How to Be Debt FREE!

Tomorrow's FHE talks about debt and how we should avoid (or rid) ourselves of debt. Jon and I have struggled in this area and have learned a lot about things. I don't know where you all are financially, but some of these ideas may apply to some or all of you.

From the church website:

Church leader Elder Robert D. Hales outlines ways we can become self-reliant:

• Be ready for rainy-day emergencies
• Avoid excessive debt; be content with what we have
• Use the resources of the earth wisely; don´t be wasteful
• Prepare for the future by making spending and savings plans
• Keep a family or personal budget
• Teach children wise spending habits and help them save for the future
• Obtain an education or vocational training
• Find gainful employment

Jon and I didn't actually overspend all that much...most of our debt came from unexpected expenses like fixing our vehicles. For some reason this happens to us a lot, so we ended up getting into quite a bit of debt because 1. we had to pay to fix our vehicle to work, and 2. because we had no savings to pull from. This was the biggest thing for us. Then, once we had enough large purchases we were paying for, it was nearly impossible to ever save. That leads to more debt, and on and on and on.

I found a few websites with some helpful ideas, examples, budgets, etc...

Budget 101
This is a great site with a lot of information about budgets, weekly planning, how to save money, and others.

LDS Website
This link has articles about financial preparedness; how to avoid debt, how to budget, how to teach teens, etc... There are other links within to self-reliance subjects.

Zen Blog
So I have no idea what this blog is about, but this one link is the followers' 73 ideas how to get out of debt! There are some really great ideas!

I know there are many others, but these had some good ideas! The best things I can suggest are:

Pay Tithing First: Anytime you're struggling, if you put tithing off a week or two, all of a sudden you realize there is no more money to pay tithing and you get behind. If you pay it first, you're able to pay it, and then with the Lord's help, you're able to pay your other bills as well...somehow.

The snowball method: You pay all the extra you have to the highest interest rate or smallest balance first; then once that is paid off, you apply all of that payment to the next highest interest rate or smallest balance.

Budget: If you don't have a budget, it will be close to impossible to spend within your means.

Build a Savings: We pay 10 % to tithing right? Why not try to at least put 10 % away for yourself as well. Put it away in the emergency fund. Once that's to a reasonable amount (3 months worth of bills) then put more away into a different savings account (ie vacation, holidays).

Consolidate: If you have multiple credit cards, try and consolidate them into a low interest rate option. By making one payment you will pay off the debt quicker.

Lower Bills: You can contact your credit card companies to see if you qualify for a lower interest rate. Depending on your situation, you may qualify for a lower energy bill, or even a lower student loan repayment amount. APS offers energy discounts to families who meet their guidelines, and there is a new Income Based Repayment program regarding student loans; if you meet the qualifications, your loan repayment amount will be reduced. So contact any company to see about lowering your bills.

Envelope Budget: I really liked this idea...it's on the Budget 101 site, so check it out!

I hope this information was helpful. I learned a lot about this in my finance classes and since Jon and I have been married. It's a very easy trap to fall into, but also possible to get out of.