Debt can be a terrifying master, but there are resources to help you break free from debt’s chains.
Debt can be scary, especially when you find yourself drowning in it. Thankfully, The Church of Jesus Christ of Latter-day Saints has several programs intended to help people become financially self-reliant. Here are four steps taught by one of those programs that can help you follow President Gordon B. Hinckley’s counsel to “pay off debt as quickly as you can, and free [yourself] from bondage.”
1. Stop incurring debt. Create a budget to help you cut back your spending and build a three- to six-month emergency fund. This fund will allow you to stop relying on debt. If you’re struggling to control your spending, follow Jeffrey R. Holland and Patricia T. Holland’s counsel to perform some financial “plastic surgery” and cut up those credit cards.
2. Decide how much money to pay toward your debts. Figure out how much extra money you can and are willing to pay toward your debts; then work that into your budget. The more money you pay, the sooner you’ll become debt free.
3. Decide which debt to pay off first. There are two ways to pay off your debts: (1) pay off your debts with the highest interest rate first or (2) pay off your debts with the lowest balance first. Choose the option that’s right for you, and get started.
4. Use the rollover method. Once you pay off your first loan, apply its payment to your next loan. This method will help you get out of debt faster, and before you know it, you’ll be debt free!
As you pay off your debts, there may be times when you feel discouraged, but remember, God is by your side. If you turn to him, he will help you succeed.
Read Chapter 8 of Personal Finances for Self-Reliance to learn more about how to pay off debt and how the Lord can help you accomplish your goal.
—Hannah Charlesworth, Latter-day Saint Insights
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Find more insights
Contact your local bishop to get information about the Church’s self-reliance courses near you.
Listen to or read Gordon B. Hinkley’s call to pay off debt in “To the Boys and to the Men.”
Read or watch “Earthly Debt, Heavenly Debts” by Joseph B. Wirthlin to learn about five more “key steps to financial freedom.”
Gain more insight into finances in “Be a Financial Guru” by Leah Davis.