Christian Financial Advice and Biblical Stewardship

How to Get Out of Debt and Stay That Way

How to Get Out of Debt and Stay That Way

Editor's Note: The following is a report on the practical applications of Mary Hunt’s new book Debt-Proof Living: How to Get out of Debt and Stay That Way (Revell, 2014).

Financial debt places a huge amount of stress on you. When you owe more for your purchases than you can afford to pay, you struggle with anxiety in every part of your life. Debt also wastes your God-given money, time, and energy that you must spend dealing with it, which limits how much you can pursue God’s plans for your life.

When you’re struggling to pay your bills, it’s tempting to think that simply having more money will solve your problem. But the problem isn’t that you don’t have enough money; it’s that you don’t know how to successfully manage the money you already have.

Here’s how you can start managing your money well so you can enjoy a life free from the burdens of debt:

Set a goal to debt-proof your life. Decide to work toward the goal of living a lifestyle that doesn’t depend on consumer credit. Commit yourself to this goal: Establishing and following a spending plan that will help you make sure you never again spend more money than you earn, consistently living on 80 percent of your income while giving 10 percent and saving another 10 percent, eliminating all unsecured debt from your life by repaying it as rapidly as possible, setting up a contingency fund that contains at least $10,000 to pay for emergency expenses, and establishing a “freedom account” to pay for irregular expenses on a regular basis.

Learn the difference between intelligent borrowing and stupid debt. There are some situations where it’s fine to borrow money, as long as you carefully limit your risk when doing so and plan to pay back the loan as soon as possible. Intelligent borrowing has a fair way to get out of the agreement, is secured with collateral, is for something that has a life expectancy of more than three years and will increase in value (so you won’t be paying for a purchase long after it’s no longer useful to you, or paying more for something than it’s worth), and has a reasonable interest rate for the loan. Stupid debt falls short of those standards. From this point on, exercise caution when borrowing money. Eliminate all of your credit cards except for one (and pay the balance on it off in full every month); pay off your mortgage as early as you can; and avoid student loans, car loans, and home equity loans.

Track where your money is going by creating a monthly spending record. Create an accurate record of how you spend your money by tracking every purchase you make – whether big or small – throughout each day for one month. Add up total amounts for individual categories that reflect how much you’ve spent on each category during the month. Once you have the information, study it and pay attention to the spending patterns you notice. How is money leaking out of your life in ways you hadn’t previously realized? You may be spending much more on fast food or coffee than you’d known before, for instance, or you may be startled to see how much you’re actually paying for clothes or electronics purchases. Now take your detailed monthly spending record and compare it to your average monthly net income. Are you spending more than you earn each month? If so, what’s the spending amount that exceeds your income? How can you start to reduce your expenses so that you spend less than you earn every month? What are some expenses that you can eliminate?

Create a contingency fund. Set aside money to cover emergencies like medical bills and car repairs that come up unexpectedly. Instead of using credit to pay when such expenses confront you, you can draw upon your contingency fund to pay without accruing any new debt. Set aside whatever amount (usually at least $10,000) you’ll need to pay your bills for three months in case you lose your job or can’t work for a period due to an illness or injury.

Follow a rapid debt-repayment plan. Pay off your debts as quickly as possible, by: avoiding any new debt; paying more than the minimum amount due every month on each of your existing debts; and eliminating your debts in order, paying off the one that has the shortest pay-off time first and then working your way down to the one that has the longest pay-off time. As you pay off each debt, redirect the amount of money you would have used for that payment to paying the next debt in line.

Establish a freedom account. Open a savings account that’s specifically designed to cover irregular expenses – such as quarterly insurance premiums and property taxes, Christmas and vacation costs, and home appliance replacements – so you won’t have to rely on credit to pay for them. After making a detailed list of every expense you can think of that doesn’t recur on a monthly basis, add up the estimated costs in each category and then reach an estimated total projected annual expense for your irregular expenses. Then, divide that annual number by 12 to reach an estimated monthly total, and set up an automatic deposit every month into your freedom account to cover that amount. When you eventually have enough money saved in your freedom account, it can replace your contingency fund.

Create and follow a monthly spending plan. Set up a plan to follow every month for each category of expense you have, including giving, saving, and investing. Plan to spend less than the amount of your income every month. At the end of each month, write down how much you actually spent in each category, note how it compares to the planned amount, and adjust your spending plan to do a better job the next month of spending less money than you earn.

Ask the Holy Spirit to renew your mind so you can adopt healthy attitudes about money. Pray regularly for the Holy Spirit to help you think about money from God’s perspective, which will give you the wisdom you need to replace previous, unhealthy attitudes that had contributed to your debt problem. Pray for the courage you need to keep making smart financial decisions that will lead to the freedom God wants you to enjoy.

Adapted from Debt-Proof Living: How to Get out of Debt and Stay That Way, copyright 2014, 2005, and 1999 by Mary Hunt. Published by Revell, a division of Baker Publishing Group, Grand Rapids, Mich.,  

Mary Hunt is an award-winning and bestselling author and the founder and publisher of Debt-Proof Living. Her books have sold more than a million copies, and her daily newspaper column, Everyday Cheapskate, is nationally syndicated and enjoyed by hundreds of thousands of readers. Hunt speaks widely on personal finance and has appeared on shows such as NBC's TODAY and Dr. Phil. She and her husband live in Colorado. Learn more at

Whitney Hopler, who has served as a contributing writer for many years, is author of the Christian novel Dream Factory, which is set during Hollywood's golden age. Follow her on Twitter @WhitneyHopler.

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