“Taming the Debt Dragon,” Ensign, Oct. 2004, 50–53

Taming the Debt Dragon

Readers explain how they were able to get out of debt and stay out.

We looked at our bills and credit card statements in numb disbelief. How had we fallen into debt again?” writes one member. “It wasn’t so long ago that we had paid off all our debts except for our home mortgage. We tried to be frugal and buy only what we could afford. We paid an honest tithe. We tried to follow the prophet’s counsel to stay out of debt. Yet here we were faced with a mounting pile of bills and a growing number of creditors. How had it happened?”

Have you ever asked yourself that question? While circumstances will vary, the answer is basically the same for all of us—we are spending more than we take in. Why? Can we control it?

The best answer—consistent with repeated advice from the Lord’s prophets—is to stay out of debt. We have been repeatedly counseled to live within our means.¹

But what can you do if you find you are already in debt more deeply than you realized?

We asked our readers to tell us what they did to get out of debt. Here are some of their stories.

Pay Tithing First

Carol Dawn McGlamery of the Grantsville 10th Ward, Grantsville Utah Stake, remembers how much her life changed when she became a widow at age 58. “I budgeted what I had and I was debt free for a few years,” she writes. “Before long I had to take out a three-year loan, and I had a modest sum on a credit card. I became so worried about making ends meet that gradually I got behind on paying my tithing.

“I actually got physically sick from the stress. Finally, I talked to my daughter about it. She said, ‘Let’s sit right down and make a plan based on your present income.’ It was a simple plan: pay tithing first, the loan payment second, and then a little on my credit card debt. I firmly committed to stay with the plan and to cut back on the money I spent on gasoline and long-distance phone calls.

“Before long, a friend needed my help after an illness. She insisted on paying me. I was able to pay off my credit card debt in two months—always paying my tithing first. Soon I had another opportunity to provide home care for another friend. This new job allowed me to make double payments on my other loan. I paid it off in nine months. What a blessed feeling of relief—no debt!

“Now I make sure I never use my credit card unless I have the money to pay it off the next month. I will not charge anything else. I will go without first. I’m so grateful to Heavenly Father for His help and so happy to be debt free.”

Track Your Spending

In order to establish an effective budget you need to find out how much you are spending and where the money is going. “Track your spending for one month,” suggests Dan Strasser of the Tucson Tortolita Ward, Tucson Arizona North Stake. “I like to think of it as taking a financial picture. Every time you spend money ask for a receipt, or if you don’t get a receipt just write the purchase down in a notebook. The idea is to track not only what you spend but also when you spend it and what you spend it on. You will also track the bill paying: rent, mortgage, utilities, and so on.

“At the end of the 30 days you will be able to look at this notebook and see objectively where all your money went. To make this tracking most effective for a home budget, be sure the whole family is participating. If just one or two of you are not tracking your spending, it can throw off the entire 30-day record and give you an inaccurate picture of your cash flow.”

Cut Back Where Possible

“One of the first steps we took after doing an analysis of our finances was to see if there was any place in our budget that we could cut back,” writes Dale W. Ricks of the Gooding Third Ward, Wendell Idaho Stake. In addition, “we felt a strong impression to get a year’s supply of food, which we did. We found that by having a year’s supply of food, we only bought things that were on sale except for milk and fresh vegetables or fruit. By doing this, we cut our grocery bill by 30 percent, a substantial savings.”

Brother Ricks explains that he and his wife applied the savings from reduced expenses toward their existing debts: “As we put our plan into effect it gave us a great feeling of comfort to be in control. Many of our small debts were paid off quickly, and we could see that we were making progress in becoming debt free.”

Observe the Law of the Harvest

Sometimes we are urged to buy now and pay later. “This is not the order of the law of the harvest,” writes David Lusvardi of the Palo Verde Ward, Las Vegas Nevada Redrock Stake. “The planting must come before the harvesting. President Gordon B. Hinckley has told us to avoid unnecessary debt. But this is not the message we hear from other sources.

“We should be careful not to look for the harvest before planting the seeds. It is unwise to make commitments to pay at a future time, assuming that we will have the money to pay. If we do not have the money now, then we should be aware that there is a chance we will not have it later. We should keep our economics in the proper order of planting and harvesting.”

