A quick search on BibleGateway.com for the word “debt” reveals over twenty verses containing it. The word “loan”, another six, many in the old testament.

The concept of loaning and repaying money is nothing new. Credit Card companies simply took this ancient concept and made it all too convenient to borrow large sums of money for instant gratification. But in the Old Testament, debts among the Israelites were forgiven every seven years. (See Deuteronomy 15)

God did not want His people to live in the bondage of debt on a long term basis. Today, one can declare bankruptcy as a last resort to escape massive debt, but the consequences of this decision have a lasting effect on the debtor. And the years leading up to such an escape are likely filled with stress, endless bills, and phone calls from creditors. This is not what God desires for His children.

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law. Romans 13:7-9

So how do we keep this command?

Perhaps if I had learned sooner what the Bible teaches believers about finances, including debt, I would have avoided the credit card trap. But it was actually over three years after becoming a Christian until I investigated this important topic with my husband.

Don’t wait. The Bible is filled with detailed instructions for handling our money. Join me as we further explore this topic here on the Faith & Finance series.

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The following is a guest post from Mandy of Pennies and Blessings.

Falling Prey to Debt

When my soldier husband returned home from Iraq the last time, it was right about the time our economy came to a screeching halt. As is normal for a soldier returning to civilian life after time at war, he received additional pay from the military for a short time while he looked for employment locally. However, the Army paychecks ran out, there was still no job, and my part-time income certainly was not enough to keep us afloat financially.

As a family of five, we had a brand new car and home – with absolutely no significant income, despite our best efforts. Although we knew the financial principles taught by Dave Ramsey and others, at this particular point for us it seemed there was no other option but to rely on credit cards to survive. We used our credit cards to pay the utility bills, to buy our necessities, to keep insurance on our property, vehicles, and even our children. Out of sheer desperation, we eventually turned to food stamps to purchase our groceries each week.

Meant to be a short-term solution, we planned to pay the cards off as soon as Hubby found work again. That’s what we told ourselves at three months… again at six months… and again at a year into these circumstances. When Hubby did find work, the salary, even with unbelievable hours of overtime, would only pay our house payment and van payment each month, which meant we were still using credit cards for our basic expenses.

After being virtually debt-free, we were now swimming, DROWNING, in it! Between the credit cards and personal loans, we were buried in $20,000 of debt – nearly overnight. We were so close to living the life God intended – “owing no man” – and are far from that now.

During that time of unemployment and incredible struggles, I was introduced to the world of blogging, and many money-saving and couponing sites. Quickly I learned how to work the coupon match-ups and store rebates, stockpile for months in advance, and have with very little out-of-pocket cost. This cut our monthly expenses by over 40%.

Freezer cooking has been an amazing discovery as well! Keeping meals stockpiled in our freezer has cut out the temptation to just run out and “grab something quick.” Menu planning now limits my need to run to the store multiple times a week. In fact, I don’t even grocery shop more than 2-3 times a month now, except to buy necessities such as milk, bread, and eggs.

By drastically reducing our expenses this way, it allowed us to focus more of our budget on our debt. Since hubby took an active duty position last September, we have thankfully been able to pay off six credit cards and one personal loan, totaling approximately $10,000. $10,000!! Aside from our house and our cars, we are now at the halfway mark for climbing up out of this pit!

There are others out there just like us. Other families have fallen prey to debt even after the greatest laid plans. As discouraging as it can be, know there are ways out of that pit! Make a new plan. Reach out for help from others who have been there. Work toward new goals. And don’t give up hope!

Mandy is married to her hero and best friend after a miraculous reconciliation, and is learning to embrace the life of an Army wife and mother of three.  She holds a bachelor’s degree in Psychology and Counseling and has worked in a variety of fields – all of which contribute greatly to her writing at Pennies and Blessings and Brokenness into Beauty.

