Lern how to come out of debt and to stay out forever.

We have talked about how to come out of debt, but, it is not enough to just come out, you need to stay out. To do so, you need to take five measures:

First measure: Establish a no-debt policy. You may want to make this, one of your money values. To achieve this, you will need to establish some tough measures: 1) stop all borrowing and credit; and 2) stop spending more than you earn- be proud of living within your means. You cannot get to zero debt with a continued culture of borrowing and overspending. It is impossible to control spending without an effective income and expenditure plan. Always plan ahead.

Second measure: Save and invest for expected future needs such as education, child birth, wedding, car repairs, holiday, extra giving, retirement, etc.

Third measure: Set up an emergency fund without which unexpected financial interruptions such as sickness, job loss, etc will push you back into debt. Aim at building a fund equivalent to at least three months worth of expenses.

Fourth measure: Trust and be creative. For capital intensive projects, go creative; think partnership, joint venture, leasing instead of owning, and so on. Also, purpose to trust God to provide what you need debt-free.

Fifth measure: Be debt-wise. God’s own wisdom advises you “Not to be a man who strikes hands in pledge or puts up security for debts because if you lack the means to pay, your very bed will be snatched from under you” (Prov 22:26-27). He also warns you to “Not put up security for another because you will surely suffer for it. Instead, refuse to strike hands in pledge and you will be safe” (Prov11:15). He shows you that “Striking hands in pledge and putting up security for your neighbor amounts to lack of good judgment” (Prov 17:18).

Never borrow money for speculative investments. However, you may borrow money (if you must) for guaranteed opportunities such as financing a business tender. Over the long term nevertheless, I advise that you aim at developing what I call “opportunity savings”.

SOURCE-NAWIRI.ORG