Do you want to get out of debt but are having difficulty getting organized and setting up a debt payment plan?  Maybe you don’t even know the total debt you owe, the interest rates, minimum payments, due dates, etc.  Would you like to know when you can be debt free whether you pay the minimum towards your debts or pay extra each month.  There are different ways of paying off debt. Will paying the smallest debt first or highest interest debt first be best for your situation?  DebtGoal helps you solve all of these problems.

DebtGoal is not debt settlement, credit counseling, debt relief or debt consolidation.  In fact, that’s why we like it. It’s for people who can make payments on their debts and are motivated to pay them off.   Research shows if you don’t have a well-defined plan for reducing your debt, you’re likely to make minimum payments.  Of course you’ll pay extra from time to time, but it’s typically easier to make minimum payments.  DebtGoal is a planning tool that steers you away from making minimum payments and debt consolidation.  The tool will help you reduce extra costs from the interest and decrease the amount of time you spend in debt.

How it Works

Getting started with DebtGoal requires a few simply steps that only takes a few minutes.

1.  Sign up for an account and get started for free!

2.  Add a debt.  You can automatically link an account from your financial institution or add your account manually.  Automatic linking updates your accounts in DebtGoal as they change.

3.  Enter the information for the debt such as the type of debt (credit card, mortgage, car, etc.), interest rate, payment due date, etc.

4.  Create the DebtGoal SmartPay Plan.  You’ll choose between making minimum payments constant until the debt is paid off or a custom amount each month.

5.  Choose your debt pay off strategy which includes:  Debt Stacking (highest APR first), Debt Snowballing (lowest balance first), or your own customized strategy.

6. Finally, confirm your plan.  You now know  the total interest you’ll pay, your debt free date, monthly commitment, and have a strategy.

Benefits

Debt Free Date - Knowing your debt free debt is motivating!  It helps you realize you can accomplish your goal of becoming debt free. You can also adjust your plan to see how making extra payments can impact your debt free date.

Track Progress - DebtGoal does a nice job of helping you track your progress.  You can view your balance over time graphically and view a summary of your progress which includes your balance and payments made.

View Your Savings – The bottom line is debt costs you money.  Someone is charging you a fee for the loan whether it be a credit card or a home mortgage.  DebtGoal helps you save money and get out of debt sooner and it shows you how much you’re saving in interest payments.

Organized Payment Plan - Everyone’s situation is different.  You might choose to use Debt Stacking or Snowballing or a combination of the two.  The important thing is DebtGoal provides the flexibility to choose the strategy best for you with an organized payment plan.

Accelerator Actions  - Accelerator Actions are recommended steps you can take outside of your debt plan. By following these actions you can modify your debt plan with a one – time payment or increase your monthly payment. One example of an action is negotiating credit card interest rates. DebtGoal will provide recommended steps to take associated with each action.

Final Thoughts

The first step of setting up a debt payment plan is getting everything organized. This is the hardest part for most people.  DebtGoal definitely helps you solve this problem as they take you through the process step by step.  The only drawback of DebtGoal is the monthly subscription cost after the free 7 day trial is over which is $14.95 per month.  I initially thought this amount seemed high, but considering the interest savings people see in creating and following a debt payment plan, the fee is minimal.  If I had a lot of credit card debt or other debt I wouldn’t question paying the fee. The benefits and savings of DebtGoal far outweigh the cost.

Have you had any experience with DebtGoal?  Let us know your thoughts in the comments.

We all have financial storms.  The severity of the storm depends on how well we’re prepared for it.  If we don’t have money in savings and are swimming in debt the financial storm might turn into a hurricane.  However, as the unexpected storm approaches and we have 3 – 6 months of living expenses in savings we might downgrade that storm to a rain shower.

Manage financial storms

To manage a financial storm, you must become a good storm forecaster.  Financial storm forecasters see the storm on the horizon and make changes to account for what lies ahead.  Of course no one can be perfect at forecasting as you probably understand from watching your favorite weather man, but paying attention can make a dramatic difference in the type of storm you have to weather.

