God speaks about money more than 800 times in the Bible. Money and our possessions are the 2nd most important topic after God’s Kingdom and how to get there. However, the Bible teaches us that debt is not good and should be avoided. In fact, the Bible likens it to slavery. We are a slave to the lender as long as we owe, owe, owe.
This scripture resonated with me, as I grew up thinking that freedom was the ability to buy whatever you wanted whenever you wanted. Then the bills started adding up and along with this, I found out that my freedom was quickly disappearing. After years of living this dream, it quickly became a nightmare. When you are young and start making money the euphoria of retail therapy is so addictive. However, we found ourselves working to pay off bills. We were a slave to our lender, just like that.
Per Experian, the average consumer debt is about $92,727. The average credit card balance is $5,313, the average student loan balance is $38,792. The current debt burden stands at approximately $14.56 trillion and includes all types of consumer secured and unsecured loan totals using the latest available data for the full year of 2020 cited in Investopedia.
Time To Sit Down With The Hubby
You do not realize you have a spending/debt problem until the bills arrive and after paying your bills there are still more to pay and no money left to pay the rest. To be honest, in one year we got married, had a baby, and then bought our first home. Granted, one of these life events is enough to challenge a budget but three is a recipe for disaster. Also, we each bought to the relationship our own debt.
To climb out of the debt we each created we were going to have to make some serious adjustments. The first thing was to create a budget, curb spending, review each bill and determine what needed to be cut. Finally, we would each have to begin to find new jobs that would cover the added expenses. Even, with these steps, we were each going to have to truly curb our spending. My husband complained, “but we have to live.” My immediate response was, “we have lived, now we have to pay.”
I do not know which is harder, changing your eating habits or changing your spending habits. I have had to do both and believe they are equally hard. Please read Budget: Money over Mind where I share how we keep our mind on our money to enable us to manage job loss, recession, and life in general.
Paying Off Debt to Be Less of a Slave to the Lender
So, we cut here, and we cut there. We began the snowball effect of paying off the credit cards with the smallest balances first. When we were left with the two biggest with high-interest rates, we decided to kill two birds with one stone. However, two major events happened that moved the needle. The first was after years of bi-monthly payments on our home the home was nearly paid off. The second was with the rising prices of the housing market that increased the equity in our home by more than three times. We decided to take out a home equity loan and build a true master bedroom over the garage and pay off the last of our debt.
The last owner who was a real estate agent told us if we ever had an opportunity to expand the home from a 3 bed and a 3 bath to a 4 bed and a 3 bath we should. Taking out home equity to build a true master suite allowed us to maintain the value of our home after the market crashed and to consolidate our debt to a much lower interest rate. Feels good to pay off debts and to be less of a slave to the lender.
Selling the House to Pay off Debt
Therefore, when we sold the house eight years later, we were able to pay off the 1st mortgage, the home equity loan, and our credit card debt. We also walked away with a nice profit to begin working towards our retirement goals. I am in no way suggesting that this is the route you should take as we made a calculated gamble based on the current market and it worked out for us. Others might say we used our home as a true investment flipping our home and walking away with less debt and profit. A win-win situation in my book and two steps closer to paying off our debt.
Final Debt to Pay and less of a slave to the lender
The next step was to pay off our cars which we both used savings. Based on our current savings we had enough to pay off our cars and still maintain a 3-6 month emergency fund. We were still not completely debt-free, so we are still slaves to the lender. We recently purchased our retirement home and are currently aggressively paying down the mortgage. Making extra payments has worked for us in the past so we will continue to do so to pay off this home.
In my blog Pay Off the Mortgage, we talk about how a bi-monthly plan helps to pay off the mortgage faster. However, our current plan is even more aggressive as we plan to make one extra payment per month. If our new payoff plan holds up then we should be completely debt-free in less than 10 years. However, the elimination of credit card debt and car notes is a large step towards true financial freedom. It is also a huge step towards becoming less of a slave to the lender.
God never intended for his people to live in slavery. That is why he was adamant about releasing the people from their servitude during the Year of Jubilee (Leviticus 25:13). However, debt is part of the fabric of our country. Debt is promoted as a way of life. We are constantly being told that we deserve and are entitled to the good life. Hence, if you continue to borrow you will always be a slave to the lender.
Steps To Take To No Longer Be A Slave To The Lender
1 List all of your debt
2 Create a budget that includes a debt payoff plan
3 Create a payoff schedule
4 Cut wherever you can
5 Sell whatever you can
6 Stop spending
7 Earn more money
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Let’s budget, spend and live!