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Jun 2006 Issue
by Danielle Ellis
President Hinckley told a story about President Faust in October 1998 General Conference. He told how many years ago, President Faust’s only debt was a small mortgage on his home, drawing 4% interest. “Many people would have told him he was foolish to pay off that mortgage when it carried so low a rate of interest. But the first opportunity he had to acquire some means, he and his wife determined they would pay off their mortgage. He has been free of debt since that day. That’s why he wears a smile on his face, and that’s why he whistles while he works.”
Since the beginnings of the Church, the Lord has spoken on this matter of debt. He said: “Pay the debt thou hast contracted…. Release thyself from bondage” (D&C 19:35). If we think of our debts as anything less, we are deceiving ourselves.
President Hinckley continued, “We are carrying a message of self-reliance throughout the Church. Self-reliance cannot obtain when there is serious debt hanging over a household. One has neither independence nor freedom from bondage when he is obligated to others.”
“What a wonderful feeling it is to be free of debt, to have a little money against a day of emergency put away where it can be retrieved when necessary.”
Again, President Hinckley: “I urge you, brethren, to look to the condition of your finances. I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage.
“This is a part of the temporal gospel in which we believe. May the Lord bless you, my beloved brethren, to set your houses in order. If you have paid your debts, if you have a reserve, even though it be small, then should storms howl about your head, you will have shelter for your wives and children and peace in your hearts. That’s all I have to say about it, but I wish to say it with all the emphasis of which I am capable.”
Making A Plan
If you are the type who likes to read articles for more specific ideas, there are many good articles on the ProvidentLiving.org site. Click on Resource Management, then pick a topic. Most articles are written as general counsel. The articles under Resource Management Library are more nuts and bolts specifics. Some are from the Ensign, and some are longer articles by financial experts. The site also now features many kinds of financial calculators which you may find helpful.
One Ensign article advises the following course of action. (1) Toss the temptation. Cut up all credit cards but one, which can be kept in a safe, inconvenient location for true emergencies. (2) Plan your payments. Figure out what you can afford to pay, then use a debt stacking system. Pay off the first debt, then add that payment to the original payment on the second debt, etc.
If you are more visual and into fill-in-the-blank charts, visit Oprah.com and enter a search for “Debt Diet.” Oprah’s series contains charts and step by step guides with plenty of specific information. There are even scripts for talking to your credit card companies to get interest rates and fees reduced. Interestingly, Oprah’s experts do not advise you to consolidate your debts into a home equity loan.
They advise you to (1) figure out how much debt you really have; (2) figure out where your money is going that could go towards debt instead; (3) learn to play the credit card game; (4) stop spending money and (5) create a spending plan for each new month.
Whatever it takes for you to begin eliminating your debt, begin today. At the very least, by facing the reality of your financial situation and making a plan to improve it, you will feel more hopeful and less stressed about your finances. And as you see your debt and interest payments shrinking, your sense of personal empowerment will increase as much as your net worth.