Anticipate changes

The first question we need to ask ourselves is: do we see clouds in the sky?  In other words, do we anticipate life changes within the next year?  Good examples of these might be a new addition to the family, moving, poor company performance where we’re employed, health complications and more.  All of these things may be good indications that we’re going to need to spend some money and we need to get prepared.

Is it really a financial storm?

After seeing something on the horizon, we then need to ask ourselves – is the storm really a financial storm?  Questions we might ask to identify a financial storm include the following:

• Is their cash on - hand in emergency savings that might be sufficient?  If so, this may downgrade the urgency.  Emergency savings is there for a reason.  Sure it was hard work building it, but it’s their to use for an emergency, so don’t hesitate when you need it.
• Is it truly a need?  In other words, can we wait several days or longer before making a decision?  If so, delayed spending may bring clarity to help us really determine a want from a need.
• Is it money required for health, shelter, food or transportation?  Generally, these areas rank highest on the family priority list.  If the expense is lower in priority, we need to try to delay the expense as discussed.

Steps to deal with a financial storm

So, we have determined this is a storm and action is required.

1. Don’t panic!

There is hope in God.  God can do amazing things when it comes to our finances by way of trusting Him.  There is a reason for this storm which may be unknown to us. Trusting God in the situation, no matter how grey or ominous it looks, will bring peace and comfort.  Pray, stop and listen for guidance!

Seek first his kingdom and righteousness, and all these things shall be given to you (Matthew 6:33, NIV)

2. Involve others who can help

We can’t be afraid to ask for assistance or counsel.  We need to seek assistance from a financial counselor or church pastor.  Believe me, having another perspective on the situation can be valuable, especially if it helps us make a decision that would prevent the use of credit cards or debt.

The way of a fool seems right to him, but a wise man listens to advice (Proverbs 12:15, NIV)

3.  Conduct serious and focused brainstorming to identify options

There are too many ideas to list and it depends on the size of the storm, but the below may be a good start if a series amount of cash is required.

• Sell a large asset such as a boat or motorcyle.
• Have a yard sale.
• Get a temporary part-time job.
• Reallcoate budget spending to account for the expense, i.e., cut out entertainment or eating out for a defined period of time.
• Slow down the debt payment plan or seek credit counseling assistance to decrease payments if there is no wiggle room in the budget
• Seek assistance from family.

A last resort

The last resort would be the use of credit or debt.  This is a hard thing for me to mention because of my strong desires to pursue debt free living, however, if health is involved or other serious issues this may be necessary.  However, we shouldn’t take this step without financial counsel.  If credit is used, the important next step is to put a debt plan in place to pay it off and get back on track.

Financial storms, while unpleasant, are a test of our faith and can help us determine quickly how orderly we are managing our finances.  The better prepared, the less severe.

What are your thoughts on steps to take to manage financial storms?  Can you think of other steps that may be important to consider?

Manage your finances wisely

1.  The Bible is the best resource for guidance in managing your finances

There are over 2200 scriptures about money, debt, saving and more.  If you get the Biblical financial principle of stewardship and follow it, you’re on the road to financial freedom.

2. There is no try in managing your personal finances

You must do it.  To many times I hear people say they will try to spend less or not use a credit card.  Unfortunately, there is often never any weight behind those words.  Tell yourself you will learn to manage your finances, control spending and get out of debt.  Don’t let there be another option.

3.  There are timeless financial steps that can be applied to your situation today

At the end of the day, it all comes down to one simple formula I always here Dave Ramsey talking about.  Inflow must equal outflow.  If you’re spending more, you’re getting yourself into debt.  Create a budget and manage to your plan.

4.  It’s important to keep it simple and find the tools that work best for you

Some people like pencil and paper and some people like software.  Also, if you try to over manage your finances, for example, 50 subcategories in your budget, you’ll almost certainly not find the time to keep up with it.

