It seems the big talk around town these days is how to save more and get out of debt. Personally, I love that people are paying closer attention to their finances. People who do so and work to manage money better are in a better position to give to greater purposes. And that’s an important part of achieving true financial freedom!

Many people in a lot of debt are obviously seeking help. The first step is to fix the problem at home. In other words you have to fix you before you can fix the debt. This requires a committment to stop spending excessively, if credit cards are the problem. Next, a budget needs to be created and spending brought in order. This will certainly require sacrifice to reduce expenses, but may also require some sacrifice to generate extra income through a part-time job.

If you’ve taken these steps and still can’t seem to make forward progress, one option to consider is seeking the assistance of a debt counselor. Smart Money recently provided some good tips when choosing a debt counselor:

• Look for a nonprofit firm. You’ve spent too much already; why pay more now? Nonprofits get most of their funding from creditors, not you.
• Privacy isn’t usually an issue, but it’s wise to check what the agency’s policy is.
• Check the enrollment and monthly fees.
• Find out up front exactly what services you’ll receive, such as counseling, a debt-repayment plan and budgeting advice.
• Have them put it all in writing and send you the information before you proceed.
• Ask if the organization belongs to any professional groups, such as the NFCC or the Better Business Bureau.
• Have them explain how they’re audited and if your funds are protected.

Overall, I think these are solid tips. I particularly like the idea of looking for a nonprofit firm. Costs are typically what you have to watch out for as many companies out there are more concerned about getting your money versus getting you out of debt. So, definitely chck the enrollment and fees.

Checking the enrollment fees and monthly fees is something you’ll want to keep an eye on. While these fees have been more regulated some companies have charged ridiculous amounts to people who are obviously just trying to get their heads above water.

According to the Association of Independent Consumer Credit Counseling Agencies (AICCCA), many ask for only a nominal enrollment and monthly fee. In the past, a few shady agencies were known to charge the full amount of your monthly debt payment, plus an additional 10% each month, according to the AICCCA. Such excessive charges have been largely wiped out by IRS regulations and updated state laws.

Anytime you’re going to enter into a financial agreement with someone make sure you completely understand what it is they’re going to provide you. Putting the services in writing and sending it to you is a good idea. There is much less pressure to read through the paperwork than over the phone or in-person. Avoid finalizing any agreements until you can read through everything.

What are your thoughts on finding a credit counselor? Do you think these tips can keep you from making a bad decision if you you’re seeking a credit counselor to help you get out of debt? Have you had any experience with credit counseling (good or bad)?

This article was written by Jason Price. Jason Price is a personal finance writer at One Money Design and a Money Map Coach. His mission is helping people achieve true financial freedom. He provides practical tips for managing money wisely and shares Biblical financial principles. Beyond personal finance, Jason enjoys spending time with his family and playing soccer. You can also find him on Twitter and Facebook.

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• Save Money On Your Hospital Bills Just By Asking

One of the most expensive line items in a lot of people’s budgets is the health care category.  Whether you’ve got a lot of health issues and just end up paying a lot of money, or if you have high ticket health care insurance, the costs can be quite high.  Because the costs are already high, it’s important to make sure that you don’t end up paying even more than you have to by making sure you do a few common sense things.

A week ago we had our first child, and as a part of that process we’ll end up paying several thousand dollars for the delivery, hospital stay, and our small son’s stay in the infant intensive care unit.   Even though it’s been expensive, we have done things in order to keep the costs down.

How To Keep Your Medical Costs Lower

Here are a few things we have done in order to keep our costs to a manageable level (and a few we haven’t done).  Some of the tips may seem to be common sense, but unfortunately not everyone does them anyway.

• Get health insurance: Make sure you have health insurance and that it will cover the costs of your baby being delivered – or whatever procedure you are having done.  Find out what things are covered, and what are not.  Paying for health insurance may stink, but it’s better than the alternative – paying tens of thousands of dollars more in hospital costs.
• Find out what things are covered: One tip we have taken advantage of this time is to make sure that everything we are using our insurance for is covered.  For example, we found out that sometimes circumcision is only covered if it is done at the hospital.  We also found that certain things like a breast pump may not be covered unless you have a prescription from a doctor showing medical necessity.  Figure out the things you need or need done, and do them the way your insurance requires.
• Ask for a discount:  When paying for your medical care you can often get a substantial discount on your bill just by asking and offering to pay your bill up front in cash.  We haven’t done that yet this time, but in the past we’ve saved hundreds of dollars by doing this.
• Research local hospitals to find the best price: Find the best price on your health care, especially if you’re uninsured.  Do some research at sites like healthcarebluebook.com to find the best price on your procedure in your area.  Prices for the procedure can vary by thousands of dollars depending on where you get it!
• Take advantage of Flexible Spending Accounts (FSA):  If your employer has a flex spending plan available take advantage.  It will allow you to spend pre-tax dollars on eligible medical and health items.  Things like prescriptions, medicine and band aids are eligible.   Our contributions to our plan mean we can do up to $3000 in pre-tax spending this year.
• Use generic drugs when possible:  Sometimes after you’ve been in the hospital you end up having to get prescripti0ns afterwards.  Quite often it can be cheaper for you to buy the generic version of drugs instead of the brand name.  This won’t always save if your health insurance has the same co-pay for all drugs.
• Get free samples:  Sometimes if you are only taking a short course of a drug, your doctor can give you some free samples to cover it.  I did this one time for a drug i had to take for a few days, and ended up not having to pay for it.
• Take advantage of free services:  Sometimes hospitals and insurance companies will offer free benefits to you that save them money in the end, but can still be beneficial for you. For example, we took advantage of a free home care visit by a nurse that helped us to get questions we had about the baby answered.  It ended up saving us a visit to the pediatrician – and a copay.
• Steer clear of the emergency room unless necessary:  The reason?  It is expensive. Of course if your child is very sick – by all means take them in, but if it can wait a few hours, take them to your normal doctor’s office.   It will be a lot cheaper.
• Use a “minute clinic” for routine visits:  If you have a local minute clinic you can use to get your shots/etc, it often ends up being more affordable.

