By Jason Collum, AFA Journal staff writer

July 2002 – Silence is broken in the dimly lit room by a ringing phone. You wearily pull yourself out of your chair, dreading the call before you even know who is on the line.

A voice on the other end gets right to the point.

“We haven’t received a payment from you in two months. If you don’t send us a check or money order within two weeks, we’re going to have to call the loan and repossess the car. This is going to damage your credit. Do you want that to happen?”

“No,” you say to the caller, stressing the fact that you want to pay, and you’ll send them some money as soon as you can, but you have other bills you have to pay as well. They demand theirs first. You say you’ll pay them as soon as you can, and hang up.

You return to the table, where you and your spouse have been fretting over a pile of bills representing what seems to be a mountain of debt. Being so indebted has put an extra amount of stress on both of you these last few months, and it’s beginning to wear on your marriage. 

There’s got to be a way out of debt, you say. There’s got to be a better way.

There is.

• • •
“When Sharon [his wife] and I were in our twenties, we started with nothing,” said Dave Ramsey, host of a popular nationally syndicated radio talk program, The Dave Ramsey Show. “By the time we were 26, we had a little over four million dollars in real estate, with a little over a million dollars in net worth. We were having fun, I tell you.

“But we borrowed too much money,” Ramsey said. “It caused us to lose everything we owned. By the time we were 30, we were broke, bankrupt, foreclosed, repossessed, all these things. It was awful.”

Ramsey has used his experience both in personal finance and in years of financial counseling to help several thousand families and more than one million listeners daily to his call-in show, which is carried by more than 125 radio stations. He’s also used his experience to write numerous bestselling books, including Financial Peace and More than Enough. What sets Ramsey apart from many other financial counselors, though, is the fact he approaches his advice from a Christian viewpoint. It’s a message that is being well-received by hungry audiences. It’s not something he does for kudos, though.

“God’s been so good to us, if I was going to stop talking about Him, I’d be scared,” Ramsey said. “I’m not doing it to impress God, but I think there’s a scripture that says if we’re ashamed of Him, He will be of us.”

His advice might not be as good if he hadn’t lived it and seen firsthand how God’s plan for our financial lives is the best.

“When we got to the bottom, we decided we weren’t going to handle money like that anymore because apparently what I’d been taught didn’t work,” Ramsey said. “We dove into the Bible and found common sense and started what in our culture appears to be a pretty radical way of living but used to be called normal.”

That abnormal way of living involves living on a budget, or a plan, and not borrowing money.

“It’s grandma’s ways of handling money is what it amounts to,” Ramsey said. “In a culture where everybody has a fleece car in the driveway, a satellite dish out back, and a 32-thousand-dollar bass boat, living without borrowing money is a real unusual thing.”

So you’re ready to get out of debt
Tired of being in debt? Tired of feeling as if every creditor in the country is about to send a collector to your front door, or begin to garnishee your wages? You may just be in the right frame of mind for getting out of debt, Ramsey said.

“It requires a healthy level of anger,” he said. “You have to be sick and tired of being sick and tired, because what we’re really talking about here is changing behavior. And the way behavior is changed is in the spiritual realm and the emotional realm. You are restructuring who you are in order to get out of debt. And that requires some emotion, because it’s a gut-wrenching process. You’ve just got to sell stuff, look in the mirror and say, ‘No, you can’t have that,’ write down a plan, be in agreement with your spouse.”

Ramsey isn’t alone in saying getting out of debt isn’t just a matter of paying off your bills. Others, including Jim Horan, one of the founders of Christian Credit Counseling Centers, based in Houston, Texas, said getting away from the behavior or spending habits that lead to debt is crucial.

Identifying the bad habits and practices and putting a stop to them will help a person or couple go a long way toward reducing and eventually getting out of debt.

How do people get into debt?
Ramsey sees common threads among age groups as to how they get into debt. He says among people in their 20s, it’s common for them to be carrying about $20,000 in debt, accumulated from student loans and credit cards obtained while in college.

With people in their 30s and 40s, it’s most often financial problems caused by failed businesses started on credit, or spending above their means.

