Financial Freedom Series: How to Avoid the Debt Trap

Welcome to part 5 of our Financial Freedom Series, where we’re looking into God’s Blueprint for Building Wealth and Managing Your Money Well!

We dive into biblical principles and cutting-edge money management wisdom to help you…

• Honor God with your money
• Build wealth
• Shrink your debt
• And build toward financial freedom

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

“But remember the Lord your God, for it is he who gives you the ability to produce wealth.” (Deuteronomy 8:18)

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5)

“I will guide you along the best pathway for your life. I will advise you and watch over you.” (Psalm 32:8)

So many people are…

• Battling to make ends meet, 
• Living above their means,
• Cash-strapped,
• Debt-ridden,
• Just trying to survive,
• Going through the motions, and
• Disillusioned with life.

Over the next few weeks, we are going to focus on DEBT. 

Today, I want to share a few simple steps you can take to help you AVOID THE DEBT TRAP.

In the next few weeks, we will examine the consequences of debt and share a DEBT ATTACK STRATEGY with you to help you get out of debt. This strategy really works! We will then give you the tools to build financial freedom. I am confident that you can turn your financial affairs around. 

Debt = Stress 

Debt is a major problem for many. Debt will crush your dreams and leave you stressed out. It will enslave you, steal your cash flow, and cause unnecessary pressure. Debt will stop you from attaining financial freedom.

Do not let your financial failures sabotage your dreams and leave you feeling defeated and hopeless. Instead, surrender your burdens to God. 

Give Your Debt to God 

In the Bible, David faced an impossible situation. He was under pressure, disillusioned, and worried. Despite his fear, he didn’t let his situation overwhelm him. He chose to trust in God and ask God for help.  

David looked to God for a way out. He said, “I sought the Lord, and he answered me; he delivered me from all my fears. Those who look to him are radiant; their faces are never covered with shame. This poor man called, and the Lord heard him; he saved him out of all his troubles.” (Psalm 34:4-6)

No matter how overwhelmed you may feel when you look at your debt, know that God can save you from your troubles. He can make a way out of your dilemma. Put your trust in God. 

How to Avoid the Debt Trap

I want to share a few practical steps for avoiding debt. If you apply a few of these simple tips, I am sure that you will be able to shrink your debt and set yourself on a new road towards Financial Freedom. 

1. BUDGET, BUDGET, BUDGET…
   • Budget – if you can’t afford to buy it for cash, don’t buy it. You need to live on less than you earn. 
   • Budget – if you are spending more than you are earning, you are in trouble.
   • Budget – if you need a loan to buy a home, make sure you can afford to make the repayments, especially if the interest rate increases. Live within your means and build a buffer into your budget.
   • Budget – plug spending leaks. If you keep a record of everything you spend, you will be surprised how much you can save.
   • Budget – As my good friend Andy says, “If you can measure it, you can manage it!”   

2. SAY NO TO DEBT…
   • Avoid taking out new debt, like store cards, etc. 
   • Stay away from “interest-free” schemes – it is merely a ploy aimed at getting you to think that you can ‘buy now and pay later.’ If you can’t afford it now, how will you afford it later?

3. DARE TO BE DIFFERENT…
   • The average person just “follows the crowd” and is cash-strapped and debt-ridden. Choose to be different. Instead of getting deeper into debt, consider doing things differently. 
   • Build a positive cash flow. It will take the pressure off.

4. SAVE FIRST…
   • Save – if you want something badly, save for it and pay cash.
   • Save first, and then only spend what is left over. Most people spend first and then have good intentions of saving what is left over. The problem is that there is never anything left over to save. 

“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett 

Be Intentional

Although we all know that we should have a FINANCIAL PLAN in place to manage our finances, the reality is that many people don’t have a plan in place. 

Get DETERMINED to deal with your debt. FACE YOUR FEARS. DARE TO DREAM. GET DETERMINED TO BREAK THE DEBT CYCLE. SET UP A PLAN. 

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5)

If you want to avoid the debt trap, I suggest that you…

• Set up a budget!
• Say no to debt!
• Dare to be different!
• Save before you spend! 

Debt puts you in bondage, and short-term satisfaction from buying something on credit may leave you broke, debt-ridden, and stressed out over the longer term. Before you buy items you cannot afford, ask yourself – Is it worth it?

When it comes to debt, be smart. If you are seriously planning to get out of debt and stay out, you need to plan how to use your finances wisely. 

You can eliminate your bad financial habits and introduce new, effective money management habits to help you avoid the debt trap and turn your financial affairs around! 

Debt causes so much pain and stress, but with God at your side, you can face your troubles, knowing he can make a way out of your debt and create a breakthrough.

Lean on God and apply these simple principles. If you do, you can declare war on your debt and deal with your nemesis once and for all. You can break the debt cycle! You can build towards a more fruitful financial future by managing your money better.

Next week, we will continue our discussion of Financial Freedom and look at a few practical ways to help break the debt cycle. In the weeks to come, we will also give you a working Debt Attack Strategy, and I will give you the needed tools so that you can turn your financial affairs around. You can set yourself up for a brighter tomorrow. You can build towards financial freedom.