A Letter from June on Financial Freedom
Do you happen to have $50,000 to spare? Most of us don’t. But that’s roughly how much each United States citizen would need to contribute in order to cover the national debt . . . if it were divided equally.1 Add that to the average amount of individual debt in the U.S. ($6,772 per household) and it’s clear: This country—and all citizens in this country—are drowning in an ocean of debt.2
While I’ve never helped a nation find financial freedom, I have helped numerous individuals become financially free over the years, beginning with a most unlikely candidate: my mother’s secretary. I was just in my twenties when “Dana” approached me . . . confiding that she had abandoned all hope of ever getting out of debt.3 Perhaps you recognize the symptoms:
- She could afford only minimum payments on her credit cards.
- She took cash advances from one credit card to make payments on other ones.She paid financial penalties for bounced checks, late payments, and credit card overages.
- She was late on critical payments like her rent and car loan.
- She avoided opening her mail . . . especially the bills.
Please understand that at the time Dana asked for my help, I had never created a budget—for myself or for anyone else. But sensing her utter dismay and feelings of defeat, I earnestly wanted to help.
“Bring me all of your bills and financial information,” I told her. “When your heart is totally dedicated to honoring Him from now on with your finances, God will make a way for you to get out of debt. After all, His Word instructs us to ‘owe no one anything, except to love each other . . . .’ ” 4
Logic told me to begin by helping Dana create a basic budget, making a list of categories and then allocating funds for her regular necessities (food, rent, insurance, transportation, and the like). Then we analyzed her income, comparing what was “coming in” to what was “going out.” On paper there was little left over each month . . . but there was something—a tiny surplus that Dana had considered inconsequential. If she could begin economizing on certain nonessentials, there could be even more.
The steps I used to coach Dana will work for anyone earnestly seeking to get a grip on runaway debt. Since that time I have added other steps that shed a lot of light on how to deal successfully with debt. . . .
- Identify Your Financial Situation
— Take inventory of your assets: What do you own?
What is the approximate value of the things you own (car, house, property, insurance policy—large items)?
— Identify your income:
How much money do you make?
How much time per week do you work to obtain this money?
Do you have any investments?
— Detail your debts: What/who do you owe? When is it due?
What interest rates are you paying on each debt?
— Approximate your monthly bills:
What do you pay for rent/mortgage, utilities, gasoline/transportation, phone, food, clothing, insurance, entertainment?
Keep a log throughout each month of everything you spend.
- Consider Your Lifestyle
— Be introspective:
Why do you live the way you do? For career advancement, to please family, to entertain friends, or to live comfortably?
Were you brought up living this way?
How do your friends, family, and coworkers live?
— Consider what you could do without:
Do you own expensive items you don’t really need that you can sell? Do you pay others to do something that you could do yourself?
Do you eat out when you could eat less expensively at home?
— Look for what you can substitute:
Can you substitute less costly items for those that are more costly?
Can you seek less expensive services for those that are more expensive?
— Reconsider gift giving:
Do you disregard your budget during holidays and gift-giving occasions? Can you give fewer and/or less expensive gifts?
Does it mean that you love your friends and family any less if you live within your means?
Would your loved ones want you to go into debt to buy presents for them?
- Establish Financial Goals
— List future expenditures:
What future expenses do you anticipate?
Do you need/plan to pay for schooling, purchase a home, or replace a car?
— Consider future career changes:
Are you considering starting your own business or serving in a ministry? How will these plans change your financial situation?
— Prepare for family changes:
Are you financing a wedding . . . or expecting a child? Do you have elderly parents in declining health?
— State your future financial goals:
Financially, where do you want to be five years from now . . . 10 years? What are realistic expectations?
- Take Action with Your Finances
— Pay extra on your debts:
Which debt has the highest interest rate?
What amount of money can you pay each month on that debt?
— Stop feeding your debt:
What lifestyle habits are contributing to your debt? (For example, add up the amount you spend on junk food and snacks that have no nutritional value.)
Have you stopped using credit cards and have you started paying cash?
— Change your lifestyle:
What unneeded items can you live without?
What expensive assets can you sell that would be financially profitable?
— Establish a savings plan:
How much money are you setting aside for the future?
How are you preparing for major emergencies and for retirement so that you don’t find yourself in debt again?
— Establish a giving plan:
How much should you plan to give to God’s work?
How much money are you setting aside to help those in need?
Having a written plan helped Dana see that her financial future wasn’t hopeless. Indeed, on paper I showed her how, in a matter of less than two years, she could be completely debt-free. Once she could see the way out of her financial wilderness, Dana’s attitude completely changed. Rather than defeated and hopeless, she became energized and eager to live according to her new plan, knowing that sacrifices along the way would be well worth it.
Dana faithfully followed the budget we had laid out and, sure enough, in less than two years, she had paid off her last credit card. How I remember the sheer joy on her face when she shared the news. She did it. . . and so can you!
To help you chart your path to financial freedom, I invite you to purchase a copy of my Biblical Counseling Keys titled Financial Freedom: How to Manage Your Money—Wisely. This tool offers practical help to find financial freedom, including: “Five Principles of Managing Money,” “How to Cancel Debt,” “Is Tithing for Today?” and much more. With the holidays just around the corner, perhaps you or someone you love could benefit from this practical help . . . especially with the temptation of excessive shopping.
In addition, if you are going to be in the North Texas area on Tuesday, October 16, and/or Saturday, October 20, I would be delighted to see you at our October Biblical Counseling Institute on Financial Freedom. Check our website for details: www.HopeForTheHeart.org/BCI. The conference is free, but registration is required.
For those who have financially supported Hope For The Heart, I thank you from the bottom of my heart. Being a wise steward of your gifts to ensure they have maximum impact is a great responsibility and a priceless privilege. To provide an extra measure of accountability, we are pleased to maintain membership in the Evangelical Council for Financial Accountability (ECFA)—an accreditation agency helping Christian ministries earn trust through exemplary board governance, financial transparency, integrity in fund-raising, and proper use of charitable resources.
My prayer is that we all honor Him in all that we do, including how we manage “His” money!
Yours in the Lord’s hope,
If you’re on Facebook, I invite you to connect with me at www.Facebook.com/June.Hunt.Hope. And if you’re not, take it from me: You’re never too old to start! See you there!