How do you get on top of your finances when you are deep in debt? Apply effective stewardship. Accept you are a manager of God’s resources.

While in debt, it seems you are digging one hole to fill another, doesn’t it? By God’s grace these seven effective stewardship steps might help you navigate this difficult path.

1. Patience
2. Know where you are
3. Slow and steady
4. Follow a specific path
5. Celebrate small victories
6. Get an accountability partner
7. Create a nest egg

Effective Stewardship Needs Patience

Effective stewardship needs patience. You have heard it several times, and it’s true: You got in debt over a period and you need to be patient as you get out of debt. It will take time. You need time to adjust your attitude and behaviour—your lifestyle—away from what caused your debt.

Effective Stewardship Means Knowing Where you Are

To steward resources effectively, you need to know where you are. Do you know everything about your debts? Amounts outstanding, details of interest rates, late payment penalties, repayment options? If you have loans secured by something you own (assets), you need to know repossession triggers. Besides, you should know when your loans are likely to be repaid at current repayment rates.

Knowing precisely where you are is the first step to accepting where you are. When you accept where you are, you will develop a firm foundation to move ahead.

Effective Stewardship is Slow and Steady

Don’t go for the touchdown or home run based on gimmicks you read or heard. You might see a TV commercial telling you the company can lower your debts and get you debt free quickly. If it’s too good to be true, it’s not true. Many charlatans will tell you getting out of debt is simple with their systems. It’s not! You must adjust your lifestyle, lower spending, and make tough choices.

It’s essential you note that direction is more important than speed. As long as you are heading in the right direction, don’t worry about the speed. Focus on progress, not perfection. Be steady, but be lenient with yourself. Understand that humans make mistakes. Keep in mind this quote from Thomas Edison: Many of life’s failures are people who did not realize how close they were to success when they gave up.

Effective Stewardship Follows a Specific Path

Effective stewardship requires a dedicated path. Identify a get out of debt path you are comfortable with and follow it. Several exists and have their supporters. Here are three I have seen folks follow successfully:

1. Tackle the smallest debt first
2. Start with the highest interest rate
3. Consolidate  all your debts and pay one amount monthly

Whatever you do, you need to work in a budget that fits your income and lifestyle. Details will depend on your situation.

How do you choose a path? Pray, ask the Lord to lead you. Not one of these is perfect. I prefer the second option as it lowers total debt fastest. Numbers one and three are popular. Even so, I think the consolidation approach could be the worst. This path could lead to more debt unless you deal effectively with attitude and behaviour issues that caused your debts. If you don’t, you are likely to fall deeper in debt in a couple years.

Still, for each option, the key question on the way out of debt is the same. Do you (and spouse) believe you have dealt with attitude and behavioural issues that led to your debts? If you do, choose the option you understand are most comfortable with. Your commitment to the process is essential. That’s why the chosen path does not need to be lowest cost or most popular.

Effective Stewardship Celebrates Small Victories

The goal is your destination. The plan is the steps to do each goal. Set weekly, small steps for each goal. Simplify each step. More frequent steps are better than few huge steps. Tiny, daily gains trump a giant weekly leap. Record and celebrate these daily, small successes.

What does this look like in practice? You might have a goal to reduce loans by $1000 by the end of the month. Create multiple steps to do this, such as monitoring eating out daily, monitoring internet buys daily, and so on. Celebrate each success.

Effective Stewardship Needs an Accountability Partner

You will have up days and down days. You will feel like giving up. These are times you need someone you respect and trust to help you stay motivated and on track.

It’s important you select the right person. Someone who won’t judge you. Someone who can empathize with you. A person who realizes that like him or her, you are an imperfect human. As you journey, recall these words from the Parable of the Talents: ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ (Matthew 25:23).

Effective Stewardship Includes Creating a Nest Egg

I left this for last as it is more involved and will require more consistent thought and application. Yet, it is just another challenge on this journey. How will you deal with emergencies that will crop up? You won’t have savings. You won’t have available credit.

This period is an excellent opportunity to understand differences between wants and needs. To start the journey, I am confident you will find a spending fast helpful.

I realize that while in debt, you will have no extras to save. Along the way, ponder this Warren Buffet quote: Don’t save what is left after spending; spend what is left after saving. Decide to start a capital fund, a nest egg, an emergency fund.  It is important you set aside a predetermined amount to this fund regularly before you allocate funds to spend.

You can set up the fund target amount arbitrarily, such as at $500, $1000, or other amount. However, I prefer a careful look at your circumstance for likely unpredictable expenses in the next two years. You will have to use estimates. That’s normal. If you have a car, consider it’s age, maintenance records, age of tires, and so on. This will guide you to the specific risk exposure, so you can develop a realistic amount to set aside. Look at other areas in a similarly.

If you own a home, depending on your situation, pray about how to use it in the process. I do not recommend a second mortgage to eliminate credit card loans. Still, pray about selling your home to repay loans, and starting over. Don’t do this emotionally, but let the Lord guide you.

The first step to effective stewardship as you build a nest egg while in debt is patience.  You need to lean on the Lord. You will not be able to cover all emergencies, and you might need to seek help periodically. That said, ideally, if you have high cost credit card debt, pay them down before starting the capital fund.

Finally, understand that getting out of debt means lifestyle changes, and  under the Lord’s guidance, everything is possible for Him who believes (Mark 9:23).

(c) 2015, Michel A Bell

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