Torch, Spring/Summer 2009

22 TORCH | Spring–Summer 2009 as well. Being accountable to a trusted friend or financial advisor can also make the spending plan real and achievable. Plan for an Emergency Sounds oxymoronic doesn’t it? While we don’t know when emergencies may occur, life happens — complete with unexpected events. The car will need a repair, the washing machine will need to be replaced, and items will wear out. Begin now to build a minimum of three to four months of living expenses in readily available, liquid savings. A sufficient nest egg keeps an individual from having to use debt to cover those emergency costs. Communicate About Money Management Make sure someone knows how to access your financial information in the event of an emergency. Also, have a current will in place. These steps will enable that person to conduct financial matters in your absence, whether temporary or permanent. A trusted advisor can be very helpful in this regard as well. If you are married, you should communicate and ultimately agree on major financial decisions as a couple. A marriage relationship is of much more value than any individual monetary resolution. Often the challenge in these discussions is not the money itself but the values and beliefs underlying the issue of money. Couples should strive to communicate honestly and work together on a common challenge. Get Out of Debt One element that has amplified the severity of the current economic condition is the use of credit — borrowing money rather than utilizing one’s own funds. Borrowing obligates the borrower into the future and can limit his or her choices. Truly, “the rich rule over the poor, and the borrower is servant to the lender” (Prov. 22:7). Agreeing to pay a debt is akin to making a financial vow. And Scripture instructs us to be very careful about the promises we make against tomorrow (Prov. 27:1, James 4:13–17). First, pay off debt as much as possible, starting with any high-interest consumer debt. Dave Ramsey has a concept called the “debt snowball.” He suggests listing all debts and looking at their total balances, minimum payments, and interest rates. As you make your required monthly payments, use extra money to pay off the smallest debt first. Once that is paid off, take that same monthly payment and apply it to the next debt on the list, until the debt snowball rolls down the list and all debts are paid off. Second, avoid credit card debt. If your credit cards are causing you trouble, you’re not alone. Outstanding credit card debt in the United States is approaching $1 trillion — enough to average more than $4,300 for each adult in America! Decide today to only use a credit card to buy what you can pay for in full on the next payment. But don’t stop there. Commit to avoid using credit on items that lose their value, such as vacations, vehicles, and entertainment expenses. If you can’t control credit card use, try Ramsey’s idea of a “plastectomy” — performing “plastic” surgery by cutting up your credit cards. You can, in fact, survive in our culture without depending on credit. Do Not Fear or Worry With the economy the way it is, many are understandably concerned about ISTOCKPHOTO