Resolve Now, Relax Later

Q

My husband and I have been struggling with our finances for years now and we want to turn things around. We would like to get a handle on our debt and become financially stable. In a few weeks, this will be our New Year's resolution. Do you have any concrete advice to get us started?

A

Your resolution is a good one and you are wise to be thinking about it ahead of time, well before Jan. 1 rolls around. I would encourage you to set the following goals. Put God first when it comes to your money (as well as other areas of your life). If you have not already done so, I encourage you to implement a daily spiritual plan of reading, meditation and prayer, and to focus on achieving a healthy attitude toward material things. In addition, by looking at your spending habits in light of the Gospels, you'll more effectively separate “needs” from “wants,” helping to overcome that habitual overspending.

Begin tithing and almsgiving. By giving back to God from your first fruits, you'll foster a closer relationship with God and experience the joy of assisting in the building of Christ's Kingdom here on earth.

Manage your checkbook. Keep it current and reconcile to your bank statement each month. Watch those cash advances from ATMs. Work to minimize these, but when necessary, at least make sure they get properly recorded.

Set a budget and track your expenses. If you need help with this, obtain a copy of our workbook, Catholic Answers' Guide to Family Finances (go to www.catholic.com). Create a debt-repayment strategy that works with your budget.

Debt can be a major obstacle in stabilizing one's finances. The emotional bondage that debt causes is a burden for millions of families (see Proverbs 22:7). By eliminating your consumer debt, you'll go a long way toward achieving “financial peace.”

Here are some keys to becoming debt-free.

• Commit to no further debt. If you can't pay off current purchases on your credit card, cut them up.

• Use a software program such as Excel or Quicken to help calculate a debt-repayment schedule.

• Review your budget for spending habits that can be changed to allow for a more rapid debt repayment.

• Be accountable to someone. Preferably, this can be your spouse, but if you don't have the discipline to stick with the plan on your own, bring in a friend, family member or pastor to help you stay on track.

• Set up a visual system to show your progress, such as a chart on the refrigerator that shows your declining debt balances. Depending on the circumstances, it's not uncommon for a debt-repayment plan to take from one to five years, so a visual aid, which tracks your progress, can help you persevere.

By implementing a solid financial plan right now—before you overspend for Christmas—and by sticking with your plan throughout the upcoming year, you'll find yourself well on your way to financial peace. God love you!

Phil Lenahan is director of finance at

Catholic Answers in El Cajon, California.

Reach Family Matters at [email protected]