Struggling with credit card debt? If so, you are not alone. According to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit, credit card debt in America has increased by $45 billion from Q1 of 2023. In fact, Virginia ranks fifth in the nation for average credit card debt, with $6,224 per person. Average household debt at the end of 2023 was $104,215. Do you or someone you know need some tips on getting out of debt? Here are a few steps to take . . . 

First, let’s consider the importance of financial margin in our household budgeting. Here, “margin” refers to the difference between total income and total expenses. Margin represents the amount of money left over after covering all necessary expenditures, such as housing, utilities, groceries, transportation, insurance, and debt payments. Household margin plays a crucial role in financial stability and flexibility, as it determines the ability to save, invest, and handle unexpected expenses. 

Most families have little financial margin (flexibility, wiggle room, or a nest egg). With inflation on the rise, salaries flat and the increased costs of housing, food, transportation and other basic necessities, families are being squeezed. (The median home cost in RVA is $400,000.) As a result, we resort to consumer debt (credit cards and other revolving debt) just to live. But a broken washing machine, a transmission gone bad, or an unexpected MRI can throw a family into even more indebtedness. 

The good news is that it doesn’t have to stay this way. There are reliable resources that can help us gain financial freedom and become debt free. (Generally, the exception to being debt free is one’s home mortgage.)  

In his book Margin: Restoring Emotional, Physical, Financial, and Time Resources to Overloaded Lives, Dr. Richard Swenson offers some steps to creating financial margin (pp. 138-148). 

• Seek financial margin that honors God. Be wise about how we spend our hard-earned money. 
• Live within our harvest (our means) as much as possible. Create boundaries based upon contentment, running counter to the desire to have more. 
• Distinguish between needs and desires. Dave Ramsey defines our basic needs as the “four walls” – food, shelter, utilities and transportation. When we focus on the basic needs, we will be more likely to avoid borrowing to purchase niceties. 
• Make a budget. This is where we give every dollar a name. We live within a budget and seek to attain financial margin. 
• Start an emergency fund. Dr. Swenson suggests three to six months of usual spending. This is similar to Baby Step 3 in Ramsey’s Financial Peace University.
• Pay off credit cards and work toward paying as you go. At first, this may require significant sacrifice and creative ways to increase cash flow.  
• Resist impulse purchases. Instead, create a priority list and be wise about sticking to a budget. 
• In all things, Kingdom first. “But seek first his kingdom and his righteousness, and all these things will be given to you as well.” (Matthew 6:33) 

If you are interested in learning more, Ramsey Solutions has some great free resources. If you or a friend are interested in going through Financial Peace University, please let me know. If enough people are interested, perhaps we could start a class here at HRBC — please email me at the address below.  

May God bless you and give you the power and strength to seek financial freedom!  

In Christ’s care,