Wednesday, February 1, 2012

A Slave To Debt

In January I wrote a post on acquisition addiction (part 1 and part 2), which typically results in debt.  Are you haunted by bill collectors? Stalked by credit card companies? Have a sick lump of dread in your stomach every time the phone rings because you’re afraid it’s another collection agency?

Do you take a cash advance on one credit card to meet the minimum payment of another? Are you using the 1990’s Roseanne Barr method of avoidance by not signing the cheque when you put it in the envelope to the utility company because you know there’s not enough money in the account for it to clear? You have to LOOK like you’re trying to send them money…so you pretend you FORGOT to sign it.

Are you living on payday cash advances with inflated interest rates of 29% or more and administration fees that gobble up your pay cheque before it hits your bank account?  Are you sinking a little deeper every day in the sea of debt? Is the water closing over your head in spite of all your efforts and hard work?

If you find yourself mired in desperation brought on by debt I want you to know there’s still hope.  I’ve been there and admit to using all of the various tactics listed above. I’ve also experienced all of debt's negative emotional friends:

        Shame                      Fear                      Anger
        Frustration                Desperation           Panic
        Depression                Apathy                   Dread
        Helplessness              Worthlessness

I dug myself out of the pit once. Now my husband and I are back in because of choices we made during the last two years. It’s so frustrating! We’re slaves to debt.

The money we make isn’t ours to spend, share and give; instead it’s going to lines of credit and credit cards. It’s sickening! We’re no longer free to be generous the way we’d like. We’re no longer free to use God’s money in ways that please Him. Until it’s paid off debt is our master.

We kicked 2012 off with the decision to start the process of getting out of debt.  It’s not easy to take charge of your finances when you’re overwhelmed.  You don’t want to know just how deep the hole is; but if you’re ever going to be free from debt’s shackles this is where you need to start. 

Gather up your statements, your bills, your loan documents, and your IOU’s. Get a sheet of paper and a calculator and sit down at the kitchen table. On the sheet of paper list every creditor to whom you owe money and write down the amount you owe beside it.  Now punch those numbers into the calculator, add it up, and finally face your foe - the total dollar value of your debt.

I understand this is a terrifying process.  When you live in debt for an extended period of time the only way to survive is by refusing to face reality. Right now your stomach’s churning and panic lurks around the corner. It’s OK, take a deep breath.  Half the battle is facing reality.

Now take it a step further - beside each creditor write down your minimum monthly payment. Add this amount up. Beside it write down your total monthly take home income.

Some of you are relieved to see your monthly income exceeds your monthly debt payment. Others feel your heart sinking because that’s not the case. Your monthly debt payment exceeds your monthly income.

At this point I’d recommend seeking help from a professional. There are a lot of good financial counselors who can set up a debt repayment plan or determine if you should file for bankruptcy.  In Canada you might want to check out as a starting point.

I also recommend you visit Dave Ramsey’s website at .  Dave has some great resources to help you get on a budget and systematically tackle your debt. He hosts a daily talk show via podcast giving callers advice on their debt scenarios. You'll learn alot just by listening. You can pick up his book, “Total Money Makeover” or find a church near you offering the Financial Peace University course.

Dave speaks from experience and his advice is sound. I highly recommend his website if you’re looking for a method to stop the debt madness and re-gain control of your finances.

You’re probably feeling discouraged, demoralized, and defeated. So here’s a pep talk. Just because you’ve made some financial mistakes doesn’t mean you’re a worthless person. Even if it comes to the point of bankruptcy God still loves you. Money doesn’t define who we are in Christ and it shouldn’t define who we are as people. Don’t lose your identity just because you’ve lost control of your finances.

You don’t need to be a slave to debt for the rest of your life. Are you ready to break its chains? Share your thoughts by clicking on comments below.

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