FPU Week 4: Dumping Debt

Dave Ramsey's class this week talked about four topics when dealing with Debt.  Those topics include defining debt, debunking myths, why we should get out of debt, and how we can get out of debt.  In this blogpost I will cover some of the key points from each topic.  If you want to get even more detailed information about one you can contact me using the link on the left-side of the blog.

What is Debt?
During the lesson we learned that debt has been marketed so well in our culture that we beg to be sold their product.  Dave says, "to even imagine living without it requires a complete paradigm shift."  Debt is any money that you owe to anyone for anything.  Types of loans include credit cards, student loans, car loans, home equity loans, mortgages or anything else you don't spend cash on.   The Bible is full of warnings about debt and there is not one passage about God using debt to bless his people.  As a Christian, it is important for us to realize that we cannot serve two master's and that "the borrower is the slave of the lender" (Proverbs 22:7b).


Debunking Myths

1. You do not need a credit card to rent a car or make online purchases, your debit card can do that. 
2. When you use a credit card you spend more than you do when you spend cash, which is why stores are willing to give you discounts for using their credit card. 
3. Car payments do not have to be a way of life, you can choose not to have a car payment and make your money work for you. 
4. According to, "Consumer Reports, SmartMoney magazine and a good calculator will tell you that the car lease is the most expensive way to finance and operate a vehicle."
5. You cannot get a good deal on a new car, they lose about 60% of their value in the first four years.  
6. "It is stupide to guarantee someone else's loan" (Proverbs 17:18).  Meaning you should not cosign a loan!
7. Debt is not a tool that should be used to create prosperity.  75% of the Forbes 400 surveyed said that "staying debt-free was the number-one key to wealth building".

The Reasons to Dump Debt
Other than the Bible warning about using debt there are many reasons why we should consider getting out of debt.  Think about how much you could save, invest, blow and give if you have no payments.  All of us could have many different reasons for why we would want to get out of debt.  The number one thing people on my blog's facebook page said they would do if they were debt free was saving for their kids or grandkids college.  One of the things that our family is looking forward to is being able to give more to our church and others in need, make sure William is able to go to college debt free, retire with dignity and have some fun traveling.

How to Dump Debt
The number one key to getting out of debt is to get mad about your debt.  Proverbs 13:12 says that, "hope deferred makes the heart sick, but when the desire comes, it is a tree of life."  We need to get out of the stage of hoping to be debt free to get the passion and fight behind our desire to be willing to make the sacrifices needed to pay the price to get out of debt.  Dave Ramsey says that it takes "Gazelle Intensity" that he gets from Proverbs 6:1-5.  As Dave Ramsey is famous for saying, "In order to live like no one else, you have to live like no one else" now.  After you are ready to be "Gazelle Intense" and here are the steps that Dave Ramsey uses in his Financial Peace University:

1. Stop borrowing more money!
2. You must save money.
3. Sell something. 
4. Get a part-time job or overtime.
5. Prayer really works.