Financial Freedom Series: The 7 Step Debt Attack Strategy (Part 2)

Welcome back to 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)

“The wise man saves for the future, but the foolish man spends whatever he gets.” (Proverbs 21:20)

“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 last few weeks, we have looked at various aspects of DEBT.  

So far, we have… 

• Looked at the horrific statistics on debt,
• Encouraged you not to give up but to surrender your debt to God,
• Looked at the difference between good debt and bad debt,
• Encouraged you to face your debt and examine your current financial position,
• Motivated you to act and deal with your debt,
• Shared how you can avoid the debt trap,
• Looked at the consequences of being in debt,
• Shared 21 practical steps to break the debt cycle and build toward financial freedom.

7-Step Debt Attack Strategy 

I can tell you that this strategy works. Moreover, many who have applied this strategy have settled their debt faster than they ever imagined.  

The 7-STEP DEBT ATTACK STRATEGY will help you implement a workable solution to obliterate your debt and regain control over your financial affairs.  

You can wipe out your debt, and you can also build towards financial freedom.  

Last week, we looked at…  

Step 1: Examine Your Numbers  

To attack your debt, you need to know your numbers and clearly understand your overall financial position.  

Once we know where you are, you can devise a strategy to attack your debt.

Draw up an inventory of your assets… 

• You need to draw up an inventory of everything you own. 
• Including a full list of your savings and investments and a complete list of all your possessions is essential.  
• You should also include any unused goods possibly gathering dust in your cupboard or garage.
• Do you possibly have any assets that you could consider selling? If so, you could sell your unwanted goods, which, in turn, could free up some cash flow that could be used to wipe out some of your debt.  

Draw up an overview of your income and expenses… 

• You need to set up a budget
• Include all your income and expenses

List all your debts… 

• List all your debts on a schedule. 
• Arrange them in descending order, smallest to largest. 
• You need to take an honest look at your debt.  

You need to EXAMINE your… 

• ASSETS 
• BUDGET 
• DEBT 

Once you know your numbers, we can go on to STEP 2… 

Step 2: Analyze/Plan  

To attack your debt, you must look closely at our ASSETS, BUDGET, and  DEBT and devise a PLAN to attack your debt.  

So, let us consider a few practical solutions and innovative ways that you can consider that can help you earn more and cut unnecessary expenses from your budget.  

You can then develop a strategy to wipe out your debt as quickly as possible. 

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

The latest data in South Africa shows that many have more than one job. Can you become a polyjobber? 

The latest data in South Africa also shows that many are cutting costs in their budget.  

Last week, I introduced you to Sino and Sarah… 

How to Stop the Rot and Turn Things Around

My advice to you is the same advice I would give Sarah and Sino…

• Face your fears.  
• Call a family meeting.  
• Draw a line in the sand.  
• Invite God in.  
• Start the process of turning it all around.  
• Choose to get out of debt and build towards a fruitful future.

Last week, we looked at Sarah and Sino’s assets… 

Sarah and Sino do not have many assets, but they do have an old bike in the garage that is gathering dust. They have decided to sell it on gumtree.com to free up some cashflow to attack their debt. 

In a nutshell, Sarah and Sino were earning R40,000 p.m. Their monthly expenses are currently at R47,520 p.m. 

They are, therefore, running at -R7,520 p.m. 

This was causing major stress, and their debt seemed to be spiraling out of control. But I encouraged them to take a deep breath. They are facing their fears. And there is a way out! 

We then took a close look at Sino and Sarah’s debts… 

Their debt looks daunting, and their budget is a mess. But with a plan, they are hopeful that they can fix their finances.  

After considering their options to earn more income and reduce expenses, Sarah and Sino devised the following plan… 

Sino and Sarah are confident that they can free up time and they can start a side hustle to earn extra income… 

• Sarah is a good baker. She contacted a friend who owns a restaurant and got a contract to bake cakes. She is confident she can earn an extra R500 per week (2,000 p.m.) by supplying cakes. 
• Sino has sourced an opportunity to earn extra income doing consulting that will bring in at least another R2,000 p.m. over the next three months. As a backup plan, Sino is prepared to wait on weekends to earn more income if his contract deal falls through.  

Sino and Sarah are also confident that they can reduce their monthly expenses. Let’s examine the changes they have made to their budget.  

While Sarah and Sino have chosen to cut back on their non-essential expenses, they also have debt repayments that they need to continue paying… 

After Sino and Sarah have reviewed their budget, they are starting to feel better. They plan to EARN some extra income, and they are determined to CUT BACK on their expenses for a season to attack their debt. 

Before reviewing their budget, that we were running at a deficit of R7,250 p.m. 

With their new plan, they have space cash of R2,487 p.m. available each month. Instead of spending it, they plan to use it to pay down their debt. 

In a Nutshell… 

STEP 1: YOU NEED TO KNOW YOUR NUMBERS:

• ASSETS – WHAT DO YOU OWN? 
• BUDGET – WHAT AM I EARNING? WHAT AM I SPENDING?
• DEBTS – WHAT DO YOU OWE? 

STEP 2: ANALYZE/PLAN:

• CAN I EARN MORE? START A SIDE HUSTLE? BECOME A POLYJOBBER? 
• CAN I CUT BACK ON MY NON-ESSENTAL EXPENSES FOR A SEASON?
• SET UP A PLAN TO FREE UP CASH FLOW. USE THS TO WIPE OUT DEBT. 

Next week, we will look at STEP 3 and show you how to implement your STRATEGY to help you DECLARE WAR on your debt and BREAK THE DEBT CYCLE.