5 Practical Applications for Overcoming Debt

By Jessica Zackavec

Millennials are known as the generational group that is most in debt. How can we change this? I’ve come up with a few practical ways to pay off debt and prevent future debt.

  1. Make a budget. What is your current monthly income? How much debt and savings do you have? Do you have any extra money that can be applied to your current debt? Are there expenses you will need to cut? Are you going to have to be a bit more creative with your money? You won’t know the answers to these questions—and won’t be able to make a plan to reduce your debt—until you know what your income and expenses really are
  2. Be creative. Do you need a bit of extra income? Can you pick up a part time job, or thinking-outside-the-boxeven a babysitting job one night a week? Designate all money from your “extra job” to go towards your debt. Another option, if you already have a jam-packed schedule, is to look at your current spending and decide if you can get rid of any current spending categories. Do you have a gym membership you aren’t currently using? Would you be better off canceling it and going for a run or working out at home? Making a few sacrifices like not eating out or getting rid of a membership will give you additional money to apply towards your current debt. I promise it will be worth it in the end!
  3. Always make your payments. A late or skipped payment is not worth it because of the damage it can do to your credit report. Choose to make at least the minimum payment even when money may be a little tight.
  4. Use the snowball approach.
    I personally love the snowball approach. Pay the minimum payments on all of your debts, and pay extra on your smallest debt. Once that smaller debt is paid off, you feel a sense of victory. Now take the extra amount you were paying monthly plus the extra from the debt you’ve eliminated and apply it to your next smallest debt. Continue to do this with each debt ‘til they are all paid off. I love this approach because you can focus on smaller goals that are attainable instead of looking at the total amount of debt and feeling overwhelmed.
  5. Don’t Buy what you don’t NEED! To stay out of debt this step is especially important. Consumerism is a big problem for many people today. The desire to keep up with the Joneses or to reward yourself after a tough day with a new purchase or a night out is the norm. You need to remember that debt is also a norm in current society. If you want to be different and debt free, you need to live differently now! I encourage you to save up for the things you really want, and don’t get in debt over what seems urgent in the moment, but won’t be important tomorrow. Understand the difference between needs and necessities. Most importantly, stop using credit to make purchases if you tend to overspend.

I hope this helps you on your journey to overcome debt. I know it can be overwhelming, but you can do it! Don’t let yourself get discouraged. Come up with a plan of attack and stick to it! Making steps towards a debt-free life will feel great and in the long term it will help you live a much fuller life.

About the Author

jessica headshotJessica Zackavec is a newlywed and the wife of a volunteer firefighter. She has a passion for stewardship, and enjoys budgeting. She also loves crafting and all things Pinterest, and if there is an opportunity to make something amazing for cheaper, she will find a way! Creativity is a big part of her life at work and home. She is the Church Relations Coordinator at Barnabas Foundation and works in Stewardship Education, as well as Marketing.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

And join us for a Live Chat with Darryl Dahlheimer, Program Director for LSS Financial Counseling, for Conquering Your Debt: the Overlooked Key to Faith and Finances on Wednesday, September 28, 8 p.m. Eastern, 7 p.m. Central, 6 p.m. Mountain, 5 p.m. Pacific. Debt stress is the #1 identified financial problem for many families, but few know about the special resources to help get debt-free faster. Debt repayment is one area where “do it yourself” can lead down a dead end; trustworthy help is available. This Live Chat will share specific resources for each type of debt, including Debt Management Plans (DMPs) for credit card debt, available at nonprofit certified agencies, and income-based repayment and forgiveness options for student loan debt. Get free of debt faster, while building a good credit score, and avoiding heavily advertised “help scams” such as debt settlement and refinance schemes. It’s free! Register today at stewardshipresources.org/compass-live-chats. People of all ages are welcome!