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Exactly two years ago this month, I made a big announcement. Our final credit card had been paid off completely after years of living with consumer debt. I have to say, I am so glad I publicly shared that success.  It has kept me accountable over the last two years.

Some people can manage credit cards effectively, racking up rewards points and paying off the balance each month. I am not one of those people. My husband is not one of those people. Occasionally, an offer letter will arrive in the mail or that friendly cashier at JCPenney will ask if I’d like to “save” on my purchases by opening a line a credit.

The old me would likely hesitate. Maybe even pause for a moment to consider it. But today, my readers are my accountability partners. I can firmly and confidently decline a new credit card without reserve.

Have there been temptations?

Of course. We recently moved into a larger home with our growing family and the addition of my sister to the mix. Financing a new sofa or rug would be so convenient.  Instead, we paid cash for those. There are other items on my “wish” list. Items that can wait.

In the meantime, we continue to enjoy a life without credit cards. The first few years of our marriage saw lots of plastic. Reflecting now on the last two years without them, I see major differences in our family life.

To name a few:

• Less mail: Far less paper clutter comes into our home without credit cards bills.
• Better sleep: New babies aside, we honestly sleep more soundly without debt hanging over us day and night.
• Fewer payments: This is rather obvious, but just having the basic bills to pay each month saves time and hassle over making payments.
• No surprises: When purchases are made, they are carefully planned and researched. There is no spontaneous splurge with a credit card.
• Less uncertainty: We no longer question how we are going to pay for emergencies, or even our upcoming (frugal) family vacation.
• More giving: Without hundreds of dollars going towards credit card bills every month, we have been able to be far more generous with our finances.

Two years later, I can look back and realize the peace that paying off that final card brought to our lives.

If you are struggling with debt, read how we stayed motivated by using visuals.

Note: In the spirit of full disclosure, my husband does use one company credit card for travel and business expenses as is required by his employer. But thankfully this is never part of our family finances.

Linked to: Frugal Friday

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One of my blogging goals this year was to write more about debt.  I have shared a bit about my debt history, but since everyone’s journey looks a little different, I wanted to share with you a fellow blogger’s perspective. The following is a guest post from Shelly of Coupon Teacher.

I am guest posting on Keeping the Kingdom First today to tell you my debt story. I am sharing it with the world for the first time, because I am still a little ashamed of how we got ourselves into this mess. This story has a happy ending, but let’s get the background first.

Imagine two young in love newlyweds. Now imagine those newlyweds moving 5 hours from any family. Next assume those two newlyweds have entry level jobs as a teacher and survey assistant. Now you know where I was in fall of 2003: the year hubby and I dove into major debt.

In the fall of 2003, I was accepted to graduate school, and hubby was going to get a second associate degree. Sure, our jobs paid for some of the tuition, but what about the rest of the tuition, books, gas, and meals eaten on the go? Welcome Citibank into the picture.

Now I am not sure how someone can go from no credit card debt to five figures of debt in a year, but we somehow managed it. (If you are reading th,is mom or MIL, breathe, we are okay).  Not only did we manage it, somehow we got approved for a mortgage on our first home in the spring of 2004. School expenses, home remodeling, and traveling to visit family once a month. You can see where this is going…

By the summer of 2005 when we both graduated, we were $XX,XXX in debt! I am sorry. I just can’t stand to fill in those X’s. It is too embarrassing still for me. The worst part of all was that Citi kept raising our interest rates, although we were paying on time and more than the minimum. This went on for over a year, and instead of shrinking, our debt kept growing.

We felt hopeless.

We had to so something. We prayed each night for a way out of the mess we had created.

That was when someone introduced me to the Grocery Game (yes, Alyssa would be proud). I started saving quarters and dimes using coupons. Then my savings grew. Before I knew it, I had a stockpile, and we were no longer living paycheck to paycheck.

