You have won a long hard fight, don’t surrender now…Getting free of debt requires breaking the mindset that debt is part of life, and then working a plan that seems to take forever, especially tackling pesky things like student loans. It can be a long fight depending on how intense about it you are, and how deep your debt is. Once you are free, the temptation is tremendous to go borrow again. I know because this is the stage I am in. I could easily afford a car payment now and be driving something really nice, but that payment would cost me far more than the actual dollars. You stay poor and bound by spending money on things that go down in value like cars, and you gain by buying things that appreciate like homes, and investments. Picking up a car payment again would prevent me from continuing on the path to financial peace.
Creating a full emergency fund
Financial peace comes from not living paycheck to paycheck. The thousand dollar emergency fund that you put together was only a temporary stop along the path to getting out of debt. Once you are out of debt except possibly for the house, the next step is to put three to six months of expenses in an account where you get it easily in case of an emergency. This does something in your spirit. When you know that even if something happens at your church or in your personal life, you and your family will have a roof over your head and dinner on the table, something happens deep in your spirit. It frees you to be who and what God called you to be. I am talking about the freedom of knowing that if you wake up in a bad church situation you can just walk away because you know you have three to six months to find a job. You even have freedom to pursue that once in a lifetime opportunity that comes along.
I am currently in seminary while working at a church, and my scholarship will run out long before the tuition does, but with an emergency fund in place like this, I will be able to pay cash for a semester and reload by saving for the next semester as the semester goes on meaning I will complete a master’s degree with no student loans. I cannot describe for you what it feels like to pay cash for stuff and then make the payments I would have made to someone else to myself. You really will not mind sitting down at bill time and paying yourself back. It is not as hard to write that check.
We cannot talk about building for the future without talking about retirement, but how many retired youth workers do you know? Lots of us move on to other things, but what if 20 years from now you could retire and be self supported while you plant a church, or travel the country speaking to students? And I am not talking about the winning the lottery. A clear and determined financial plan really makes these types of career options possible. I won’t waste your time running down different types of investments, but invest. One of the reasons we stay broke is we buy stuff that goes down in value. Without debt you can and should set aside 15% of your income for retirement. Take advantage of your church plan if they offer one. Create your own if they don’t. With no payments you should have plenty of money to do this. Any 20 year period of the stock market has averaged 8-12%. So, that $300 you spent on your car every month becomes $152,466 after 20 years and $351,603 before taxes after 30 years. If instead of two car payments you put in $600 a month for 30 years, you would have over $700,000. Still want that new car? I wish I had known this stuff when I was 21.
With a full emergency fund, the future being saved for, any money left over gives you the freedom to go crazy. Save for a house, new car, new furniture. If you already have a mortgage you could begin to attack it too. You can also give like crazy. Already tithing, and out of debt means you could give far beyond to anything and everything your heart desires.
You may not agree with all this stuff and I have no doubt that some of your friends will think this advice is nuts. You have to ask yourself, “Are you getting your financial advice from broke people?” The person picking this apart is probably up to their eyeballs in debt.
You don’t have to follow this like a new found religion, but have a plan. God calls us to stewardship. There is nothing evil about investing money. How could God use you, if you are self-supported and able to chase after your dreams? How could God use you now, if you were able to focus on ministry and not collectors?
Breaking free of debt begins when you are completely sick of your current situation, and not a day before. You should be angry that banks and retailers have been tricking you into bondage with no interest down, no down payment games. How is your current financial plan working? It is time to spend a little of visionary power you use for reaching students, to make sure you are able to reach them for a really long time.
When you start to think about living in a paid for house, driving a paid for car, and giving and saving like crazy, sitting down and writing check after check to almighty Visa, just doesn’t cut it.
Disclaimer: Money is one of those touchy subjects, but I am writing from experience. I am still in fulltime ministry because of the principles laid out in this series of articles, and I have completely eliminated debt twice in my life. Once when I was single, and again once I got married. It can be done. I was able to drop everything and go to seminary because I was not living paycheck to paycheck. I am writing this article series because I want you to be free to minister wherever God has called you whenever he calls you.
Acknowledgment: Most of the information in these articles comes from ideas and principles laid out in Financial Peace by Dave Ramsey. I encourage you to devour that book if you are serious about changing your financial destiny. I would like to take this opportunity to thank Mr. Ramsey for changing my life forever.