So those are a few of the things we’re doing to help keep our costs lower.

What things do you do in order to keep your health care costs lower?   Give us your tips, trick and hints in the comments!

This article was written by Peter Anderson. Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his baby boy, Carter. He loves reading and writing about personal finance, and also loves a brisk game of tennis every now and again. You can find out more about him on the about page or check out his design site at http://www.logosforwebsites.com. You can also follow him on Twitter at @moneymatters.

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Spending money is a necessary part of life that requires diligent planning and serious discipline. You may have also realized it’s really fun.

Many of us, often without realizing it, allow our spending habits grow out of control and wreak havoc on our bank accounts. The following are the Seven Deadly Sins of Spending we can all afford to avoid and tips for overcoming them.

1. Pride

It’s easy to get caught up in image. Many people try to maintain an air of wealth or affluence by buying things they can’t afford.

Even you may succumb to pretentious tendencies at times. Perhaps you’ll purchase a name brand over the generic or rely on a credit card for a hot item you don’t have the cash for, all in pursuit of admiration from others.

Over-spending just to perpetuate a facade will eventually catch up with you. It’s OK to admit it when you can’t afford something — and sometimes you have to. Don’t let your ego hinder your financial well-being.

2. Envy

Sure, that shiny new sports car sitting in the driveway next door looks great, but imagine how much better next year’s model will look in yours. Too bad you’re still paying off the sedan you bought five years ago. You deserve it so much more, though.

Keeping up with the Jones’ will do nothing but sink you further into debt. You will not be happier or more successful. Instead of constantly coveting the possessions of others, be thankful for what you have. If you can’t live without a particular extravagance, like a new car, plan a well thought-out budget for it in advance.

3. Gluttony

Do several items of clothing hanging in your closet still have tags attached? Do you feel a compulsion to buy things even when you know you’ll never use them? Over-consumption to the point of waste is a spending sin that takes a heavy toll on budgets.

Compulsive spending or shopping addiction, is a real issue that can negatively impact several areas of your life. TODAYshow.com contributor, Laura T. Coffee, says, “If you feel your spending is so out of control that you can’t wrestle with the problem alone, seek out counseling or therapy or try attending a Debtors Anonymous meeting.”

4. Lust

Just about everyone at some point has been guilty of buying something they really, really wanted even though it didn’t make financial sense to do so. The next time you see something you can’t possibly live without (and can’t possibly afford), restrain yourself from purchasing it on the spot. Instead, go home and give yourself 24 hours to “cool off.” Chances are, you won’t feel the intense desire tomorrow.

5. Wrath

Do your emotions dictate your spending habits? Anger, stress or any other negative feelings can trigger a desire to drop a wad of cash on something frivolous. Spending money is often a coping mechanism consumers employ to distract them from real-life problems.

If you’re guilty of this as well, find a new way to relieve pent up aggression and anxiety. Go outside, get some fresh air and exercise, engage in an activity with your kids or work on a home improvement project you’ve been putting off for weeks. There are plenty of healthy ways to deal with negative emotions that don’t cause your wallet pain and suffering, too.

6. Greed

It’s not hard to justify keeping that extra bit of paycheck for yourself instead of adding it to your savings account. You worked hard for the money, shouldn’t you have it all right now if you wish?

The truth is, there’s no excuse not to save. Saving money is probably the most important rule of finance. If you can’t trust yourself to part with some money every month, have someone else do it for you instead. Enroll in an automatic savings plan through your bank or an employer-sponsored retirement savings account with automatic deductions.

7. Sloth

Buying things becomes more expensive in general when your credit is poor. When was the last time you checked up on your credit?

Don’t slack on regularly monitoring your finances. If you’re careless or indifferent about staying up-to-date on your financial standing, you’ll eventually suffer the consequence of high credit card and loan interest rates due to unknown factors like fraud or mistakes on your credit report. Take a proactive approach to managing your finances and ensure you’re not spending more than you have to.

This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide. Follow them on Twitter at @GoBankingRates and on Facebook at /GoBRates.

This article was written by Guest Poster. We love guest contributors here at Bible Money Matters. Would you like to write for us as well? Please check out out our guest post submission guidelines and then contact us with your post idea!

