The average household carries $8,650 of credit card debt. More and more, that debt is incurred for the basics of living (rent, groceries, etc.). A vicious cycle of just about making it out of debt, another crisis, and once again the credit card is used just for keeping the family intact. The original plan all of us had was just having a credit card for the simplicity of use on large purchases. It was not meant as a means of long term borrowing, but that is what is has become, a high interest rate loan that you probably have to pay an annual fee for the privilege of staying in debt. Then there is the fine print fees should you miss a payment or be late in a payment. It is time to rid yourself of this burden.
- Stop buying. Train yourself to browse the things you want and shop for the things you need. The secret of course is knowing the difference. A simple first measure in determining need versus want, who benefits from the purchase, just you or the entire family. Wait a day or two before making any purchase if not a family need. Impulse buys are wants not needs. Work with your spouse to stay within budgetary guidelines and limits ( see step 4 and budgetary help tools in this section). No shopping alone, make it a family event or maybe, a time for you and your spouse to escape the family and have moment to talk and hold hands.
- Get out the scissors and cut up all but one of your cards. Put the one with the lowest interest rate in a locked in a box with the Second Commandment written on top of it. Do not even think about the offers that will come in when you stop using the cards let alone the offers for new credit cards with low introductory rates. Repeat the Lord's Prayer and throw them away.
- Analyze your credit card statements. Make a chart showing the interest rate, amount owed, and any annual fees. Normally you should pay off the ones with the highest interest rates first. However, if there are ones with annual fees that can be paid off before the fee is due, do it. Pay the maximum you can reasonably afford on the chosen card after paying the minimum payment on the remaining cards. Don't be afraid to talk to your creditors. They just might give you a reduced interest rate or some other relief. One step at a time, one credit card at a time equals financial freedom. As you pay off your debt take pride in your achievement.
- Learn to live on a budget and within your means. A monthly budget is useless if it exceeds household income or doesn't include a regular savings for the inevitable rainy day (when your car breaks down). Use cash when you can. Using envelopes works. You can see exactly how much you have left to spend. Look at it before you reach. Don't get in the habit of "borrowing" from one expense to pay for another. Adjust your budget. It takes time to find a true budget that fits your household. And remember, it is a household budget. Include them in all budget decisions so that your children well trained in all the principles of Christian living including living in the blessed freedom of a debt free lifestyle.
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