8 Steps To Debt Free Living & Financial Freedom

debt free, credit repair, credit, financial freedom, finances, budget, debt free living
8 Steps to debt free living & financial freedom

Debt can be a crushing force in your life, robbing you of peace and joy, causing unhealthy stress, and causing problems in your marriage and family relationships. On the other hand, debt free living and enjoying financial freedom can be a huge blessing not only to you and your family, but to others as well. The more financially free you are, the more you are able to help and bless others.


When my wife Nancy and I were younger we were not good managers and stewards of our money and finances. We pretty much spent all that we made, and often times even more. We had no financial plan or budget, we did not save for the future, and for about 10 years we were in a downward spiral financially and we did not even know it... until a crisis came.We had to learn the hard way that we had to better manage our finances, and also get a grip on our debt and start reducing it. Back then we learned a lot about what the Bible has to say about finances, planning, investing, and giving and being generous from ministries such as Larry Burkett's Christian Financial Concepts and Crown Ministries. It took us at least 5 years to start climbing up out of our financial hole, but with God's help and with great helpful information and tools, we did it. And after a few more years we were able to become completely debt free, including paying off our house mortgage. Being debt free has opened up many new doors for us to be able to help others, and also was the key to our being able to become missionaries that are able to travel to many other countries to help many other people.We want to share what we have learned (unfortunately the hard way), and we hope that this will help you to get out from under your crushing debt and have more peace and joy in your life, and so that you can be in a better position in the future to help others. Here is a step by step guide that will help you to get on the road to debt free living and financial freedom... it may take time and it may be a long road, but don't get discouraged ! You can do it ! Just take one day and one step at a time.



* Make a Budget and stick to it
(include $ for taxes, pay off debt, savings, bills, a little fun $...)

* Budget: Follow Guidelines - Percentage of Net Income (after taxes):
Housing (mortgage/rent, taxes, insurance)        25%
Food                                                                          13%
Donations/Gifts to Charity                                    10%
Transportation (loan, gas, insur.,repairs)            10%
Utilities (water, electric, gas, garbage)                 10%
Medical/Healthcare/Dental                                     5%
Clothing                                                                      4%
Entertainment, Recreation                                      4%
Miscellaneous                                                            4%

Debt Reduction*                                                     10%
Savings/Investing                                                 5-10%

  • percentages will vary somewhat due to various factors, including where you live, your income, your age, your circumstances...
  • once you pay off all debts, you can add money from  this category to savings/investing and other categories.
  • Stick to your Budget Plan ! Do not give in to temptations to spend more than your plan.

"The plans of the diligent lead to profit as surely as haste leads to poverty."
Proverbs 21:5


2. 1st FINANCIAL GOAL:  Save $1,000 cash in an emergency fund



  • Start making adjustments in your lifestyle (eat out less, buy less, stop impulse buying...)
  • Evaluate if you really need the size of house you have, or the style of car...
  • Make a list of all of your debts (credit cards, student loans, loans, mortgage...)
  • Start paying off a credit card with the smallest balance; pay as much as you can (start with credit cards - they are high interest & cost  a lot of money in the long run)
  • Once you pay off the 1st credit card, move on to the next largest bill or credit card. Add the amount you were paying on the 1st card/bill to the amount you pay on this 2nd bill/card.
  • Once you pay off the 2nd card/bill, move on to the next largest bill/card. Add the amount you were paying on the 1st and 2nd cards/bills to the amount you pay on this 3rd bill/card.
  •  Keep doing this until you pay off all of your credit cards, car loan, student loans,...
  • This could potentially save you tens or even hundreds of thousands of dollars !
  • It takes time to pay off your bills and get out of debt... DON'T GET DISCOURAGED !
  • Once you start paying off debt, you are on your way to enjoy debt free living


  • "The rich rules over the poor, And the borrower becomes the lender's slave".    Proverbs 22:7




5. RETIREMENT SAVINGS:  Invest 10-15% of your income for retirement

  • Take 10-15% of your gross income and invest it into your company's  matching 401(k) plan, and then open a Roth IRA. If your company does not offer a retirement plan or match your contributions, then skip this and start a Roth IRA. Spread your investment money across 4 types of Mutual Funds: growth, aggressive growth, growth & income, and international funds


  • "Invest in seven ventures, even in eight; you do not know what disaster may come upon the land".                           Ecclesiastes 11:2 



  • 2 good ways to save for your childrens' college are 529 College Savings Funds or Coverdell ESAs (Education Savings Accounts). These are both tax-advantaged savings products that let you save money for  education costs. As with your retirement savings, you should spread the money across 4 types of mutual funds: growth, aggressive growth, growth & income, and international funds.



  • After all other bills are paid off, and you have an emergency fund fully funded, then you should  start paying extra on your house mortgage. Pay all of what you were paying on all of the previous bills and add this amount to what you already pay on your mortgage.
    * This could potentially save you hundreds of thousands of dollars over time !



  • There is great satisfaction and joy in life when you live not only for yourself, but to help others. As you continue to improve your financial situation, and then arrive at the point of being debt free, increase your giving for the benefit of others. You will be glad you did.


"One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want. Whoever brings blessing will be enriched, and one who waters will himself be watered."                                                                                                                                                                           Proverbs 11:24-25 


Here are some other helpful articles you might be interested in:

Our Step By Step Free Travel Guide

Check out our Best Credit Score & Credit Repair Companies

Credit Score & Repair: Guide To Raise Your Credit Score

Review Of The Best Credit Score & Credit Repair Companies

Financial Planning: How To Make A Budget

Identity Theft: The Best Identity Theft Protection Companies

Other Information On Finances, Debt Free Living...

Other Useful Info & Tips & Links