Living Debt-Free: A Practical Roadmap

Living Debt-Free: A Practical Roadmap

Is it possible to live a debt-free lifestyle in our modern American culture? In a culture awash in debt – from credit-card debt, to students loans and house payments, to a government that doesn’t know how to balance the budget, every aspect of our culture seems to shout ‘no!’ Yet as I demonstrated last week, living debt-free is more than a nice idea. It is a Biblical pattern. Today’s ‘practical roadmap’ contains six basic steps for getting – and staying – out of debt.

#1 – Recognize that Debt-Free Life is Possible

As I just described, debt-free living may seem downright impossible in our culture. Especially if you already have a few major debts – such as a house payment, a car payment, and student loans – you may feel that it is far too late for you to decide to life debt free. Rest assured that it is possible.

There are many people who life debt-free, and many people who have attained this lifestyle even though they owed huge sums of money and made only a meager income. Don’t give up hope, because this really is possible! Yet as long as you have the mindset that it is impossible, you will never hope to achieve it.

#2 – Commit to Living Debt-Free

Perhaps as important as the first step, you can’t hope to live without debt until you determine to do so. Make a commitment that you will live your life without this shackle-like saddle of monetary headache constantly hounding you.

This isn’t a little decision. Take some time to think about it. If you are married, talk with your spouse. Review your reasons. Maybe take a few minutes to review last week’s post and recognize that this really is a Biblical pattern. Then, when you believe it is a wise and good idea, don’t hesitate to make the commitment.

#3 – Determine Where your Money is Going

This is a simple and vital step. You want an accurate picture of your financial status, so determine your average monthly income, where most of your money goes, and what debts you are actually dealing with. This step acknowledges the principle that it is best to act from a position of knowledge.

Figuring this information out is probably not going to be difficult. If your bank has online banking (and most do), you can go online and look at a few months to categorize your expenses. Your online paystub will readily reveal your average monthly income. Finally, be sure to make a list of all your debts, including the principal, the interest rate, and how long you have to pay it off.

#4 – Get a Mentor

You need someone who can act as both a mentor and a cheerleader. Debt is a many-headed Hydra monster, and you don’t want to face it alone. The larger your debts, the more important this step is.

An ideal mentor will have three qualities. First, they already live debt-free. You want someone who already lives what you hope to attain! Second, an ideal mentor is a responsible steward of God’s gifts. In other words, this mentor has the right perspective on money and possessions. This person lives without debt for the right reasons, and they can draw the connection for you between serving God and living without debt. Third, your mentor is financially literate and astute. This person understands how money works and how to use it wisely.

Ask this mentor out for dinner. Share your goal for living debt-free, and ask this person point-blank to be your mentor. (I can’t imagine that such a person would say no – but if so, I’m sure you can find someone else). Then ask them for their input in your situation.

Be sure to set up a recurring meeting with your new mentor (maybe breakfast on the first Saturday of each month?). Then, at each meeting, share how your progress is coming. Get advice and honestly admit the struggles that you are having. Set goals for your next meeting and review how last month’s goals progressed.

#5 – Make (& Follow) a Plan

Your plan is specific to you, although it is wise to include your mentor in the planning stage. Once you have a picture of your financial situation, draft a tentative plan for getting and staying out of debt. While each person’s plan will vary, I suggest that your plan address three important aspects:

How will you conserve money? You won’t get out of debt if you keep living the way that got you into debt! Since you already know what you are spending your money on (step #3), take aim at some of the largest and most unnecessary categories, such as your $50/month coffee habit, or your proclivity for eating out at expensive restaurants.

One popular way to conserve money is to live with a budget. You can learn about budgeting and see a sample budget here. An alternative to budgeting (though it is similar in some ways) is to use an envelope system. Label an envelope for each group of expenses that you have in a month (for example, one envelope says ‘food’). At the beginning of the month, put as much cash into that envelope as you plan to spend on that category. Withdraw from the envelope as needed. It is a little clunky (especially since it uses cash only), but it keeps you from making decisions on-the-fly. Need more ideas for how to conserve money? Check out this page from Dave Ramsey.

How will you make more money? You will get out of debt faster when you make more money. There are infinite ideas for how to do this, but I suggest you start with a garage sale. Since the average household contains over 300,000 objects, you probably have something that you can get rid of without missing. After you do this, consider the value of another job. This site provides 26 ways to make more money.

How will you pay off your debts? In general, it is best to ‘snowball’ your debts by paying off the smallest bills first. This is the most manageable plan, and it provides early encouragement when you need to see some tangible results in order to stay motivated. However, some people may benefit by paying off the loans with the highest interest rates. Whatever your plan is, discuss it with your mentor, who can help you determine the best plan for you.

#6 – Learn the Lesson of Contentment

Contentment is more than a nice word. It is a Biblical principle. The apostle Paul said that ‘godliness with contentment is great gain.’ Far more valuable than attaining the next object on your ‘wish list,’ contentment allows you to live without those objects and still be happy.

When you live with contentment, you understand a very simple principle. If you can’t afford it with cash…you can’t afford it! This is simply called living within your means. In fact, contentment is a the basic principle behind the movement toward minimalism. Minimalism is a beautiful way of life, and it is the opposite of materialism. (If you want to learn more about minimalism, I suggest you start here. You can also read about my journey into minimalism here).

A few of you may be thinking that debt comes regardless of contentment. Isn’t college just flat-out expensive? Even content people have to pay for things with big price tags. While I understand the sentiment, I challenge you to think outside the box. For example, while traditional college is a grossly inflated monster, there are plenty of cheap non-traditional options. While housing may be expensive, there are still ways to afford it without getting outside the box. Do some research and talk with your mentor.


These six steps are appropriate for anyone, even those who aren’t currently in debt. Whatever you do, don’t just bookmark this page and forget it. Living debt-free is not only doable for some people. It is possible for you, if you will take the first steps.