“We run into people who’ve bought too much home, or continually spend on the credit card and then debt consolidate, get a big second mortgage, and then they’ll get more credit card debt because they didn’t change. Now they’ve got a real mess.”

Horan said many of CCCC’s clients often cite circumstances such as a spouse’s overspending, the loss of a job or medical expenses as excuses for being in debt.

“That may be on the outskirts what caused them to be in the stress they’re in now, but [usually] they were already living paycheck-to-paycheck, or close to it,” Horan said. 

Easy credit is a pit of quicksand
Caller after caller to Ramsey’s program reveals part of his or her debt being due to credit card spending. This isn’t surprising, given that American consumers charged more than $400 billion on their credit cards in 2001, according to RAM Research. And, according to ABC News, the average American household has at least one credit card, and carries a balance of $8,523.

All this charging and borrowing adds up. The Federal Reserve’s most recent figures show, as of March, American consumer credit debt stood at a mind-boggling $1.6862 trillion. To put this into perspective, that amount would completely pay for 84,310 new automobiles costing $20,000 each.

Ramsey has no use for credit cards, and recommends people scrap them.

“Get rid of them totally,” Ramsey said. “I own two Visa debit cards. They come out of our checking accounts, and they’ll do everything a Visa [credit card] will do except rent a car at Hertz or Avis, which are too expensive anyway. I rent cars, I go to hotels, I’m on an airplane half my life, and I do everything normal people do, with a debit card. And guess what: you can’t go in debt with a debit card.”

Debit cards, issued by banks, are accepted at many locations just like a credit card. However, instead of borrowing money at each transaction, a debit card immediately takes money out of a consumer’s checking account, preventing future debt.

While Horan doesn’t advocate getting rid of credit cards and never using them again, he does issue a stern rule for using them.

“I tell people Satan doesn’t reside in a piece of plastic,” Horan said. “There’s nothing wrong with having a credit card. But the moment you can’t [pay it off] each month, you need to cut it up and send it back with a letter saying ‘cancel me.’”

Is bankruptcy for Christians? 
When indebtedness is overwhelming, many people choose to file bankruptcy. In fact, about 1.5 million Americans filed for bankruptcy in 2001, a 19% increase from the year before. But is it an option Christians should consider? Horan said the answer is, almost always, no.

“The last time I checked, any time you don’t pay for a debt, that’s stealing,” he said. “[I have recommended bankruptcy] probably three times in the last 12 years. I’ve never been able to justify it other than for getting the family unit back together. One couple was in here ready to pick up a gun and a knife and shoot and stab each other,” Horan said. “In that case, we sent them to a Christian attorney and they went through the bankruptcy, but they also sought counselling from their pastor. But we instructed them, as did the attorney, they still had to go back and pay the debt. 

“You’re going to pay it now or you’re going to pay it later, but you are going to pay for that debt,” Horan said. “And it’s cheaper to pay it in this world.”

Help wanted
There is help available for those who want to get out of debt, and it’s not as far away as some may think.

“We publish lots of things online at daveramsey.com,” Ramsey said. “The most popular of the books we have out is Financial Peace, which is the original book that started this movement. It has step-by-step guidelines on exactly what to do. It’s a how-to-get-your-life-straightened-out-and-have-financial-peace book. The other thing I would suggest is just be a reader. There are tons of fabulous books out there.”

For those who aren’t comfortable going it alone, organizations like Christian Credit Counseling Centers may be the answer. CCCC offers debt consolidation, fast debt reduction, credit repair (a service CCCC doesn’t charge for or market, but they don’t remove items that really are part of the customer’s credit history). They also offer a new home-study guide called Pop Horan’s Get-Out-of-Debt-Now Home Study Course, which teaches the fast-debt reduction service. 

CCCC doesn’t only work with people to pay off their creditors, but they also try to teach them along the way to stop getting in debt by managing money correctly. 

Horan said a major part of managing money correctly is recognizing who the money really belongs to.

“We try to stress to our clients that of every dollar they make, the entire dollar is God’s, not theirs. He’s given us 90 cents of it. It’s all His; we’re just stewards of His money. 

“Also, you have got to tithe. I don’t believe blessings or anything else comes until you pass that 10 percent level.”