5.  You can’t hit the easy button to put your finances in order

Sorry, no one said it was going to be easy.  As in most cases, you can’t change things over night.  It requires work, commitment, intensity and perseverance to turn your situation around.

6.  Change starts with you.  No one else can do it

You have to decide when you’re going to get out of debt and start managing your money wisely.  Don’t think you have a problem with money or are doing just fine?  Consider looking at Dave Ramsey’s Baby Steps to see where you are and if you’re moving forward.

7.  Collaborative networks of people accelerate knowledge transfer and the ability to replicate best practices

Through the internet, blogs, forums and more, you have a real opportunity to learn from others who are on the road to financial freedom.  Take advantage of it.  Talk to them online and read what they are doing to mange their money wisely and live debt free.

Can you think of other guidelines?  I would enjoy hearing from you.

To quickly recap, our family is pursing the debt free goal for the following reasons:

• Living debt free is God’s advice
• Remove debt as an obstacle in fulfilling life purpose
• Avoid the stress associated with debt
• Help position our children well for the future

Tools to live debt free

Hopefully, you’ re now more motivated to live debt free and pursue a plan to get out of debt.  I think the proper way to end this series is to provide you some great practical steps and tools you can use to apply to your situation today.

1. Organize Your Debt 

Collect your debt information before building a debt plan.  This is typically the information you’ll need to collect in order to set up a payment plan:  whom owed, contact name/phone number, pay off amount, payments left, monthly payment, due date and interest.  Here is a good debt list template to print and fill out which was created by Crown Financial Ministries.

2. Measure Your Debt

A high debt ratio may indicate that your monthly expenses are becoming unmanageable.  Here is a good debt ratio tool to use from MSN Money. 

3. Create a Debt Pay Off Plan 

You will find a lot of debt pay off calculators and spreadsheets on the internet today.  I like the DebtGoal application I recently learned about.

DebtGoal includes the following features:

• Consolidated debt balances and tracking over time
• Dynamic, flexible debt pay-down plan with optimized payment schedule
• Goal setting and progress tracking
• Recommendations to accelerate debt pay-down
• A support community of like-minded people working to pay off debt
• Ask an Expert DebtGoal forum

4. Learn More 

If you’re looking for some good books about debt and managing your finances, I recommend the below resources to get started.  Both of these books helped motivate me to take initial steps in creating a plan to get out of debt and conduct wise personal money management.

• The Total Money Makeover: A Proven Plan for Financial Fitness
• Debt Free Living

What other tools and resources have you found helpful to live debt free?

Did you start getting more serious about money and personal finance when life also started to get more serious?  For me, that started when I first got married.  All of the sudden it wasn’t just about my goals anymore.  There was someone else in the picture.   Building an emergency savings, investing for retirement and paying off those school loans all became topics of conversation.  Going out and spending money without little regard for next month quickly changed.

A few years after marriage, the seriousness of family money talk typically changes even more.  That’s usually when husband and wife start thinking about having children.  Do we have enough money to have a child?  Do we need a house for a family?  Should we have our emergency savings fully funded before having children?  How stable are our jobs?  All of those questions either get discussed or are typically in our thoughts.  The truth, for those who have children, there is never a perfect time to plan their arrival.

With children in the picture, your life focus shifts selflessly to them.  You want the best for your kids and hope and pray they don’t make the same mistakes you did with money.  Therefore, if you’re like my wife and I, you’re motivated to set your finances in order, live debt free and help them prepare for their future.  Consider the below steps to help your children live debt free.

Steps to help your children live debt free

1. Position yourself well financially

You can’t jump ahead and focus on the future without taking care of your situation first.   Follow a good plan with intensity such as Dave Ramsey’s Baby Steps.  Eliminating debt as a top priority creates room in the budget for college savings and for expenses as children mature.  Not having a plan to cover expense with cash will limit your ability to follow the next two steps.