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Being in debt is never fun. You carry a weight on your shoulders, and are bound by the obligations that you must fulfill. It stinks, but at least there are some protections for people who aren’t able to pay, and rules that govern how debts can be collected. In the past, debtors were not given as much leeway. In fact they were treated quite harshly. They were often sent to debtor’s prison:

During Europe’s Middle Ages, debtors, both men and women, were locked up together in a single large cell, until their families paid their debt. Debt prisoners often died of disease contracted from other debt prisoners. Conditions included starvation and abuse from other prisoners. If the father of a family was imprisoned for debt, the family business often suffered while the mother and children fell into poverty. Unable to pay the debt, the father often remained in debtors’ prison for many years. Some debt prisoners were released to become serfs or indentured servants (debt bondage) until they paid off their debt in labor.

Debtor’s prisons continued to be used in the United States and United Kingdom into the 1800s, at which time both countries outlawed the practice of putting people in jail for their debts.  It was outlawed in the United States in 1833, and abolished in the UK in 1869.

You might be surprised to find out, however, that some countries to this day still use the practice.  Debtors in the United Arab Emirates, including Dubai, can be imprisoned for failing to pay their debts.

You Can Go To Jail For Your Debt – Even Today

While many people think being imprisoned for your debt in the U.S. is a thing of the past, they aren’t completely correct.

I was reading my local paper in Minnesota this past week when I discovered a series of articles talking about people who have been sent to jail for their debts.  While they have technically been sent to jail in many of these cases because they missed a court date related to their debt, or because they missed a court mandated debt payment, the fact remains that they were incarcerated in part because they have debt.

It’s not a crime to owe money, and debtors’ prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.

Not every warrant results in an arrest, but in Minnesota many debtors spend up to 48 hours in cells with criminals. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect.

Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent from state to state, and even county to county.

While you’re probably OK if you follow up on court dates, and make your court ordered payments, if you miss a payment or a court date you could be in trouble.

Haekyung Nielsen, 27, of Bloomington, said police showed up at her house on a civil warrant two weeks after she gave birth through Caesarean section. A debt buyer had sent her court papers for an old credit-card debt while she was in the hospital; Nielsen said she did not have time to respond.

Her baby boy, Tyler, lay in the crib as she begged the officer not to take her away.

“Thank God, the police had mercy and left me and my baby alone,” said Nielsen, who later paid the debt. “But to send someone to arrest me two weeks after a massive surgery that takes most women eight weeks to recover from was just unbelievable.”

While I’m all for personal responsibility, and for following through on your debt obligations, some of the tactics being used by these debt collecters, and being followed up on by the law enforcement officials do seem a bit draconian. In some senses it seems like the debt collectors (credit sharks in suits as Dave Ramsey calls them) have taken over.

“The law enforcement system has unwittingly become a tool of the debt collectors,” said Michael Kinkley, an attorney in Spokane, Wash., who has represented arrested debtors. “The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it.”

How often are debtors arrested across the country? No one can say. No national statistics are kept, and the practice is largely unnoticed outside legal circles. “My suspicion is the debt collection industry does not want the world to know these arrests are happening, because the practice would be widely condemned,” said Robert Hobbs, deputy director of the National Consumer Law Center in Boston.

Now if people are able to pay their debts, and are instead choosing to ignore their obligations and not pay, that’s one thing. If, however, they aren’t able to pay because of medical issues or other problems, why would you put them in jail?

Bail Is Often The Same Amount As The Debt

One thing people are finding once they’ve been put in jail is that their bail payment is set at the exact same amount of their debt owed.  When they post bail their money goes directly to the debt collector.

Hennepin County automatically sets bail at the judgment amount or $2,500, whichever is less. This policy was adopted four years ago in response to the high volume of debtor default cases, say court officials.

Some judges say the practice distorts the purpose of bail, which is to make sure people show up in court.

“It’s certainly an efficient way to collect debts, but it’s also highly distasteful,” said Hennepin County District Judge Jack Nordby. “The amount of bail should have nothing to do with the amount of the debt.”

If friends or family post a debtor’s bail, they can expect to kiss the money goodbye, because it often ends up with creditors, who routinely ask judges for the bail payment.

This does seem to be a bit shady – basically the law enforcement and judicial systems are being used as an extension of the debt collection agencies.   I’m sure the debt collectors will abuse this system since they’ve never been known for their fair debt collection practices.

How To Stay Out Of Jail For Your Debt

So how can you ensure that you’ll never end up on the wrong side of a jail cell door – especially if you have debt?

• Don’t avoid bill collectors or warrants.
• Make sure to read any documents you get from bill collectors or the courts.
• If you get a summons and complaint, you are being sued. You must show up in court.
• Respond promptly to a summons either denying or admitting to the debt.
  
• Show up for all court hearings.

So to stay out of jail, follow up on your debts, and if you are being sued or given a court date – show up!  If you don’t you could end up losing by default, and have a warrant sworn out for your arrest.

What do you think about the ways that debt collectors are now using the law enforcement and judicial system to collect debts for them?  Do you think it is right? Should debtors be afforded more protections, or are they getting what they deserve? Should new laws be passed? Tell us your thoughts in the comments.

This article was written by Peter Anderson. Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his baby boy, Carter. He loves reading and writing about personal finance, and also loves a brisk game of tennis every now and again. You can find out more about him on the about page or check out his design site at http://www.logosforwebsites.com. You can also follow him on Twitter at @moneymatters.

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In the past couple of years my wife and I have been able to dig our way out of debt – and a couple of years ago we paid off our last debt, a student loan for my college education. It was an amazing feeling being able to do that – it was a weight off our shoulders.

