Taking Control of Your Debt

Author Craig Kelley offers three tips for gaining and maintaining control of your debt.

Posted in , Dec 8, 2014

A woman sits on the floor, worried, while surrounded by unpaid bills.

The Internet has made shopping for birthday gifts, Christmas presents and even everyday items unbelievably easy. With a click of your mouse you can spend thousands of dollars and the payment is electronically transferred from your account (usually a credit card) to the merchant.

Do you remember when you used to have to go to a store to buy things? There was friction in the purchasing process. It was a "to-do." You would have to leave the house, get in the car, browse the stores and if you were lucky, you'd find exactly what you wanted. Impulse buys happened, but not if you stayed home.

Today you don't even have to leave bed. You can pick up your smartphone and buy anything you want from all over the world and have it delivered to your front door in a matter of days. You don't even have to take out your wallet!

In addition, the digital age has launched an entirely new marketplace: digital goods. You can buy things that don't even exist in the physical world.

There is no surprise that the average person carries almost $16,000 in credit card debt. Technology has made it too convenient and easy to spend hard-earned dollars.

How do we fix this? What plan does God have for your financial life? Let's take a look at three simple tips that can help guide your journey.

1. Clearly define the difference between a "want" and a "need"

One thing that shocks me when I talk with people about their finances is that there is no clear distinction between something they want and something they actually need. It really reveals the infancy of each person's financial walk.

In my book How To Get Out Of Debt: A Biblical Approach to Living Debt-Free, I list several "wants" that many people confuse as a "need".

Wants (Unnecessary Expenses)

  • New car
  • Cable/Satellite TV
  • Personal Care
  • Top-of-the-Line smartphone
  • Sporting Events
  • Dining Out
  • Vacations/Trips
  • Children Investment Accounts
  • Computers
  • Gifts
  • Home Improvements

While most of these items could improve your lifestyle, they are still luxury items. It’s understood that not everyone has access to public transportation, so a car is necessary under those circumstances, but going deeply into debt to purchase a brand new car isn’t. A solid used car will do the trick, and costs many thousands less.
And many folks now have only a cell phone, with no landline, but even then, the newest phone, with all the latest bells and whistles, certainly isn’t a necessity. Using an older phone and shopping around for an affordable provider is advised.

Children are notorious for thinking everything is a need. Anyone with kids can attest to that. One technique I've used on my kids (I have 4 so I've had a lot of hands-on practice!) is the delay tactic.

When my kids ask for something that I feel may not be in their best interest, I simply say, "We'll see." I haven't crushed their hopes, and I haven't said "no". Amazingly, after a few days, I never hear about it again.  It's a simple response that works 99% of the time.

2. Wait at least two days before purchasing

I will be the first to admit that, like my children, I do not enjoy waiting. I like instant gratification, and I'm not alone. I have become so spoiled that I sometimes get agitated if my package doesn't arrive from Amazon within a few days of ordering.

Unfortunately, this type of mind-set has driven many families deep into debt. We want it now even if we don't have the money to pay for it.

An older lady that I once worked for would remind me time and time again, "For buy: waste time; for free: take." Her father shared that with her when she was a child and she passed that little nugget on to me. So simple, but powerful.

The next time you go to purchase a "want," wait at least two days before making the purchase. This technique could save you big bucks.

3. Keep the big picture in mind

Most people spend their entire lives trying to acquire things to make this life comfortable and enjoyable, but true peace comes only from a personal relationship with God. God wants to bless you and has great plans for you (Jeremiah 29:11). Materially? Maybe. Spiritually? Absolutely.

Imagine the freedom you would have if you were content with what you have. Imagine not worrying about the clothes you wear or where you live. Imagine the freedom you can have by sacrificing now for greater gain later.

I'm not suggesting that you sell everything you own, quit your job and go live off the land. I'm merely pointing out that the things of this world will come and go. Invest your time and resources in things that will last.

Taking Control
How do you eat an elephant?  One bite at a time. The way to get out of debt is exactly the same. Tackle each "want" individually. Know the difference between a want and a need. Take your time when purchasing things and always keep your focus on the greater picture. The little habits will lead you to a path of financial freedom or financial ruin.

Arm yourself with these three simple tips on your road to success.

Download your FREE ebook, A Prayer for Every Need, by Dr. Norman Vincent Peale.

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