Image credits: pixabay.com

Financial New Year’s Resolutions

Happy New Year from all of us at COMPASS! 2016 is going to be a year of continued, new, and exciting conversations. We’ll continue to explore faith, finances, and topics such as debt management, saving, thanksgiving, gratitude, and giving. We’ll also enter into new conversations about shared economies, alternate living situations, pooling resources, and even piecemealing income.

resolutionsTo kick off the year, during January COMPASS Team members and other Millennial guest bloggers will share resolutions, questions, and ideas for financial New Year’s resolutions. To start this month’s series on Financial New Year’s Resolutions, I figured that it would only be fair if I shared some of my own first.

I have to admit, I have never been enthusiastic about New Year’s resolutions. It’s not that I have made them and then not followed through:  I’ve just never really made them. I know that they are helpful for some people, but instead of resolutions, I am going to make a few promises to myself. When I promise something, I generally follow through.

  1. I Promise Myself that I Will Be Healthier

This might sound like a generic resolution, and to some degree maybe it is. But for me, this means more than just making sure I work out regularly. Being healthy also means allowing myself space to be most fully and healthy me, emotionally and mentally. 2015 was a wonderful year of growth and opportunity. My plate filled to the brim with great blessings and opportunities as I have piecemealed income and projects. This is exciting but also means that I end up working so many projects that I hardly ever get a full day off during the week. For my health, sanity, and productivity, I am promising myself that will change in 2016. This may mean occasionally saying no to a project that might have provided some extra financing, as well as to continue to make financial commitments for insurance, health care, and regular doctors’ visits. Being proactive and preventative is a promise for health- both physically but also financially.

  1. I Promise Myself that I Will Take Some Time to Breathe

Also related to health, I am starting the year with the promise to give myself a little more “me time” each day for reflection, prayer, moments of gratitude, and vocational restoration. A day off each week away from work and projects is helpful for me to be most productive, but taking a little time to reflect each day also enables me to be my best self whom God has created and called me to be. Without taking this time, I can give in to doubt and stress related to life and finances, while not taking the time to reflect and be grateful for all that God has done and continues to do.

  1. I Promise to include Creativity in My Life

I have found that writing and blogging is a way that I stay healthy and mentally charged. By carving out some time each day to write, I will also be giving myself a chance to reflect and see how I am doing and breathe without focusing on other projects and work that needs my attention. This time allows me to create and write, something that I believe I am called to do as part of my vocation and identity as a Child of God. When done with my blogging and “me time,” I will be even more focused, productive, and ready to dive back into my work for that day, and be able to get more done.

  1. I Promise to Continue to Budget and Save for a Honeymoon and Make it Happen
Happy New Year's from Allison and me in surprisingly Snowy Washington

Happy New Year’s from Allison and me in surprisingly Snowy Washington- being healthy by taking some time to enjoy it together.

My wife Allison and I have been married for nearly five and a half years now. This is the real confession moment: we have not yet gone on a honeymoon. Because of our vocations, studies, and other demands we moved and started seminary (following our faith calling for further education and preparation for ministry) right after getting married. In the meantime, we have created a few different financial savings account pockets, one of which is for our honeymoon. I am promising to myself that not only will we continue to save for this experience, but at least by the end of the year we will have made reservations to make it happen.

  1. I Promise to Give More

As a late 20-something, I know that my wife and I have a long and exciting life and journey ahead. I’m grateful for that, and that’s why we save as much as we do and budget regularly. This year I am promising to build off of that and continue to give more financially. We’re not “crazy wealthy,” but we’re not starving either. We have been more than able to find the ability to continue to pay off our student debt, give towards our faith community and causes we believe in, and save some. I am happy to say that in each year of marriage we have been able to incrementally increase our giving, and I promise that 2016 will continue this trend as we give more of what has been entrusted to our care.

These are five big promises, I admit. But I think that I can keep them. It might mean giving up an occasional early-morning or late-afternoon meeting for a walk or workout, or taking some time that might have been spent elsewhere to collect my thoughts and write some reflections. Overall though, I believe these decisions will make for a healthier, happy, and productive 2016.

What New Year’s resolutions are you making for yourself? What promises are you making to yourself?

Image Credit: Resolutions

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.