What Is a Good Strategy for Debt Repayment?


Until we know WHY we are in debt, it will be nearly impossible to stay out of debt long-term.

We all feel the weight of debt when we are seeking financial freedom.  Paying off debt is doubly harder than getting into debt, because we must stop spending by the amount we were overspending, and then we must decrease our spending even more in order to pay off the debt that we are in.  It reminds me of dieting.  The only way I have ever had a successful diet was to have a good mix of a successful strategy, a disciplined attitude, and a reward in sight.

The most critical part of a successful strategy is understanding the underlying cause of debt.  Is it lack of self-discipline?  Is it unemployment? Is it medical demands? Is it poor budgeting?  Is it unexpected home or car expenses?  Obviously, some of those symptoms are much easier to eradicate than others, but until we know WHY we are in debt, it will be nearly impossible to stay out of debt long-term. I strongly encourage you to work out the “why” behind your debt and seek help in eliminating the root cause.

Beyond the “why” part, having a strategy in place means that you know WHAT you are going to do to reduce your debt.  If you roll all of your debt into a home equity loan, commit ahead of time to how much money you will put toward paying it off each month.  If you use the “snowball” approach to debt reduction, then continue to apply the same dollar amount to your debt each month, beginning with the highest interest credit card first.

A disciplined attitude is a daily decision.  Jesus prayed, “Give us each day our daily bread” (Luke 11:3), recognizing the incremental nature of life and the fact that we face the same needs and many of the same decisions each and every day.  So if you are disciplining yourself to spend less that discipline will be a daily one and God’s sufficiency in it will be a daily one.  If you are disciplining yourself to take a second job, the discipline will involve daily commitment and God’s sufficiency will be daily for you.

Finally, I have found that having a reward to look forward to is critical when I am undergoing lifestyle changes.  The intrinsic reward of getting out of debt is huge.  When you have no debt, you are free to spend money on giving or lifestyle choices, or to save for other things.  Freedom is a gift.  But, it is also nice to build in unique rewards that will motivate you.  Whether that reward is dinner out with your spouse, or whether it is taking a day off work to be with your kids, it is a great idea to define the rewards you will give yourself when you reach milestones toward your goal.

If you are embarking on the journey of becoming debt free, may I commend you for doing something that is counter-cultural and brave.  My prayers are with you as you develop your strategy and execute your plan!

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