Over the past two years since our debt has been paid off we’ve been through quite a few rough patches. My wife has been hospitalized twice with unrelated problems, and is now expecting our first child within the next month or so. Needless to say having my wife be in the hospital 3 times over the past 2-3 years hasn’t been cheap, and has set back our investing and wealth building phases back a bit.

We are now in a phase of our financial lives, however,  where we’ve saved up a sizable 10 month emergency fund, and are ready to embark on the next steps in life.  Building wealth and paying off the mortgage early. So today I thought I would talk about the idea behind making extra payments on your mortage in order to pay it off ahead of schedule.

When Would I Want To Pay Off My Mortgage Early?

One thing that I want to stress right off the bat is that I think there is a progression you should probably follow when considering paying extra on your mortgage.   Among things that should probably be a priority before paying extra on the mortgage:

• Making sure all non mortgage debts are paid off
• Making sure you save 15-20% of income towards retirement
• If you plan on helping children with their education, save towards that

If all those things are being done, and there’s still money left over, I might consider paying extra on my mortgage.

How much of a mortgage should you have in the first place?  Dave Ramsey suggests getting no more than a 15 year fixed rate mortgage that is no more than 25% of your income.   Having a 15 year mortgage means you’ll have higher payments, but it also means you’ll have it paid off sooner, you’ll pay less in interest, and you’ll be forced to stay disciplined to pay it off in 15 years or less.

At our house we ended up with a 30 year mortgage because when we bought the house we wanted the flexibility of the lower payments, and we knew we had the discipline to be making extra payments as we could.   We have made extra payments when we have extra.  So far this year we’ve paid an extra house payment completely towards principal, and hope to do a couple more at least.

Ok, so we’ve simplified the idea of paying extra towards your mortgage, but there is actually a lively debate as to whether it is a good idea or not.  I want to look at some of pros and cons around paying your mortgage off early.

Reasons Why Paying Off The Mortgage Early Is A Good Idea

There are a lot of people who think that paying off your mortgage early is a great idea, and is an indicator that you’re heading down the right path.  Here are some of the reasons they give for paying extra.

• Paying less interest on the mortgage:  When you pay extra on your mortgage principal it ends up meaning you’ll shave months or years off of your mortgage, and you’ll save thousands of dollars in interest.  For example, on a 300,000 dollar mortgage over 30 years, with an interest rate of 5%, you’ll end up paying over  309,000 in interest.  Cut that to a 15 year mortgage and you’re only paying 143,000 in interest.  The more extra payments you make, and the faster you pay,  the less interest you’ll have to send to the mortgage company!
• Less risk, more peace of mind:   With less debt on your balance sheet, you have less risk in your life.  You’ll have less to worry about when your only bills are food, taxes and other necessities.  Add to that having the burden of debt removed from your shoulders. The psychological benefit of being free of debt isn’t to be underestimated.
• More freedom: When you don’t have a mortgage payment you’ll have more freedom. Don’t want to take a job – you don’t have to because your monthly debt obligations are next to zero.    Instead do something you love!  Want to have one spouse be a stay at home parent? Do it!  You can afford it!
• Eliminating debt is a sure thing: While investing in the stock market isn’t a sure thing -having a paid off house you can live in IS.
• Extra money to save, invest and give: When you have a paid off mortgage  you’ll have a lot more money left over every month that you can use to save invest and give. Can you imagine how fast your nest egg would grow if you had no debt obligations -including a mortgage?

To me the benefit of having a paid off mortgage can’t be understated.   With no mortgage, and no other debts you’ll be free to pursue things that you enjoy.  You’ll be able to work less doing things you enjoy.  You can take the money you’ve saved in interest and build wealth.  Why not!

Want to hear the story of someone who paid off their mortgage early, and seems pretty happy about it?  Check out this post:  How We Paid Off Our Mortgage in Under Ten Years

Reasons Why You Don’t Want To Pay The Mortgage Off Early

There are those that say that while it’s a nice idea to pay your mortgage off early, there are reasons why you shouldn’t.

• Liquidity of your assets and flexibility:  One argument against paying off the mortgage that makes some sense to me is the idea that putting all your extra cash into your mortgage means you’re going to have a lot less liquidity in your assets, and if a situation were to arise where you needed money fast,  your money would be all tied up in your house.  This argument is the reason why I suggest that people first save up a sizable emergency fund, and invest and save first.
• Higher returns by investing your money:  Many people argue that you would get higher returns on your money if you simply invest it.    If you can get 7-8% on your money, you will end up coming out ahead.   On the other hand, there is risk with investing as well, and there aren’t guarantees.
• Inflation works for you:  As inflation goes up by 3-4% annually, by not paying off the mortgage and paying it over time, you’re essentially paying less for the same amount of  house every year.  You pay the same today to live in the house that you do 30 years from now.
• Tax deduction:  You can deduct the interest you pay on your mortgage, on your taxes.  Taken by itself it isn’t a good idea to keep a mortgage, but when taken in concert with the rest, it might be the straw that broke the camel’s back.

