Spiritual Growth

5 Tips for Avoiding Debt

By Felicity Watson

1. Make a budget and stick to it.

a. Click here for a basic budget form.

2. Keep only one credit card and shred the other credit cards and credit card applications.

a. Don’t get sucked in! Credit card companies WANT you to overspend on credit cards because they get rich from the finance charges you pay each month on the portion of your balance that you can’t pay off.

3. Use your credit card to pay for retail items ONLY when you could pay cash for that item at that moment.

a. You end up paying more for an item than the stated price when you pay finance charges. If you buy on credit a college sweatshirt for $25 on sale from $35, but you can’t pay off your credit card that month, then at an 10% finance charge rate for the $25 that you charged, you end up paying an extra $2.50 for the sweatshirt in finance charges. So the price is really $27.50. That’s still a sale price, but before too many months, the sweatshirt’s price will not only not be a sale price any longer, it won’t be a deal at all.

4. Look at your credit card and debit card statements along with your check book to see where your money goes. Commit to trimming some of your spending habits in those areas that are “too fat” and find an accountability partner to keep you accountable to your new spending plan.

5. If you are in debt, find a financial counselor in your church or at Crown Ministries who can help you create a plan for digging out of debt before debt destroys your life and your ministry options.