This morning I opened up my devotional to find this verse:

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.  The commandments, "Do not commit adultery," "Do not murder," "Do not steal," "Do not covet," and whatever other commandments there may be, are summed up in this one rule:  "Love Your neighbor as yourself."

-Romans 13:8-9 (NIV)

This is very timely for my husband.  We recently sat down review our debt and plan our repayment.  We've been working on this for years, but life changes and family situations have caused our debt load to increase to the point that we needed to revisit our plan.

We started by making a list of everything we owe:  mortgage, car payment, credit cards, and student loans.  I pulled out our most recent statements and found, to the penny, how much we owed to each bank or company.  I also copied down all the interest rates and made note of any account that was over limit (I'm ashamed to say we had one credit card we didn't realize was over).  

I took all this information and wrote it across the top of a piece of poster board and hung it in our home office.  This is a private place that neither family nor friends ever see, but it is somewhere that my husband and I will be frequently reminded of what we are trying to achieve.  I left room under every balance so that each month we can cross out the past months amount and write down the new one.  This is helpful to me because I was surprised when I reviewed our statements to see how much we were paying in interest, and how little we were actually paying toward the principal.

Now we needed a plan.

My husband and I looked over the list to see if there was anything we could pay off right away.  There was!  We have a credit card that we use only for new tires and oil changes.  The balance was small, but paying it off in full would free up an extra $25/month that we could put toward paying off a larger balance with higher interest.

We also looked at our spending habits and what changes we could make there.  We decided two of the biggest changes we could make would be to eat-in more often, and cut back on how much I spend on clothes for my daughter and myself.

Now the tricky part.  Deciding which loans to focus on first.

I've been taught two different approaches to debt repayment.  The first is to focus on the loans accruing the largest amount of interest first.  These are usually your largest loans with the highest rate.  The second method is to pay off the smallest balances first to get some traction going and work up to the larger balances.

Looking at our balances, we make 11 different payments every month.  That's a lot to keep track of.  So our first goal is to pay down our credit card that is over-limit.  After that, we'll start knocking out the smaller loans one by one so that we have fewer payments to keep track of, and can begin making larger and larger payments toward our other balances.

The last thing we did was to add a sense of urgency to our plan.  The verse I quoted up above does not just tell us to pay back money that is owed, but it also talks about our debt of love to one another.  For years I have wanted to sponsor a child from Compassion International, but my husband kept reminding me that we hadn't yet got our own finances in order.  Family changes and continuing education have put us even farther from that goal.  But this past year my heart was broken when I heard the story of a boy from the Dominican Republic who never received a sponsor.

He waited and waited, but no one chose him.  

He helped his friends write letters to their sponsors.  Still no one chose him.

The Compassion International workers were amazing and not only convinced him to stay in the program to continue to receive tutoring and other assistance, but they influenced his life in such as way that he decided to learn English and is now a translator for Compassion teams visiting the Dominican Republic.

This story had a happy ending, but my heart breaks knowing that, even though it's rare, there are children waiting for a sponsor that never receive one.  This is the sense of urgency that I needed to get serious about paying off our financial debt.  That way, we have the freedom to stop worrying about what money we owe and focus on paying our debt of love to our fellowman.

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