We still had the Citi problem, so we transferred our HUGE debt to a low fixed rate personal loan (I know Dave Ramsey would cringe, but it has really worked for us). Then we started to pay. We would save on groceries and pay the loan. Saving, Paying, Saving, Paying.

I quit the Grocery Game (sorry Alyssa), and I now do my own coupon matchups to save money. But the principles of couponing and the message of being frugal I learned stayed with me. As a matter of fact, I am now teaching others. I will be the first to admit, we still make money mistakes. We have gone on vacations we shouldn’t have, and we have blown money on silly things we shouldn’t have. But my message to you is that there is hope for those of you in this situation!

In the last three years, we have reduced our debt by about sixty percent!  By the end of this year and maybe sooner, we will no longer owe any balance on the personal loan. Next we will be working on paying off our house and cars. I have learned so much about how to be a better wife, steward, and teacher along this path. God works in mysterious ways, doesn’t he?

Shelly is a full-time fourth grade teacher and blogs at Coupon Teacher. She wants you to share and celebrate your successes with her, and she may give you a few tips along the way!

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Mandi of Organizing your way is sharing 31 Days of Organizing for a Better 2010 all month long. Today she is tackling the topic of debt, a subject that really gets my blood pumping. Seriously. She asked me to share a bit of my personal experience in that area and I gladly agreed!

My husband and I began our journey out of debt in the fall of 2007 and haven’t looked back since. Our finances had become unmanageable, and we knew that we had to make a major change. We paid off our final credit card in July of 2008. There were several key factors that contributed to reaching our goal so quickly.

• First we drastically cut our spending by adopting a frugal lifestyle and learning to use coupons effectively.
• We then amped up our income in order to apply Dave Ramsey’s principal of the “debt snowball“. My husband took a second job and I began working at a preschool part-time.
• We followed a detailed monthly plan for paying off each credit card, beginning with the smallest debt and finishing with the largest.

One tool that was extremely helpful in staying motivated was a visual of our debt reduction plan. Although we had a sophisticated excel spread sheet set up for us by a financial advisor, we also opted for simpler method- a white board.

This white board hung in a prominent spot in our home to serve as a constant reminder of our debt and our goal. We updated it every month to stay on track. It looked something like this:

*I pulled these numbers out of my head as an example

Average households in America actually carry an average of $8,000 in credit card debt. Gulp.

As you can see, we listed all of our credit card balances on the board from smallest to largest, along with the minimum monthly payment for each one. The farthest column on the right detailed the actual payment for the month. So the following month would look like this:

*I did not factor in interest

Rather than erasing the card we paid off, we put a big red line through it, with gusto! The psychological impact of this gesture was huge. We could see our progress, and it motivated us to continue our plan with fresh intensity each month.

*The total monthly payment stays the same each month

While this method is a bit unconventional, it was exactly what we needed. You see, the reason our credit card had gotten so out of hand, is because we were simply in denial. We avoided opening the mounting bills, and were unsure of exactly how much we owed.

By laying it all out in the open, there was no more hiding from our debt. It was staring us in the face and was not going anywhere unless we stuck with the plan.

Eventually, the white board looks like this:

All those zero's feel great!

Each month, the actual payment stays the same, although everything else is changing. The balances start shrinking faster and faster, and the intensity picks up, hence the term “snowball”.

Only 1 card left!

All those red lines served as a reminder of how much we had accomplished. Because paying off debt is not about math. It is about behavior.

Another key factor in our journey was applying the principals found in God’s Word. We learned, for the first time, what the Bible says about money. Once we decided to start honoring God with our finances, getting out of debt became top priority.

My husband and I are not completely debt free. We have a mortgage, and student loans which we are currently paying down. Writing this post was a fantastic personal reminder for me about how effective that simple white board really was. On my to-do list this week is a freshly updated board with those scary numbers.

For more inspiration, read why FishMama wants to live debt free.

Be sure to visit Organizing Your Way, as Mandi shares her tips for paying off debt.

