fund amount given by financial experts. By establishing this fund up front, you’re more likely to avoid digging yourself further into debt in the event of an unexpected repair or bill down the road.
3. Seek help. As you begin the process of debt cancelation, start your journey off right and seek advice to point you in the right direction.
There’s lots of FREE information online that can help you avoid common mistakes and can give you tips to help you achieve results faster.
Research how to create a personal spending plan that you can realistically stick with.
Read good books on money and finance.
Down the road, you may even decide to bring someone in to help you one-on-one to further accelerate your progress.
Proverbs 27:23 says that we must be diligent to know the state of our flocks.
Seeking help from others more knowledgeable than we are helps us to do just that.
4. Determine your debt cancellation approach. There’s the debt snowball approach (paying the smallest debt amount first and using the savings once it’s paid off to put on the next largest amount).
Then there’s the “avalanche” approach (paying off the debt that has the highest interest rate).
Whatever the approach you decide to pursue, just be sure that you’re intentional and monitor your progress along the way. FYI: In my own past experience, I usually try to pay down the debt with the highest interest rate first to help create savings that I can use to help me to get results faster.
5. Improve your credit. People with great credit pay less in interest. Plain & simple! (Click here to check out a previous post I wrote to help you both know and improve your credit score).
6. Automate your debt payments. I’m a big fan of automation. It takes a good amount of discipline to get out of debt and automating your debt cancellation payments takes advantage of the discipline technology forces us to have. Some lenders will even offer you lower interest rates if you do!
7. Delay pleasure. I so wish that this step were something that we could all skip on our journey to financial freedom. The reality, however, is that getting out of debt will require both personal discipline AND some form of delayed gratification. And what is specifically delayed will be totally different given each individual and their unique situation.
For some, the delayed pleasure will be cutting off their cable for a year to read more in the evenings. For others, it will be cooking more at home to avoid eating out as much.
Whatever’s standing in the way of your progress, look for ways to delay or eliminate it to create momentum and achieve success.
8. Give to the poor. Proverbs 28:27 says that whoever gives to the poor will lack nothing, but he who shuts his eyes to poverty will be cursed.
If you want to meet a need in your own life, help others who also find themselves in need. Giving to the poor is like throwing a boomerang. Once you throw it out away from you, it turns back around and heads back in your direction.
You can and will experience financial freedom!!
And getting out of debt won’t require you to be perfect.
But it will require a willingness to make changes.
And the persistence to see them through.