So for some people it seems that just holding onto their mortgage ends up being the preferable option. For  a story of someone who didn’t pay off  their mortgage early, read this post: Why I Didn’t Pay My Mortgage Off In Full

Why We’ve Decided To Pay Off Our Mortgage Early

When you talk about paying off your mortgage early there are a lot of pros and cons on both sides of the equation.    If I were to simply make a decision based on cold hard numbers, I might have to admit that maintaining a mortgage for 30 years would be the best route.  But since I know that we have a goal of not owing anything to anyone, and we long to have the freedom and peace of mind that comes along with having a paid off mortgage, I can’t rationalize not paying extra on the mortgage – even if it is mathematically the best choice.   And the savings in interest speaks for itself.

So after saving and investing, we’ve made what totals to one full extra payment towards our principal so far this year.  As the years continue we hope to accelerate the rate of payoff to make the day we can say we are truly debt free come that much faster.

When making your own decision you need to weigh the factors listed above, think about your risk tolerance, and make a decision that you feel is best for your family.

Are you considering making extra payments on your mortgage in hopes of paying if off early? Do you have a paid off mortgage? Not paying it off? Tell us your thought process of why (or why not) you want to pay off your mortgage early.

This article was written by Peter Anderson. Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his baby boy, Carter. He loves reading and writing about personal finance, and also loves a brisk game of tennis every now and again. You can find out more about him on the about page or check out his design site at http://www.logosforwebsites.com. You can also follow him on Twitter at @moneymatters.

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I‘ve been writing about Lending Club for quite some time now, but usually from the viewpoint of an investor. I’ve invested in 30+ loans over the last year or so, and thus far I’ve been extremely happy with the experience. I’ve been pretty careful about the loans that I invest in, and I think because I’ve been so careful, I haven’t yet had any of my loans default.

One thing I have neglected to write about much in regards to Lending Club is how you can also use the service as a borrower, and now it may be more manageable as they’ve added a 5 year term loan for borrowers.

Using Lending Club As A Borrower

I’m never the one to suggest that people take on new debt.  I’m a huge advocate of saving up and paying cash for the things you buy, and I think I’m actually allergic to creating new debt.

I do understand however, that sometimes people make poor decisions, or have created debt before they started being more careful about their finances.  In instances where people have a variety of high interest debt, I actually think it’s a good idea to consolidate those debts into a lower rate, and cut the amount of interest you’re paying, while you pay the debt off.

Debt consolidation has gotten a bad name in recent  years, and most likely deservedly so as there are a million debt consolidation companies out there who are fly by night operations, not doing anything for you that you couldn’t have done yourself (and charging you an arm and a leg to do it!)  A good number of them are actually crooked (be careful!)

So what’s the key to having debt consolidation be a good thing for you?  You need to remember these things:

• Debt consolidation doesn’t remove or fix the problem. When you consolidate your debts all you’re doing is moving the debt around, and you should be paying less interest.  Don’t get a false sense of security just because you’ve consolidated your debt and have one payment.  Remember it still needs to be paid off, and you have to stop incurring new debt!
• If you’re not careful debt consolidation could mean you’ll pay MORE in interest.  Remember to make sure that you only consolidate your debts that carry a higher interest rate than your Lending Club loan, otherwise you could end up paying more than you would have otherwise.   It can be tempting to consolidate everything so that you just have one easy payment, instead of several smaller ones – but don’t do it! Only consolidate higher interest debts.
• Debt consolidation can mean you’ll be in debt longer.  Be aware that consolidating could mean that you’ll be in debt for a longer period of time. Try to make sure you pay off your debts as fast as possible!
• Only consolidate your debt if you’ve got a plan in place.  While consolidating your debts can be a good idea, if you don’t have a plan in place to pay off your debts in a timely manner, you’ll be doomed to failure.

There have been a lot of folks who have used Lending Club in order to help them consolidate higher interest credit card debt, home equity loans and other high interest debt.  Just remember, it can be used as a helpful tool, but if you don’t use it correct, it can become a curse as well.  Make a plan, be careful about what debts you consolidate and start paying your loan off as fast as possible!

Have you used Lending Club to consolidate your debt?  Were you happy with the experience? Tell us how it worked for you!

This article was written by Peter Anderson. Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his baby boy, Carter. He loves reading and writing about personal finance, and also loves a brisk game of tennis every now and again. You can find out more about him on the about page or check out his design site at http://www.logosforwebsites.com. You can also follow him on Twitter at @moneymatters.

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In my experience, people who get out of debt do so primarily through hard work, sacrifice, and persistence.

In fact, I think the road to the debt free life is built by the hands of sacrifice.

Why Must You Sacrifice To Get Out of Debt?

Since sacrifice involves giving up something, I’m going to say the opposite of sacrifice is indulgence.  Financially speaking, indulgence would be spending without any control.  It is purchasing whatever thy heart does desire.  Sacrifice would mean giving up something.

Unfortunately, there are many pathways into debt.  In this post, I’m going to focus on the most common reason of debt – indulgence.

If you are in debt because you have made a habit of spending more than you earn, then the only receipt for getting out of debt will be sacrifice.

Consider the example of buying a car.  If you want it now, your only option will be to get car payments.  However, if you have a sense of control, you will save up until you can pay cash for a car.

Things I Would Not Sacrifice To Get Out of Debt

Here are a list of things I would not sacrifice on a journey to get out of debt.

1.  Giving

Since I believe giving is a spiritual activity, I would continue to give in debt.