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It’s pretty much inevitable. You are out shopping this time of year at a major retailer, and after your total is announced, you hear this next:

“Would you like to save XX% today by opening a [insert name of store] card?”

I always know when it’s coming. The cashier is smiling sweetly, and hoping you say “sure!”

They are simply doing their job, I get that.  They are likely trying to meet a quota, perhaps for a bonus. I always politely say “no thank you” and proceed with my transaction.

Sometimes, they succeed, and I cringe see others getting that instant approval victory. But the promise of saving 10 or 15% is likely an empty one.

Why should you say no?

A recent poll conducted by Consumer Reports found that about 12 million Americans had not paid off the previous year’s holiday shopping bills.

So the fact is, most consumers do not end up paying off their holiday purchases before they get hit with ridiculously high interest rates of 18% or more. In order to avoid any interest fees on a December purchase, the balance would need to be paid in full with the January billing statement.

But what if I pay it off?

I am sure there are some that will. In that case, you did just save the promised amount. But now you have a new line of credit, more mail every month, and the temptation to use that card again.

Retailers seem to be really pushing the instant credit option this year. With money tight for many families, and the lure of all the hottest deals and latest and greatest electronics, they take advantage of the human desire for instant gratification.

I am sure even the most diligent savers and budgeters will be tempted to spend “just a little more” than they planned this year. Especially in this final week, when stores are making their biggest push for those last-minute spenders. Store credit cards and the deals they promise are actually a lure to get you to spend more than you intended.

Just say no.

Shop online if you must, from the comfort of home to avoid that friendly cashier. Go over your gift list and make sure you have not forgotten about any previous purchases. Remember that Christmas is not about the gifts, and where true riches are found.

One less credit card is one more step towards financial freedom.

Disclaimer: I am not a financial expert, I am just a mom who has experienced the pitfalls of instant store credit first-hand. {stepping off my soap box now}

This post is linked to Works for Me Wednesday and Frugal Friday.

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With the ever growing problem of identity theft, it is so important to keep tabs on your credit history. In addition to Credit Karma, there is a brand new free service for those wanting to view a quick snapshot of their report.

I decided to check out credit.com myself, to see if it would be worth recommending to my readers.

What is the Credit Report Card?
The Credit Report Card is a completely free financial literacy tool that shows you a snapshot of your credit reports and estimated scores according to the leading scoring models used by lenders. It breaks down your credit report into five simple-to-understand categories and gives you a letter grade for each one.

You can request your free report card every 30 days. This has no effect on your score, since this is a “soft” inquiry. Your data is completely secure, and never sold to lenders.

Instead of a number score, credit.com gives you a letter grade, from A-F. It gives you the option to pay for a full report upgrade with monitoring, which I do not feel is necessary. With all the free tools available, you can certainly monitor your own credit throughout the year.

But I do like the quick, simple view that credit.com offers.  Here was my result, as an example:

I got an “A”, pretty cool, huh?

On a side note, my personal philosophy about credit scores is that they are far less important than what is contained within your report- DEBT. The first step towards getting out of debt is knowing how much you actually have.

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The following is a guest post from Amy of The Finer Things in Life.

Keeping the Kingdom First. If we kept that phrase at the forefront of our minds as we go about the business of our days, what might we do differently?  Say differently?  Think differently? Spend differently?

When it comes to our finances, there are many ways to Keep the Kingdom First.  Here are a few to get the wheels a turnin’.  

1. If you don’t have it, don’t spend it. Purpose to purchase with only the money you have, not the money you plan to have someday.  Live within (or below!) your means.  Debt negatively affects our relationships, our marriage, our ability to make decisions.  Avoid debt like the plague.

“Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.”  Romans 13:8

2. Give. Each and every one of us has something to give.  Some of us can give much monetarily, others have talents to share.  Still others, time.  It’s true:  “Tis better to give than to receive.”  Even when you have little, don’t be afraid to give.  Your generosity will be returned.

“Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”  2 Corinthians 9:7

3. Cultivate gratitude in your home. No one wants to raise a greedy, ungrateful child (or be around one).  And the children… they learn from us!  Give thanks – for your home, your food, the weather… for all of God’s provisions.  The more you give thanks, the more you’ll realize what you have and what you don’t need.

“Give thanks in all circumstances, for this is God’s will for you.”  1 Thessalonians 5:16-18

In what other ways can we Keep the Kingdom First with our finances?

Amy is a Tiny-Town wife and mother, convinced that The Finer Things in Life provide more lasting joy than anything money can buy.

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Hey, Dave fans! Starting 9/9/09, Dave is giving away a starter Emergency Fund of $999. Enter for your chance to win every day through September 18th.

I have never actually seen Dave giveaway money, and I think this is a great way to spread the word about the importance of having an emergency fund.

If you are not familiar with Dave’s common sense advice, read about my experience at his live Total Money Makeover Event last March.

The Dave Ramsey online store is also offering a fantastic Labor Day Sale — all of his books, CD’s and DVD’s are on sale for only $9.99 each!  Shipping is free on orders of $65 or more.

I recommend stocking up on The Total Money Makeover at this price. They make excellent wedding gifts or Christmas gifts, and read why The Happy Housewife thinks they should be required college reading material.

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You know those awful commercials for freecreditreport.com (link purposely excluded). They sure get your attention, right? Turns out, it is not really free. At all.

Check out the fine print:

“IMPORTANT INFORMATION
When you order your free report here, you will begin your free trial membership in Triple AdvantageSM Credit Monitoring. If you don’t cancel your membership within the 7-day trial period**, you will be billed $14.95 for each month that you continue your membership. ConsumerInfo.com, Inc. and Freecreditreport.com are not affiliated with the annual free credit report program. Under a new Federal law, you have the right to receive a free copy of your credit report once every 12 months from each of the three nationwide consumer reporting companies. To request your free annual report under that law, you must go to www.annualcreditreport.com.”

And of course, they require a credit card upon sign up. Boo, hiss.

Thankfully, there are alternatives. While I don’t believe a credit score is terribly important (Dave Ramsey fan, here), I do think it is wise to monitor your credit regularly. Identity theft is all too common to ignore what could potentially pop up on your report.

I recommend 2 resources for 100% free, 100% safe credit reports and scores.

The first is thanks to a Federal Law: www.annualcreditreport.com

This helpful site gives you access to all 3 credit bureaus one time per year. You can space them out every 4 months for better monitoring. This will give you detailed information about all of your debt, accounts, and/or collections. What is does not give you is a score. That will cost you.

This is where my second recommendation comes in handy: CreditKarma.com

I was skeptical of Credit Karma for a long time. However, I noticed several other personal finance bloggers recommending it, so I gave it a shot. Credit Karma provides its users with a credit score, and some basic info about your debt. There is no credit card required, and no strings attached. It is completely free. How, you wonder?

Very simply– ads. From their website:

“How can this be free when other services charge people?
Our free credit scores are sponsored by partners who share our vision that consumers should have free and regular access to their score.
With that said, rest assured that Credit Karma will never share your information with third parties or even our partners without your explicit permission. Our privacy policy has been reviewed and approved by TRUSTe, an independent third party, to ensure your privacy is strictly protected.”

While there are many ads on Credit Karma, you can simply choose to ignore them and check your score.  A common misconception is that checking your credit can lower your score. Not the case when you are the one checking it.

I decided to check mine today just out of sheer curiosity.  Since my husband and I paid off all of our credit card debt last summer, I wondered how this would impact the score.  Just as I expected, it was actually lower than I remember it. A high credit score typically results from frequent use of credit.

Yes, cutting up all your credit cards, paying them off, and closing your accounts will actually lower your score.  And that is just fine with me!

“Debt is normal. Be weird.”

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