As part of my quest to live more simply, I wanted to try to become and then to stay debt-free. It’s been a journey, and there are some biblical principles which have helped me along the way.
There were a number of reasons for wanting to live debt-free. One of the most important for me was to free myself of some of the responsibilities which I felt had been weighing me down. I wanted to feel like I had more options than being on the treadmill of continually living payday to payday. Also, I was keen to have time to dedicate to some voluntary work, rather than only being able to do stuff which paid me.
“Owe no one anything, except to love each other, for the one who loves another has fulfilled the law” – Romans 13 v8
Turning my aspirations into reality took time and involved acquiring a new attitude to money and to things.
I’m still learning.
Previously, I had a new car every 3 years or so. I would buy the latest gadget even if the previous version was still working fine. I would buy on impulse things I thought I wanted at the time but didn’t really need. I’d also buy what I wanted and then try to work out afterwards how to pay for it all.
And of course, once I had bought the stuff I then had to look after it, clean it, insure etc. I never seemed to have spare time, I had far too much stuff, and I was working all hours to pay for it all.
“The borrower is slave of the lender” – Proverbs 22 v7
I came up with the definition of debt-free that I wanted for me: to have no credit, loans, overdraft, or anything that involved paying interest or extra charges.
But talking about something and making it happen are two different things:
“In all toil there is profit, but mere talk tends only to poverty” – Proverbs 14 v23
So, some action was needed…
The first thing I did was to create a budget. Previously, it had been easy just to swipe or tap my debit card and, to be honest, I had no real idea what I was spending. But now I looked properly at my finances.
I got rid of my credit card and then, over time, paid off every other bit of debt I had. That involved making some decisions: not blowing my money on new stuff or expensive holidays but, instead, living fairly frugally. I still had interests and hobbies, but I looked for things that could be done fairly cheaply. Making simple changes like taking a flask of coffee out with rather than buying a coffee in a coffee shop made a big difference over time.
I also cut my outgoings as much as possible, cancelling subscriptions, and trimming unnecessary expense.
I live in a very modest, tiny house.
I started cooking in bulk and eating out less.
It took some time, but I got there. Then, having got to the stage of being debt-free, I then worked out the best way for me to conduct my finances in future. After some deliberation, I decided to split my money 5 ways:
1. Regular outgoings: This is the money that goes out every month on bills, food, fuel, planned charitable giving, subscriptions, plus a little bit for discretionary spending. Everything is budgeted and accounted for. Remaining money goes into one or more of the following….
2. Planning for things I will need: This is for things like house maintenance, car replacement, Christmas, and other things that I pay annually. I calculated the annual amount and divided by 12 to come up with a monthly figure. I put this money aside each month so that I am not caught out when these expenses come along.
3. Saving for things I want: my rule is if I can’t buy it outright, or if I have to go into any sort of debt, then I won’t have it. So, I try to put a bit of money aside each month for purchases which aren’t essential but that I would like to make. Putting this money into a separate account means that I have to think about whether I really want something rather than just buying things on impulse. If I really want something then I will buy it – provided of course I have sufficient money in this fund – but I don’t buy things on impulse.
4. Emergency fund: For me, this is 3 months of my living expenses. I try never to touch this money but it is there for if I have any genuine emergency expense or if, for some reason, I didn’t have a job. Once I reached 3 months of living expenses I stopped adding to this fund.
5. Investing for the future: This is what I am now working on. Just putting a little aside each month for the longterm. This is money that I don’t intend to touch for many years if at all possible. I only put a little bit into this fund each month.
“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it” – Proverbs 13 v11
The interesting thing is that I probably earn a lot less than I did a few years ago, but it feels like I have more! I know where all my money is going. Everything I buy is paid for in advance, rather than in arrears. I go to sleep each night knowing that I don’t owe anybody any money and that almost every scenario I can think of is accounted for.
I don’t have a lot of spare money and, like many people, the recent price rises will impact me. But I am thankful I that I started this journey before all these price rises kicked in and so I feel as prepared as I possibly can be.
All of this has only been possible because I have a job that pays a fair wage, which I know makes me very blessed. Yes, I have made sacrifices and changed my way of living, but I know that there are many who couldn’t hope to get to the stage of being debt-free no matter how many sacrifices they make. It seems so wrong that this should be the case.
The biggest lesson for me has been learning that I don’t need to compare myself to anyone else. I don’t need to have something just because others have it. And, really, things don’t bring happiness – especially when you then have to pay for them for years to come!
Happiness, for me, comes in living simply, friends, enjoying the outdoors, playing music, and in the religious path I follow:
“Keep your life free from love of money, and be content with what you have, for he has said, “I will never leave you nor forsake you.””- Hebrews 13 v5
What principles guide your finances?
Did you embark on a journey similar to mine?
Unitarian musings from North Wales 