2.  Memories and experiences

If debt is one type of slavery, I certainly wouldn’t want to exchange it for another type of slavery – a dull, meaningless life.

3.  Family and relationships

In different lists I’ve seen on family stressors, money issues are usually very high on the list, but divorce is always higher.  If in an effort to get out of debt, if you ignore or neglect your family beyond a mutually agreed on period, then your get out of debt journey might unintentionally have a relational cost.

When getting out of debt, families need to communicate very clearly about motives, intentions, and expectations.  Getting a second part time job or turning a hobby into a source income is a common way of paying off debt.  However, if in an effort to get rid of debt you start lose your family, you need to regroup, refocus, and rewrite a plan to get out of debt.

Creativity: The Key To Getting Out of Debt & Having Fun

Without creativity, you might think that you need to choose to either get out of debt or have some good memories and experiences.  But, you can have both.  In fact, these things I listed above are mutually inclusive.

With your family relationship, sometimes sacrificing something for a short term loss will provide long term gains.  A family might decide that one parent will work like crazy for a designated amount of time (6 months – 2 years) so that they can get out of debt.  They know that temporary sacrifice will give a greater return for their family in the long run.  During that time, they creatively work at having a healthy family relationship and getting out of debt.

Creative Examples When Getting Out of Debt

Giving: It might be that you cannot give money, but instead you focus on giving some of your other resources.  This conscientious decision means that you understand giving is about more than money, and you can give something more valuable – your time.

Families and relationships: Getting a second job does not necessarily mean more time away from the family.  Perhaps you can find a job that allows you to work during hours when your family might otherwise be sleeping.  Consider something like early morning newspaper delivery or writing in the evening.

You might think that because you are in debt you can’t go on vacation.  You can go on vacation, you just can’t spend much money.  How about a staycation?

Memories and experiences: It is possible to be frugal and have fun.  Unfortunately, a lot of people think those two things are diametrically opposed.  A park can be as fun as a theater.  A picnic at the beach can be as much fun as dinner at a restaurant.

You can keep the memories and experiences without spending dollars.

What do you think – is it possible to have it all?  Are some things not worth sacrificing to get out of debt?

This article was written by Craig Ford. Craig is a fulltime missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.

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I remember like it was yesterday, my wife and I were deep in debt and creditors were calling us every day! Of course just like many “good people” that owed money and either didn’t have the means to pay or just plain didn’t want to pay…..I applied the strategy of not answering the phone! Disclosure- I belonged to the category that because of being laid off I did not have enough money to pay but I will admit that eventually I got to the point that I just did not want to pay! Until one day I finally got fed up and said to myself: “I’m not supposed to be living like a prisoner in my own home, this has got to stop!”

I was tired of running and being a prisoner in my own home. Every time the phone rang my stomach felt as if I was on the worlds most violent roller coaster. I was tired of feeling ashamed and defenseless and full of fear! Enough was enough! A life full of fear and bondage was not the life God had intended for me to live. So I got down on my knees and asked God for wisdom on how to deal with these creditors so that I can stop living a life of fear and regain my life.

If you need wisdom, ask our generous God, and he will give it to you. He will not rebuke you for asking.- James 1:5 NLT

Here’s the answer I got: “Deal with your Creditors like David dealt with Goliath”!

I learned that before I could start applying the Debt Snowball plan that I had heard so much about, I had to first learn how to talk with the creditors that held all this debt! But how could I possible talk with these people that seemed to hate me and really didn’t care anything about my situation, all they wanted was my money! They didn’t care that I had just been laid off and that I was fighting from week to week to feed my kids and to keep the lights on in my home!

So if I was going to “deal with my creditors like David dealt with Goliath” the first thing that I did was read about the account of how David defeated Goliath in I Samuel chapter 17. From this story and experience I learned five key principals which I will call “Stone 1-5″! By applying these principals to my life I no longer feared talking with my creditors, I now actually looked forward to speaking with them. Very soon my wife and I were paying off our debts and got control of our life and our phone lines again!

The 5 Stone Principals of dealing with your creditors like David dealt with Goliath:

He (David) picked up five smooth stones from a stream and put them into his shepherd’s bag. Then, armed only with his shepherd’s staff and sling, he (David) started across the valley to fight the Philistine (Goliath). I Samuel 17:40 NLT

Stone #1) Be proactive

One of the problem’s running from my creditors was that I became a very reactive person. Meaning that I was reacting to my circumstances instead of being proactive and shaping my circumstances. As it states above in I Samuel 17:40 NLT, “David started across the valley to fight Goliath.” As you can see David did not wait for Goliath to come to him, David took the first steps towards Goliath! That is what I started doing, instead of the creditors making my phone ring, I had to make their phones ring!

Being proactive actually gave me the advantage because I dictated when the call was made and I already had a plan for what I was going to talk to the creditors about that day! Here’s the funny thing, just like Goliath your creditors are used to people running away from them and being reactive and not proactive.

