HOW TO GET TOTALLY OUT OF DEBT GOD'S WAY

Step Three - How to Develop a Short Term Financial Plan

 

Owe no man any thing - Romans 13:8  ·  A borrower is  a slave to his lenders - Proverbs 22:7

Thanks for looking into Prosperous Life Newsletter today. We've prayed that this article will edify you with the TRUTH of God's Word and cause your FAITH to grow stronger (Romans 10:17).

This is the third step in a special 6-part MiniCourse on the subject of getting out of debt God's way including your mortgage in less than 5 to 7 years (or maybe even sooner if you get the Lord really involved). One of the main things we've wanted to point out is that every Believer should be making debt freedom of the highest priority so that we can all be separated as much as possible from the World financial system. I don't know about you but I'd rather not have to be explaining to Jesus when He returns why I hadn't been making much of an effort to get out of debt while I was waiting for Him. Therefore, I believe this MiniCourse can be a big help if you're serious about getting OUT OF DEBT. If you need back issues let us know and we'll email them to you.

The Requirement of Writing a Plan

Once you've made the irrevocable decision to become debt free and have taken the first action step toward that objective by making a list of all your creditors as you did in Step Two, the next step is to develop a specific plan for how you're going to manage your finances during this Program. The Bible says to WRITE your vision, in this case a financial vision, so that you'll be able to carry it out effectively (Habakkuk 2:2). And when you have it all assembled it will be a complete financial plan that will govern your day-to-day spending decisions.

At the end of this paragraph there's a LINK for you to download a one-page form called the Monthly Family Financial Plan. This form will be the foundation of your journey to debt freedom. More then 80% of all families in the US have NEVER had a monthly financial plan that they've actually lived by and this is one of the major reasons they live in chronic indebtedness: there's no plan in place that'll impede over-spending.

CLICK HERE FOR SPENDING PLAN FORM

Debt Freedom is based on a simple basic concept: as an ongoing condition of life, monthly spending MUST be less than monthly income or the family WILL go into debt. It's simple but it's also difficult because like everything else in life of value, it takes commitment and some related effort to make it happen. It's NOT a passive endeavor and for those of us who're already in debt the Lord's probably not going to just drop miraculous debt freedom on most of us even though I see a lot of well known preachers praying for God to do it that way. Certainly He could if He wanted to, but it's very clear in the Scripture that God expects us to be the ones staying out of debt. We won't have to get out of debt alone though; no, we'll be getting out of debt TOGETHER with Him. But God is a REWARDER of those who seek Him in Faith (Hebrews 11:6) and Faith requires ACTION. We have to step out in Faith and believe that God will meet us where we need Him. So let's get busy and take the ACTION in faith believing that God will show up.

Your exercise for this Step is to fill out this form based on your recent spending patterns. The form is arranged in a priority format from highest priority at the top left, down the left hand side of the page and then up to the top on the right hand side and down the right hand side to the lowest priority expenses which are called the Optional Living Expenses. All of your monthly payments from revolving indebtedness that you identified in Step Two should be included someplace here in your monthly Financial Plan. Notice that the form has a special place near the end for your total MINIMUM credit card payments that you also calculated in Step Two.

Adjusting the Plan

When you first lay out your Financial Plan it's very likely that it won't be in proper balance. To be clear about it, most people will have greater monthly expenditures than income which is why indebtedness has been increasing. Therefore, it's going to be necessary to adjust the plan so that there's some amount of surplus instead of a deficit. You will have to find a way to live within your means, which is to say you have to find out how to live within the amount God has provided. There're only two ways to bring your Plan into balance: decrease your expenditures and/or increase your income.

To initiate the adjustment process you'll want to start from the Optional Expenditures and work your way up the right side of the form cutting down or eliminating the expense items to the minimums you think you can live with. You should cut everything down to size that can be cut even Essential Living Expenses if you can see that you can live with less. And you keep on cutting until you bring your Plan to the point where it shows a surplus. The objective is to be as frugal as practical and make the surplus as large as possible so you can use it later on in the process of debt repayment.

Notice that the form reflects small percentages to the side of the major categories and these percentages are related to Available Income on the basis of national averages which you can use as a very general guideline. They are based on a family of four including 2 children in a typical state and not in one of the major metro areas where the cost of living is particularly higher than average. If you find your percentages a lot higher than the guidelines it's simply an indication that you should look more closely at that particularly category because at the end of the Plan all the percentages need to add up to less than 100%.