2. Set an example financially for your children

I believe the best thing you can do for your children is to set an example.  Children follow our lead and teaching them early how to give, save, avoid debt and spend wisely will help them learn how to mange money.   Proverbs 22:6 (NIV) says “train up a child in the way he should and when he is old he will not depart from it.”

Too often in our society children start managing money when they graduate school and begin their first job.  By this time, they experience the weight of debt from college credit card spending and school loans.  Become their money coach and guide early in their lives.

3. Position your children well financially

Once you are positioned and you’ve accepted your role as coach and guide, it’s time to position them.  Help your children succeed with money by saving as well as guiding them away from credit and debt.  As debt is paid off and avoided, you can begin to save for their future expenses.  Who doesn’t want to pay cash for their children to attend school, or help them purchase their first home?

Positioning our children to live debt free can change your family tree forever.  Set a personal goal to help them enter the work force debt free.

The next article in the series will discuss tools to help you Live Debt Free.  What do you think about these steps to help your children live debt free?

1. Live Debt Free – Biblical Advice
2. Live Live Debt Free – Fulfill Your Life Purpose
3. Live Debt Free – Avoid the Stress of Debt
4. Live Debt Free – Help Your Children
5. Tools to Live Debt Free

Most of us have heard that money is one of the leading causes of divorce in our society today.  I can’t help but think debt must play a large role in this cause because of the people I meet in financial counseling who are experiencing so much pain from it.

Live Debt Free – Avoid the Stress of Debt

Debt’s Weight

Debt carries a certain amount of weight with it.  Some debts are smaller and more manageable within a family budget.  Other debts weigh so heavily a family has difficulty in meeting monthly expenses.   If adequate amounts of money are not allocated to transportation, food, entertainment and other categories, a family may find itself making unhealthy sacrifices each month.

Let’s examine the affect of such a sacrifice.  Entertainment is one of the lower priority areas of a budget that usually will suffer because it’s not essential for survival.  However, it’s unhealthy for a husband and wife, or family, not to have an amount of money planned for fun together each month.

Temptation

A family can be tempted to use a credit card out of frustration from the lack of entertainment or money for other areas.  After the credit card has been used and debt increased as a result, the weight of debt on the minds of the husband and wife increases.

Doesn’t life sometimes require enough work and commitment as it is without adding more to the mix?  Increasing worry and stress from the debt can exhaust people and put relationships at risk if not properly managed.

Avoid Debt

Personally, I would just soon not put our family through this experience and avoid debt all together going forward.  In my opinion there is no immediate amount of satisfaction in buying a new car, toy or other that would cause me to want to increase debt and the work to manage it.

Financial Hope

Some have made decisions they wish they could change today, or others have unfortunately been impacted by unplanned expenses, such as healthcare, that couldn’t be avoided.  Experiencing the stress associated with debt is a serious matter.  Fortunately, there are steps that can be taken that provide financial hope no matter your debt situation.

• Pray about your debt.   Ask God to help you and trust that he will.
• Read Biblical Financial Responsibility and learn how God plays an important part in your finances.
• Contact a financial counselor to help explore options specific to your situation.

The next article in the series will discuss living debt free to help your children.

1. Live Debt Free – Biblical Advice
2. Live Live Debt Free – Fulfill Your Life Purpose
3. Live Debt Free – Avoid the Stress of Debt
4. Live Debt Free – Help Your Children
5. Tools to Live Debt Free

Your Purpose

You may be doing some work today towards fulfilling your purpose or mission in life. However, if income from a traditional job was not required or you were debt free, would you be able to dedicate more time towards this purpose? For most of us the answer is easy. Yes, of course!

Although this article isn’t about how to identify your life purpose, there is a good resource that will help you.  Rick Warren wrote a book called the The Purpose Driven® Life: What on Earth Am I Here For? It is a 40 day journey to help you understand God’s purpose for your life.

Once you understand your purpose you can set specific goals towards committing resources and time towards it. One such goal may include eliminating obstacles or roadblocks preventing you from making a full commitment to this work.