Stone #2) Understand what the reward is for winning this battle

There’s an old cliche that says “You must pick and chose your battles” in other words if your going into a fight you should always know what the reward for victory is. And even more important, is that reward going to be enough motivation for you to keep going no matter what it looks like? Even David did this before he decided to go up against Goliath:

“Have you seen the giant?” the men asked. “He comes out each day to defy Israel. The king has offered a huge reward to anyone who kills him. He will give that man one of his daughters for a wife, and the man’s entire family will be exempted from paying taxes!” ²⁶ David asked the soldiers standing nearby, “What will a man get for killing this Philistine and ending his defiance of Israel? – I Samuel 17:25-26 NLT

I had to ask myself what will the reward be for dealing with these creditors and will the reward be worth the fear and discomfort that I was going to have to face? I decided that the rewards were: Peace of mind, control, confidence, freedom & freed up monthly cash flow! It was definitely worth going into battle for! What are you fighting for? Is it worth it? The answer in this case is definitely, Yes!

3) Make positive confessions before calling

One thing that really helped me eliminate some of the fear of calling a creditor was to make positive confessions before making each call. This helped me get the butterflies out of my stomach. I confessed things like: “I have favor with this creditor”, “this creditor will honor that I am being proactive and will work with me”! Listen to how David spoke positively before he went out to fight Goliath:

Thy servant slew both the lion and the bear: and this uncircumcised Philistine (Goliath) shall be as one of them, seeing he hath defied the armies of the living God. – I Samuel 17:36

So before you make your call make positive confessions to help get the butterflies out of your stomach and build up your confidence for a positive outcome!

Stone # 4) You must document everything!

Ok, so you won’t necessarily find this stone in the story but I learned this lesson the hard way since many of the creditors seem to forget promises that they were making on their end, I had to start documenting everything! I purchased a separate notebook to log all of my calls in one place and here’s a quick run down on what I documented on each call:

1. Date & Time
2. Full name and extension of every person you spoke with
3. What did you talk about specifically that day
4. If an agreement was reached request that they send it to you in writing
5. Keep all documents in one file and store for future reference especially “Paid in full” statements!

Documentation is crucial as your dealing with your creditors.

Stone #5) Remember God has your back:

This is the most powerful out of all the stones! The one thing that I had to remember during this whole time that I was fighting to get out of debt and to work with my creditors was that God was in control and that he had my back. So no matter what the outcome of the call was going to be, I had already won! David told everyone who had his back before he set foot on the battlefield and right before he fought Goliath:

David said moreover, The LORD that delivered me out of the paw of the lion, and out of the paw of the bear, he will deliver me out of the hand of this Philistine. And Saul said unto David, Go, and the LORD be with thee.- I Samuel 17:37 KJV

And everyone assembled here will know that the Lord rescues his people, but not with sword and spear. This is the Lord’s battle, and he will give you to us!- I Samuel 17:47 NLT

So, stay encouraged we have the greater one living on the inside of us. If you just remember this one thing you will be off to a great start in dealing with your creditors like David dealt with Goliath!

How do you relate to my story? What “stone” would you add that helped you overcome the fear of dealing with your creditors?

This is a guest post by Carlos Frank. Carlos is extremely passionate about helping people gain control of their personal finances. In his personal life, Carlos had to overcome poverty, severe paycheck to paycheck living and layoffs from 3 jobs in corporate America! Carlos is the founder of www.GoodStewardKeys.com a faith based personal finance blog focused on helping people manage and increase the resources that God has entrusted them with! You can follow Carlos on Twitter @CarlosFrank.

This article was written by Guest Poster. We love guest contributors here at Bible Money Matters. Would you like to write for us as well? Please check out out our guest post submission guidelines and then contact us with your post idea!

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I recently received the new Consumer Reports Top 2010 cars edition.  This annual review provides a number of interesting car analyses covering ratings, reliability, value and performance (as mentioned in the title).

While the top picks and best and worst cars sections are certainly interesting, I was much more attracted to the best values of cars.

As an aside, my approach for cars is to purchase a used car (when needed) and drive it until it is either unsafe or to the point to where repair is just ridiculously out of the question.

When in the market for a new used car, having such information can be extremely beneficial.  Doesn’t everyone want to drive a car 200,000 miles plus?  Of course!

As the article concludes, most people are looking to make every dollar count these days.  Hunting for a car based on value, according to Consumer Reports, will provide you a vehicle that performs well for the least amount of money.

How Does Consumer Reports Define Value?

Consumer Reports determines their value score based on three areas:

1.  Road tests:  They perform a bunch of tests and evaluate a cars performance based on those tests.  No need to go into the technicalities unless you’re a serious car person.
2.  Reliability ratings:  These are forecasts have how new cars will hold up based on information provided by subscribers.
3.  Five year owner-cost estimates:  Consumer Reports states these estimates include such costs as depreciation, fuel, insurance premiums, interest on financing, maintenance, repairs and sales tax.

Essentially, (and this is why their scoring is so helpful), Consumer Reports tries to identify what you’re going to get for your money.  Based on the above, you can see definitely see why the lowest purchase priced vehicle doesn’t always provide you the most value.

We often forget that concept as consumers.  Often we look for the best deals in the store, but find the product doesn’t give us the value or dependability we’re really seeking.

In the car buying situation, you might find a really cheap car, but not be able to drive it more than 5 years.  This completely goes against my strategy of ridding our family of car payments forever!  You can drive certain cars as much as 10 years (and maybe more) based on their overall value and that’s what we’re looking for folks!

