How to Get Out of Debt—and Even Save Your Marriage
by Phil Lenahan | Source: Catholic.net
Question. My wife and I have been married for 20 years and our finances have been in a shambles from the very start. Our credit card debt has escalated from $8,000 to over $20,000—and it’s not been good for any of us. Can you show us how to escape this bondage?
Answer. If it’s any consolation, know that you are not alone. A survey by David Michaelson and Associates for MasterCard International found that 65% of Americans are buried under excessive debt. Your description of being in bondage sounds similar to Proverbs 22:7, where we read, “The borrower is the slave of the lender.” Excessive credit card debt frequently leads to a host of marital problems and even to divorce. Here is a five step plan that will lead you out of debt and help strengthen your marriage:
Simple Steps To Debt Reduction
1. Attitude is important! Together with your spouse make a commitment to get out of debt. Remember that the problem wasn’t created overnight and it won’t be solved overnight, yet with prayer, a plan, and perseverance, you will succeed.
2. Take the time to determine where you are by giving yourself a financial check-up. Do you know what your assets and liabilities are? How much do you owe creditors and what interest rates are they charging? Do you have a budget? If you need guidance in the area of budgeting, our workbook, Catholic Answers Guide to Family Finances, can help you get started.
3. A portion of your budget will need to be allocated to debt repayment. In your case, $20,000 of credit card debt has been accumulated. Using an average interest rate of 15%, $693 per month would be necessary to pay the debt off in three years. Even at this aggressive rate, almost $5,000 will be spent on interest alone during the repayment period.
Each family’s scenario will be different, but I encourage you to be as aggressive as you can while insuring the basic needs of your family are still met.
4. In order to achieve the most rapid reduction of your debt, choose the highest interest rate loan for elimination first. Make the required minimum payments on all other debts and apply the remainder to the loan with the highest rate. Once this debt is eliminated, select the debt with the next highest rate and follow the same pattern until you are debt free.
5. Celebrate your progress! Put a chart up on the refrigerator and treat your family to a park outing or ice cream cone at periodic milestones.
As you work through your plan, remember the words of St. Ignatius Loyola, who said, “Pray as if everything depended on God, and work as if everything depended on you.” Do your part well and trust in the providence of God for the remainder. God love you!
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