Debt is an Obstacle

Although debt in itself may not prevent us from doing work today towards our life purpose, it can be an obstacle, slow us down and demand much of our time and attention away from this mission.  For example, if a lot of resources are required to make excessive car payments, house payments, school loan payments and credit card payments each month, they can’t be used towards accomplishing other goals.

Some goals commonly impacted are the ability to build a 3 – 6 month cash emergency fund, adequate investing for retirement, and giving. Also, if debt is in a constant state of growth, the goals become further away from our reach.

Certainly everyone’s debt situation is different. There are different reasons why people are in debt and some people have more than others.  However, everyone can commit to living debt free today and creating a plan to eliminate debt. 

6 commitments you can make today to live debt free

• Do not spend more on a credit card than you can pay off each month.  Each month should begin and end with a zero balance. 
• Commit to having no more car payments.  Once your car is paid off (assuming you have a car payment today) continue to pay yourself to save for a new car.  Equity from your existing car plus your savings should be used to buy another car when needed.  Buying reliable used cars will help make this possible.
• Create a debt payment plan.  Stay tuned.  There will be more about this in the 5th article of the series.
• Create a monthly budget.
• Talk about money decisions with your spouse.
• Tithe to your church and put your finance’s in God’s hands.

Can you think of other commitments you can make to live debt free and to help you commit more time and resources towards your purpose?

The next article in the series will discuss living debt free to avoid stress.

1. Live Debt Free – Biblical Advice
2. Live Live Debt Free – Fulfill Your Life Purpose
3. Live Debt Free – Avoid the Stress of Debt
4. Live Debt Free – Help Your Children
5. Tools to Live Debt Free

If you’re just joining, I’m writing a 5 article series entitled, Live Debt Free.  This is the first article out of four in which I discuss the four reasons why our family is pursing the debt free goal (including our house).  I plan to end the series with a fifth article that will include some practical tools to help in becoming debt free. 

Before we get too far into the series, I think it’s important to discuss the definition of debt.  Dictionary.com defines debt as “something that is owed or that one is bound to pay to or perform for another: a debt of $50.”   Bound is defined as ”tied; in bonds; a bound prisoner.”

The Bible doesn’t describe debt much differently than Dictionary.com.  The definition of debt in Proverbs 22:7 is, in my opinion, a sobering view of debt.  The scripture says, “the rich rule over the poor, and the borrower is servant to the lender.” 

If debt is something that is owed and or that one is bound to pay, we can conclude debt includes home mortgages, car loans, student loans, credit card loans and personal loans.  There are probably a few others, but, hopefully, you get the picture. 

If you are bound to pay you are a servant to the person or entity in which you are bound.  You are held captive because you’re under obligation to make the payments you’ve agreed to make. 

Biblical view of debt

In the Crown Financial Ministries Small Group Study manual, the Bible on Debt section, provides different translations of Romans 13:8.

• “Owe no man anything: (KJV)
• “Let no debt remain outstanding: (NIV)
• “Pay all your debts” (TLB)
• “Own nothing to anyone” (NASB)
• “Keep out of debt and own no man anything” (Amplified)

Live Debt Free

Personally, I think the message, or God’s advice, is crystal clear.  As a family, we don’t want to be held captive by debt owed to any person or entity.  Understanding the Bible tells us to “owe no man anything” (KJV), we are pursing the goal of becoming debt free to create more financial peace in our family and remove obstacles in pursuing what we believe is God’s purpose for our lives.

Does the Bible’s advice on debt motivate you to avoid debt and live debt free?

The next article in the series will discuss living debt free to have the freedom to fulfill your life purpose.

1. Live Debt Free – Biblical Advice
2. Live Live Debt Free – Fulfill Your Life Purpose
3. Live Debt Free – Avoid the Stress of Debt
4. Live Debt Free – Help Your Children
5. Tools to Live Debt Free