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It’s easy to borrow or get credit/loan when you have a regular income. At the back of your mind, you can say to yourself, “it’s ok to borrow; anyway, come payday, I can pay a portion of my debt”.

But what if you don’t have a regular salary like me and you also have outstanding debts to pay?

I’d like to share what I AM DOING to get out of the debt trap. Yes, I’m still paying my debts. It’s actually debts obtained from irresponsible use of credit card.

It was last year when it dawned on me that I have to do something about my ballooning debts.

Sometimes when you let your emotions get the better of you, you tend to use your credit card with reckless abandon. (Note: This experience humbled me because despite my being in the business of soliciting investments such as mutual funds and real estate, it did not spare me from being drawn into debt.)

Here are the steps I did and continuously doing in getting out of the Debt Trap:

1. Pray. 

Pray for guidance. Pray for wisdom. Pray for help. Pray for direction.  You can’t do it alone. When everything seems impossible to overcome, there is the God of the Bible who can make a way esp. when there’s no way. Pray for financial breakthrough. Pray for financial provisions. Ask people from your church to be one with you, to pray with and for you to achieve this goal of becoming debt-free. To become a blessing. To become the head,  and not the tail. I attend church in Victory Greenhills and I’m blessed to have so many people pray for me for deliverance from debt bondage. Never underestimate the power of prayer.

2. Desire to Change.

Change your lifestyle. Cut up your credit cards. If you can’t, stop using it. And if possible, don’t renew your credit card membership. In my case, I gave up on 2 cards to date  after paying them in full and I’m still paying debts on my last credit card. I might keep it but this time, I’ll know better. There’s a proper way of using your credit card. Do not be a “revolver” user (someone who pays only the minimum payment) but if you will keep one, be sure to be a full payor. Use it only for convenience if you don’t want to carry cash and make sure to fully pay it when your bill arrives.

In the words of Dave Ramsey, “Live like no one else so that you will live like no one else”. You need to have this “gazelle-like” intensity to get rid of your debt. Start paying your small debts first because it’s easier to do so. Change your spending habits if you must. Whenever you are confronted with a decision to buy something, think it over. Is it a need or a want?

Follow this formula when you earn income : INCOME – SAVINGS = EXPENSES. That’s it. Make it a point to allocate a budget for SAVINGS. In the long run, you will not regret that you did. Save, save, save. It might be easier said than done but the first step will go a long way. Remember the old Chinese proverb: “The journey of a thousand miles begins with one step”.

3. Education is Key.

Invest in Financial Education. I did. I started investing in financial literacy last year (2011). That was the time when I decided that I had to get of out of this debt trap. It might sound illogical by spending for education when you have outstanding debts to pay. But you have to realize that IGNORANCE is more expensive than being financially literate.

It really helped me when God led me to attend the very first Steps to Financial Peace event held last August 2011. I have shared in this blog what I have learned from that seminar:

http://ronniereyes.ph/2011/08/15/things-i-learned-from-a-finance-seminar/

Read up on books that deal with Personal Finance. I highly recommend Dave Ramsey’s book entitled, “Total Money Makeover”. It really spurred me to get out of debt once and for all and never look back again. Thank God, I am on my way to achieving financial peace sooner.

Do you know that the Bible talks about money more than prayer, faith and other spiritual concepts? It is because God recognizes that money is really an important aspect in the lives of men and if put to good use, God will bless us for being good financial stewards and if not used properly, it can even break us. I’m sure you’ve heard of stories how people’s lives were blessed or ruined because of money. Really, the consequence of your actions show in how you deal with money.

Even the wisest of God’s holy people in the Bible, Solomon, son of David, had this to say about money: But divide your investments among many places, for you do not know what risks might lie ahead. (Ecclesiastes 11:2)

And even the apostle Paul had this to say about money which was a revelation from God: For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. (1 Timothy 6:10)

The Bible is not only a spiritual book. It contains the answer to the current problems of man. And you will not only learn the a lot of wisdom in personal finance (esp. from the Book of Proverbs) by becoming a good financial steward, but it will also help you know more about God and assess your current situation before God. And from the Word of God, this leads me to the last step:

4. Give back.

You’ve heard the saying, “what goes around, comes around”.  The Bible gives plenty of insights on how one can become a good manager of a given resources.  The Bible says that “… a man reaps what he sows” (Galatians 6:7).

What do you do when God starts opening up doors for you ie., when He starts blessing you? The Bible says, “A generous man will prosper; he who refreshes others will himself be refreshed.” (Proverbs 11:25). Here’s another one. A generous man will himself be blessed, for he shares his food with the poor. (Proverbs 22:9).

God is teaching me that everything in this world belongs to Him:

Of David. A psalm. The earth is the LORD’s, and everything in it, the world, and all who live in it (Psalm 24:1)

From this revelation, it made it easier for me to keep the faith and trust God esp in the area of tithing. Because you can never out bless God if you start tithing faithfully.

Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. (Malachi 3:10)

From this personal experience, I look forward to the day when I am finally debt-free. And when that finally happens, all I could say is this:

God heard my prayer and He is faithful and He will deliver me not only from my financial problems but from the pit. For the pit is the devil’s attempt to bury me alive. But thanks be to God for His grace and mercy in my life, through His Son Jesus.

I can already see light at the end of the tunnel for I have been set free from the pit.

You too can get out of debt. Act in faith. Believe in God through His Son Jesus Christ and He will set you free from the bondage of debt.

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