How to attack your debt

Many are living above their means and are cash strapped. Debt causes bondage, stress and much heartache.

You may feel overwhelmed by your debt. If so, please don’t give in! Don’t give up! You can get through this.

There is a way out! You can rise up above your debt. With God at your side, there is hope!

King Solomon told us that, “The rich rules over the poor, and the borrower is the slave of the lender.” (Proverbs 22:7)

Today I want to share a debt attack strategy with you that works! I have heard of many who have followed this strategy and have seen their debt wiped out.

A 7-step debt attack strategy that works

So, let us look at a basic strategy to help you out of the debt trap: 

1. Face your fears and pray

Yes, take an honest look at your current situation, and face your debt.

Don’t be like the ostrich who just buries his head in the sand when he faces a situation he doesn’t like. Face your fears. Face your giant of debt. Look it in the eye and say enough is enough!

Now, invite God into your situation. He is interested in you. God is a bondage-breaking God and He wants you to be free. He also wants to walk your journey with you, out of debt, and into financial freedom.

It is time to rise up, look to God and pray!

“Don’t worry about anything; instead, pray about everything. (Philippians 4:6)

2. List all your debts

You need to see how much debt you have.

Set up a simple table and include the amount of money you owe, the term your debt is running over, and the minimum repayment you need to make on that debt.

3. Can you sell something you don’t need or are not using? 

You can possibly free up some money and use this to get rid of some of your debt.

Maybe it is the bike in the garage that is not being used, the exercise gadget you bought but that you are not using, or the second TV you own. Sell it and use the cash to get rid of your debt.

If you bought a car on finance and you have had it for a while, you could even get a settlement value. You could then sell your car, settle up the outstanding debt, and use the excess cash you receive to buy a cheaper car, resulting in less debt and lower insurance premiums.

4. Budget clean up

Review your budget. Can you cut some wasteful expenditure?

Obviously, your basic budget items need to continue, like paying your rent/bond, putting food on the table, etc.

But, maybe you can cut certain luxury items over the short term to free up extra money in your budget to attack your debt. You could cut your entertainment by choosing to not eat out for the month, or you could cut back on the purchase of new clothing over this period. You could also consider cutting your gym or Netflix for a short period of time, where you can temporarily use these funds to settle that debt.

Another option is for you to review the rates and premiums you are paying for your cell phone account, your bank fees, and even your insurance. You will be surprised at how easy it is to get a better rate if you shop around!

The aim of reviewing your budget is to free up cash flow to attack your debt.

5. Start paying off your smallest debt first

It is important to keep paying the minimum repayment on each of your debts. But, I want you to use the surplus money you have managed to accumulate by selling your junk or unused items to attack your smallest debt.

Also, you need to use the surplus money you have freed up in your budget to plough into your debt.

Start by attacking your smallest debt first. When you settle the first debt, you will gain a sense of accomplishment and you will be motivated to continue wiping out your debt.

Once that debt is settled, get the scissors, cut up the card and cancel it before you spend more money on it.

6. Roll over your debt repayment

When your first debt is settled, roll over the payment into your next smallest debt.

You can now take the monthly repayment you were paying into your first debt, together with the money you freed up in your budget, and roll it into your next debt.

Once this debt is settled, keep rolling the repayments into your next debt.

As you continue to roll over your debt repayment, you gather momentum, and your debt will start to reduce drastically. You will be surprised at how quickly you will start reducing your debt.

If you keep going, your credit cards, store cards and loans will be settled in next to no time. Your debt will become manageable and your cash flow will improve.

Once your debts are at a manageable level, you can bring some of your luxuries back into your budget.

But keep going. Keep attacking your debt until you are completely debt free.

And don’t forget to celebrate when you reach your milestones!

7. Manage your money in the right order and build your Wealth Portfolio

Now that you have settled your bad debt, you can reset your budget.

Please make sure that you stay out of debt!

Get your priorities in the right order. Your cash flow will be good. You can use some to improve your standard of living, but please take part of the money you were using to repay your debts and ensure that you put God first, and that you invest part of your income so that you can build up a Wealth Portfolio.

Not only will you wipe out your debt, but this will set you on the path to financial freedom.

Consider the 10-20-70 principle

• 10% to God.
• 20% into your Savings and Investments (Build up cash flow for emergencies and invest part over the long term to build up your Wealth Portfolio).
• 70% to cover your living expenses.

The debt attack strategy works, and sticking to the 10-20-70 Principle will help you turn your financial affairs around and build towards a fruitful financial future.

I know of many who were completely cash-strapped and under huge stress with debt, that used 7-step debt attack strategy and the 10-20-70 principle.

Not only did they obliterate their debt in next to no time, but they also set themselves on a course of living a God-honoring life, while building towards financial freedom. And, their standard of living improved. They began to enjoy life again. They lived with more peace and joy.

The shackles of debt were broken, they had improved cash flow for the emergencies and opportunities that arose. They could once again dare to dream knowing that they were building their wealth portfolio and setting themselves up for a brighter and more fruitful future.

If you apply these simple strategies, you will win your war on debt and you will also build up a Wealth Portfolio.

Set up a simple strategy to attack your debt. Be disciplined. Be determined. A little short term pain, will lead to long term gain!

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty” (Proverbs 21.5)

Not only can you wipe out your debt. You can also build towards financial freedom.

If you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.

God bless you.