Cars That Provide The Most Value

So, here we go with the results.  Consumer Reports provides the top value scoring cars across the following categories:

• Small cars
• Family cars
• Upscale sedans
• Luxury sedans
• Sport cars
• Wagons/Minivans
• Small SUVS
• Midsized SUVS

It’s probably not a shocker, but the analysis concluded small cars and family cars have the best overall value scores.

Within the small car category you’ll find the Honda Fit, Volkswagen Golf and Honda Civic in the top 3 (yeah for the Civic (my car)).  The top 3 in the family cars include the Toyota Prius IV, Volkswagen Jetta and Toyota Camry.  It’s worth noting that most of the top models are from Asian companies.  Consumer Reports notes the analysis shows a total of 12 models built by Toyota, 8 by Honda and 5 by Nissan.

About 4 years ago I was in the market for replacing a horrible lemon, my VW Passat.  Quite honestly, the luxury, sporty look and features attracted my wife and me.  But, we paid dearly and literally for this car.  We needed a new strategy.  The strategy was one focused around value (remember, price for the least amount of money).  So, we found a Honda Civic and have never been happier.

How can you use this information when shopping for a car?

If you’re in the market for a car, I recommend picking up a copy of this particular Consumer’s Report.  In my opinion, the approach to finding a good reliable car should have a value oriented focus and this article is an excellent resource.

Final Thoughts

It’s important to note that the analysis for car value doesn’t cover such things as the color of the car, type of interior or the overall look as was heavy on our minds when we bought our VW Passat .  If you’re truly trying to save and get more for your money, try to find a compromising approach or balanced approach.

Look within these high valued cars across the categories and find something that provides value, meets your needs first.  But don’t forget about the esthetic things as well.  Keep those in mind too and you’ll feel good about your choice.  And your checking account will look better too!

What are your thoughts on what are the best criteria for finding a car that has good value?  Tell us your thoughts in the comments!

This article was written by Jason Price. Jason Price is a personal finance writer at One Money Design and a Money Map Coach. His mission is helping people achieve true financial freedom. He provides practical tips for managing money wisely and shares Biblical financial principles. Beyond personal finance, Jason enjoys spending time with his family and playing soccer. You can also find him on Twitter and Facebook.

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photo credit: Damian Morys Foto

This is a guest post written by Derek Clark of Christian Common Cents. Christian Common Cents is focused on biblical solutions to financial problems, specifically getting out of debt. If you are interested please consider subscribing to the Christian Common Cents RSS feed.

Proverbs 13:7 – One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.

I don’t actually know the guy in this picture, but I do know a lot of people driving cars like his are “faking it.” They are people who have credit cards maxed out, huge car loans, and vacations from two years ago that they haven’t paid for yet. Leasing a luxury sports car and having lots of “stuff” purchased with plastic money does not make you rich or successful.

I’m not saying you can’t have nice things, but I am saying that you shouldn’t pretend to be able to afford things that can’t actually pay for yet. I’m not saying you shouldn’t take nice vacations, I just don’t want you to pay 20% interest on them. Vacations are so much nicer when you just bring back pictures and not a huge credit card bill.

I’m certainly not perfect, but I’ve worked hard to fix the mistakes I made when I was younger. When I graduated from college and got a job I thought I “needed” a newer car. I ended spending about $16,000 on a 2 year old car. At least it wasn’t completely new. Thankfully they gave me the loan without my parents co-signing, because if they hadn’t I’m sure I would have made that mistake as well. A few months later I was introduced to Dave Ramsey’s baby steps. I really wish I knew what I know now back then.

I worked hard, saved, and paid off that 5 year loan in 18 months. During that time I also paid off my college loans and became completely debt free. That was a great feeling, and I was able to save up a decent amount of money once I had no debt. I managed to pay cash for a nice engagement ring as well as a wedding ring. I also paid for a nice honeymoon and had a good emergency fund by the time we got married.

By this time I had learned my lesson. My wife didn’t have a car so I had an opportunity to make a better decision. Instead of getting a new car loan and going deeper into debt, I let her drive my nice paid for SUV. I then bought a $2500 beater for myself with cash and couldn’t be happier. My wife brought a lot of college debt into the marriage and we decided it was much more important to pay that off than have a nice car.

In eight months we have paid off $21,000 in debt, and we hope to be debt free again by June. Some of my friends think I’m really crazy. A few that are on board with Dave Ramsey still think I’m a little crazy. I take it as a compliment. Normal is broke. Common Sense was a book by Thomas Paine arguing that it was common sense for the colonies to rebel against England. Christian Common Cents is my argument that it is common sense to rebel against the “normal” way of handling money.

By not faking it we are going to be in a pretty decent financial position soon. We will have no debt other than our mortgage and few months worth of emergency fund by our first anniversary. We are also committed to paying off the mortgage as fast as we can. The lower we can get our monthly expenses the easier it will be to retire. The peace of mind that will bring will be amazing. I also truly believe in Proverbs 22:7 – The rich rule over the poor, and the borrower is servant to the lender. If you have ever been deep in debt you know that this verse is true.

Have you ever been guilty of “faking it” like I was? Have reached the point where you look at debt as servanthood? Let me know in the comments.

This article was written by Guest Poster. We love guest contributors here at Bible Money Matters. Would you like to write for us as well? Please check out out our guest post submission guidelines and then contact us with your post idea!

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• Do You Really Have To Sacrifice To Get Out Of Debt?