Connecting Columbia Union Seventh-day Adventists

5 Ways to Pay Down Debt

5 Ways to Pay Down Debt

Article by Sam Belony

According to the Seventh-day Adventist church's financial experts, there are five steps members can take to pay down debt:

1. Recognize the problem then commit to solving it. “Recognize that debt is a problem that needs attention. Debt is a major factor in depression, suicides and family breakups,” says Reid.

Miles concurs. “The first thing you have to do is ask the Lord to show you the issue; pray about it and ask Him to give you some direction.”

Matthews adds, “The biggest tip I can give to a person who wants to get out of debt is they’ve got to make a decision to do so. … If they don’t commit to live within their income, they never will.”

2. Make a budget. A budget is an itemized summary of income and expenses over a given period. It is a simple, yet powerful tool, and is critical for managing one’s finances. Pottinger suggests “a proper budgeting system that has one’s incomes and expenses connected, and to spend less than their income.” He believes the decision to be debt-free should include “every responsible member of the family, including children.”

3. Do an inventory of all obligations. Know the dollar amount you need to tackle. Reid recommends “listing all of your debts in descending order, from the largest (on the top of the list) to the smallest.”

4. Take austerity measures. “If you’re trying to pay off a debt, you cannot go on living business as usual,” advises Pastor Miles. “You need to start an austerity program; you have to cut back on some things.”

5. Create a payment plan and stick to it. Reid suggests making the minimum payment on all debts while committing the highest amount possible to the smallest debt. “Take any funds that you can spare or that come to you beyond your basic needs to pay on the debt on the bottom of your list,” he says. “Once the bottom debt is paid off, take that debt’s ‘minimum payment’ and add it to the payment next higher.” Repeat the process until all debts are paid.

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