Successful strategies do not just happen by coincidence or accident. Certain dynamics must exist to enhance the likelihood for success. The dfree ® strategy includes three key areas as part of an effective blueprint for success. Foremost, you must clearly identify your central goal. Do you want to pay off all credit card debt? Save 15 percent of your monthly income to purchase a car? Pay bills on time and improve your credit rating?
You must be as specific as possible in identifying and articulating the particular goals that will form the pillars of your plan. Having a goal without a system for reaching that goal is like having a destination without a vehicle. Many systems for debt-free living and financial freedom have been created, and you should investigate as many as possible to see which ones address your situation and are compatible with your ethical and spiritual values.
The second key to a successful plan is assembling the support needed to execute your plan. Great athletes have trainers and coaches; great leaders have mentors and advisers; great businesspeople have dedicated teams and administrative sup- port. Your goals to financial freedom are more likely to be achieved when you’re sharing the journey with peers and others who understand where you’re coming from and, better yet, where you’re going. It is easier to accomplish great things when we are not trying to do them alone.
The flip side of accountability is having a community with whom you can share your milestones; success is not fully achieved until it is recognized and celebrated. And the celebration of success motivates us toward more success. The dfree ® strategy builds success into the process so that small victories are achieved and then celebrated. Support groups, like the ones we formed at our church, should be positioned to create affirmation through celebration on a continual basis.
Finally, you must align your plan’s implementation with a schedule. While there are a variety of ways to attack your debt, a basic way is simply to create a pay-off calendar. You make a list of all money you owe — mortgage, credit cards, car payments, school loans, everything — and then the amount you owe for each, the amount of the monthly payments, and the length of time at this rate of payment to fulfill your debt. It can be daunting.
The Gallup organization reports that two thirds of people in this country are living without a spending plan or a budget; among African Americans and Hispanics, the numbers are predictably the highest. Research throughout the past decade consistently reveals that roughly 70 percent of Americans live paycheck to paycheck, with the majority of these people using high-interest loans or credit cards to cover unexpected expenses and emergencies. Without a spending plan, a budget that works, a personal finance spreadsheet — whatever you want to call it — you will never achieve your freedom. If your debt is the elephant in the room that you’re trying to eat, then a sound spending plan is your knife and fork.
While there are a variety of ways to arrange the details and do the math, bottom line, your strategy must provide answers for the following questions:
- What’s my income-to-debt ratio? How can I focus on paying off my current debts without incurring more?
- What emotional and psychological triggers contribute to my current financial slavery?
- How will I handle these triggers moving forward? What do I need to do differently in order to change my spending habits?
- Who’s going to help me? Who will support and encourage me on this journey to freedom?
- How long will it take to become financially free? What’s going to motivate me to keep going when I’m discouraged and tempted to give up?
The essence of dfree ® is to help you experience success in life. We have learned that how we handle money is a reflection of how we handle life. People who mismanage their finances are people who mismanage their lives, because money is just a small part of life. In that sense we really do not manage money at all. We manage life and use money to support our needs and goals. This is a battle. It is very difficult work. The truth is that if people could remedy their financial affairs without assistance, then they would be doing it.
While many people already have the right information in their possession, they’ve struggled to implement it into their lifestyle. Like diets and other personal pursuits for self-improvement, it’s easy to start a new program — and many people begin with enthusiasm and good intentions. Just consider how crowded the gyms and workout facilities are every January and then how attendance has dropped off six weeks later.
Similarly, with programs to improve financial health, many people often begin, but the changes don’t stick and fail to have any lasting impact. People start reading books and never finish; they start forming budgets but don’t adhere to them; they set aside money in a savings account and spend it the following month. A sale on that new sofa they’ve had their eye on becomes justification to raid the emergency fund.
No, the difficulty we are confronting is not informational. The problem is emotional, psychological, and spiritual. We need solutions that attack these elements of our problem.
A written spending plan accompanied by a thoughtful strategy that identifies your past weaknesses and provides alternate behaviors can become your map to freedom. Numerous sources provide excellent work sheets and software programs for tracking your spending and designing the blueprint for your spending plan. Here is a basic monthly budget template that you may find helpful in creating target goals for a balanced strategy. I’ve compiled the percentages from a variety of financial sources as well as the experiences of participants in our dfree ® movement.
Tithing/Giving . . . . . . . . . . . . . . . . .10%
Savings . . . . . . . . . . . . . . . . .10%
Investing/Retirement . . . . . . . . . . . . . . . . .5–10%
Emergency Fund . . . . . . . . . . . . . . . . .1–2%
Housing . . . . . . . . . . . . . . . . .25–35%
Utilities . . . . . . . . . . . . . . . . .5–10%
Food . . . . . . . . . . . . . . . . .5–10%
Transportation . . . . . . . . . . . . . . . . .10–15%
Clothing . . . . . . . . . . . . . . . . .5%
Medical/Health/Insurance . . . . . . . . . . . . . . . . .5–10%
Personal Discretion . . . . . . . . . . . . . . . . .5%
Eating Out and Leisure Activities . . . . . . . . . . . . . . . . .5 – 10%
Debts . . . . . . . . . . . . . . . . .5–10%
Keep in mind that this is an ideal budget, a target to move toward. Obviously, as you get started, you will likely have to contribute more than 5 percent toward paying off your debts and cut in other areas, such as eating out, leisure activities, personal discretion, and clothing.
We are accountable to God for outcomes. Jesus’ parable about the talents in Matthew 25:14-30 suggests that God is concerned about measurable outcomes. My staff knows my definition of accountability — it is the ability to count! At some point, numbers matter. And if we’re serious about our freedom, then we must set some goals that include numbers and new behaviors and commit both to God. Then we can devise strategies that help us reach those specific goals and be accountable to God for executing the strategy and attaining our freedom.
Excerpted with permission from Say Yes to No Debt by DeForest B. Soaries, Jr., copyright Zondervan.
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Do you have a plan for getting your family budget in order? What about paying down any debt, school loans, or your mortgage? Come join the conversation on our blog!