Some folks may have an opportunity to increase their income with part time work or a second job or by starting a home-based business. Selling personal items on E-Bay or conducting Garage Sales are all very good ways to raise additional funds to bring your spending plan into balance. But before you adopt some strategy that will take you out of the home and away from your children, consult with the Lord to find out what the correct approach is going to be for you. It's NOT the same for everybody. There're no set rules or ways to accomplish this part of the exercise. The Lord will lead you if you ask Him and at the end of all these adjustments you'll come out with a revised Financial Plan that will guide your living in the months to come.

We recommend the purchase of one of our e-publications that will help you look for the types of adjustments you will want to consider for your Plan: How to Prepare and Actually Use a Simple Family Budget. It can be purchased on the Ministry web sites for only $27.00 or you can call the Main Office toll free at 1-800-357-4223. It will be a big help with lots of suggestions that are beyond the scope of this MiniCourse.

Establishing a Contingency Fund

Now before you take steps to start paying down your indebtedness, which we will discuss in Step 4, there's a critical preliminary step that most people forget. You must establish an appropriate Contingency Fund that will cover those unexpected emergency expenditures that can't be budgeted. If you have an appliance break down that has to be repaired or replaced or if you car battery goes dead or your tires wear out, etc. the need for those expenditures is usually not anticipated and can put a crimp in your Financial Plan that could throw off your whole program. You need a Contingency Fund and we recommend that you establish a minimum cash reserve of $2,000.00 and put it in some separate account, even in a separate bank if necessary, where it's difficult to retrieve and you have to go out of your way to spend the funds. Otherwise you'll be tempted to use the Contingency Fund for normal expenditures at times when you need to wait on the Lord.

You need to start with a fund-raising program to raise the $2,000.00 and set it aside before you take another step in your program. Garage sales, selling on EBay, Flea Market sales, selling surplus art, or surplus jewelry, etc. are all good ideas for raising surplus money for your Contingency Fund. And you'll undoubtedly come up with some even better ideas. Once you have this important Fund set aside and ready for any emergency, then proceed to attack your indebtedness.

Since this is a MiniCourse it's designed to present as much information as possible within a restricted space. For a number of folks what they learn here will be sufficient to send them off and running toward the goal of DEBT FREEDOM. But others will want more information with deeper explanations than we can fit into the available MiniCourse space and for you we recommend the more complete renderings of this subject in the book and video-webinar format made available from the ministry web sites at a very affordable cost. The truth is, this MiniCourse will work best for the less complex cases and most people will want to at least look into the video-webinars even though there is a related cost. Quality education is never really FREE and it's worth way more than the alternative of continuing to be uninformed. The Bible says "people are destroyed for lack of knowledge" (Hosea 4:6). A few dollars invested wisely in self-education CAN CHANGE YOUR ENTIRE LIFE.   

Key Points to Remember

Most people long to be debt free and they think about it a lot. But nothing ever happens simply because they fail to take action or they take the wrong action. In line with this thought keep the following conclusions in mind to take away from this article today:  

1. God will help you with your Debt Freedom Program but usually you will have to take action to show your commitment and then the Lord will meet you where you most need Him.

2. You MUST write down a detailed Monthly Family Financial Plan so that you can run with your program for DEBT FREEDOM.

3. You MUST find a way to bring your Monthly Plan into balance where your expenditures each month are less than your income.

4. You MUST establish a Contingency Fund of at least $2,000 before proceeding with your debt elimination program.

We'll be emailing you Step Four of your MiniCourse with the next issue of PLN in three weeks on July 22. In Step Four you'll learn about a model for paying off your debts in the shortest possible time so you can be TOTALLY out of debt in 5 to 7 years. Thanks for using this material. May God bless you with every spiritual blessing and make your way prosperous in every area of life.

Sinners' Prayer

If you've never invited Jesus to be the Lord of your life, you need to and you can do it today just by saying out loud the following simple prayer:

Jesus I declare today with all my heart that I believe in you and that God raised you from the dead. I receive forgiveness for my sins and I ask you to come into my life today and be my Lord and Savior. Thank you for salvation and eternal life.

If you were sincere as you prayed this prayer, God has already come into your life and you are a new creation, a totally new species recreated in His image. Now ask the Lord to lead you to a good faith-based, bible-teaching church where you can be equipped to fulfill your potential in the Kingdom of God.

Prayer Requests

If you have a Prayer Request, please connect to the Link below and follow the promptings. The PLN staff members pray over Prayer Requests every Tuesday morning at 10:00 AM eastern time. God bless you.

http://www.creditcounseling.net/prayer-request.aspx

About Prosperous Life Newsletter

PLN is an outreach ministry of Make A Way Ministries located in Miami, Florida. It is in its 14th continuous year of publication and has been published faithfully every third Friday since January 1998. It's an e-publication primarily about finances in the Kingdom of God and is sent ONLY to our email list of members. If you're reading this and aren't yet on our growing email list, please let us know and we'll be so very happy to add you.