Use Self-Discipline

“Every personal and family situation is unique in one way or another,” writes Raymond McAferty of the Valle Verde Ward, Las Vegas Nevada Green Valley Stake. “That’s why getting out of debt and staying out of debt is a difficult challenge to accomplish. The uniqueness of your particular situation requires that you and your family put together a workable plan. The plan must be appealing enough to all concerned that they are willing to commit to do whatever it requires until the objective is realized. It takes discipline and commitment to get out of debt and stay out of debt. …

“My wife and I decided to minimize the expenses we had some control over: automotive, food, fuel, and recreation. For example, we decided to keep our older automobiles rather than trading up to newer ones. Our cars were both paid for and still served our needs well. In addition, I also ride the city bus to work most days, allowing us to save on gasoline and on the upkeep of my car.”

Go with Less

“Some people can gain mastery of their finances only by doing without,” writes Mike Jayme of the Santaquin Eighth Ward, Santaquin Utah Stake. “However, often it simply requires our doing with less than the ideal. As a child, much of my clothing was acquired through quality thrift stores and bazaars. As my wife and I have set out to clothe our family, much of our clothing is secondhand. If one can survive not having the latest styles, one can still be quite nicely dressed without incurring the expense of new clothes.

“Another way we scaled back was in the purchase of our family home. As we made initial steps toward home ownership, we visited with real estate agents and mortgage lenders. They told us we could handle a much higher monthly mortgage payment than we believed we could. Because we were guided by a budget, we knew these potential lenders did not adequately take into account other expenses we had such as tithing, medical expenses, food, and utilities.”

Broaden Your Education and Skills

“Education can broaden your career possibilities, thereby expanding your ability to earn a good wage,” Brother Jayme continues. “I admire those who can repair their home appliances or cars themselves. If we can develop these skills, we can save a lot of money. We can always benefit from more learning, whether formal, spiritual, or trade related.”

Live Thriftily and Save

Farhana Hibbert of the Princeton Ward, Pocatello Idaho East Stake, writes, “Our first year of marriage we lived without a car. We were blessed to find an apartment two blocks from the university. We were also blessed with employment on campus. The apartment we had found was even centrally located between our classes and our jobs. We walked everywhere during that year, and everything we needed seemed to be within our walking distance. Friends or in-laws who visited would sometimes give us a ride to the grocery store. We went on dates to restaurants we could walk to or went on double dates with friends who drove. Sometimes we rode the bus. We both worked an assortment of jobs, applied for a variety of scholarships, and lived thriftily.

“Now we always pay our tithing, and we plant and harvest a garden every year. But we have found that the key to staying out of debt is to save, save, save. Unexpected necessities seem to come at the most inopportune times; if you have put some money away for emergencies, you won’t have to go into debt to take care of them.”

Look at Your Budget Balance

“Once you’ve created an appropriate budget,” writes Mark Stewart of the Allen Fourth Ward, McKinney Texas Stake, “don’t determine whether you can afford something by looking at the balance in the checkbook—look at the balance in the budget. The checkbook balance will include money needed for nonmonthly payments such as car insurance and medical expenses. If it is still tempting to budget by checkbook balance, place your paycheck into a savings account and transfer only enough money into checking to pay for the normal daily and monthly payments such as tithes and offerings, food, utilities, and gas. The money needed for infrequent expenses is then safe from impulse decisions and is earning a better interest rate.

“Also, when making a purchasing decision, it is helpful to think of the yearly cost of an expense before making a commitment. For example, if cable TV service is $20 a month, ask yourself if $240 a year is a worthwhile expense for the value received. A common advertising pitch is ‘for only pennies a day, …’ but 99 pennies a day is $361.35 a year.”

What I Have Learned about Remaining Debt Free

The number one key to remaining debt free is to first be debt free with the Lord. Pay a full tithe.
Maintain a personal savings account. It is better to save and buy than to borrow and buy.
Be strong by refraining from buying unnecessary things, even if you have the money to pay for it.
Always have a list when you shop. Distinguish between wants and needs. A sale isn’t really a sale unless you really need what’s on sale.
Buy only what you can afford.
Rely on inspiration from Heavenly Father. Prayerfully seek His advice for not only spiritual matters but also financial concerns.

Christiane Fechter, Centerville 19th Ward, Centerville Utah South Stake.

Illustrated by Richard Hull