Friday, May 20, 2005

Debt - Help Yourself Get Out of It 2

Last time I covered the first three steps for a plan to get out of debt. This time I'll cover three more:

  1. Start selling things. We all accumulate a lot of clutter. You may not realize this, but there is money in that clutter. You may also have some valuable items that you don't really need. It is far better for you to sell these items than for your creditors to seize them and sell them for pennies on the dollar. Some of your more valuable items might be costing you in insurance premiums, storage space, or to maintain it. You might also have an expensive car. You could sell the car and get a smaller one that will save you on maintenance and insurance costs, not to mention fuel. The same goes for your house. If you can't bring yourself to sell items, because they mean too much to you, be aware that you may have identified a problem. You may be making that item an idol. Ezekiel 20:7 tells us to get rid of idols. It is easy to set up a seller's account on eBay, and there are a lot of buyers. If you don't think you can do it yourself, hire someone who is skilled at selling on eBay. If you have a lot of books, try selling them on It doesn't cost anything, and couldn't be simpler. If the books aren't worth anything, or won't sell, give them to a charity and take a tax deduction for them. This will free up cash to pay off debts. In fact, selling a car or a house might raise enough cash to make you debt free instantly.
  2. Seek Counsel. In Proverbs 21:5 it tells us that it is good to use planning as a tool to build prosperity. That is what we are doing here, creating a plan. You would never get out of debt if you didn't commit to doing it and had a plan of action. In some cases, you may want to find a financial planner to assist you, but if you are essentially poor you probably can't afford it. However, it is always wise to seek counsel. Psalm 1:1,2 tells us to choose that person wisely. They should be a person who is an expert in finances but also that person should be godly - 2 Samuel 16:20-23. The ultimate source of counsel is the scripture - Joshua 1:8. The purpose for seeking this counselor out is to help you see where you can improve your stewardship with money, and to help you come up with ways to pay your debts off. They can give you guidance in working out a negotiation for a repayment schedule that makes sense, and that you can stick with.
  3. Accelerate Your Efforts. Once you have a plan in place, look for ways to accelerate it. This is to focus your mind in on solving the problem. If it becomes a focus, it is more likely to be successful ahead of schedule. In Luke 18:27 tells us that we can accomplish anything if we are operating in God's will for us. Getting free of the slavery of debt is His will. Ask for His help. You find money by spending less and applying it to debt service ahead of schedule greatly accelerates it's elimination. After paying off one account, apply that payment to the next account on top of what you are already paying. Elizabeth Warren, Author of the book "All Your Worth" suggests that we should limit our budget for necessities to 50% of our net income, then we have the other 50% available to save and for what we want. It creates a nice margin of safety too for bad times. Look at her book for the details of how to do this to help you accelerate your results.

The rest of the plan, next time...

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