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5 Things You Need to Know About Debt


These days everyone in my Bahá’í-inspired life coaching practice is looking for ways to reduce debt and save money. It is possible to wipe out your existing debt and learn how to live your life within your means.  As you’ll see below, the traditional approach is best combined with the Bahá’í Writings.

Here are five tips from the Bahá’í Faith that will help you on your way to debt free living:

1. Consider our debts as sacred, and pay them before everything else.

Our debts, however, should be considered as sacred and take precedence over any other thing [ i.e., payment of debts comes before contributions to the Cause] for upon this principle does the foundation of our economic life rest. (Shoghi Effendi, Principles of Bahai Administration, p. 20)

2. Pay our Huqúq (Right of God) and keep it up to date.

It is clear and evident that the payment of the Right of God is conducive to prosperity, to blessing, and to honour and divine protection.  (Baha’u’lláh, Huqúqu’lláh, #6, p. 2)

Well is it with him who ascendeth unto God, without any obligations to Huququ’llah and to His servants.  (Baha’u’llah, Lights of Guidance, p. 306)

Know thou moreover, that those who faithfully serve the All-Merciful will be enriched by Him out of His heavenly treasury.  (‘Abdu’l-Bahá, Huqúqu’lláh, #75, p. 26).

It purifies one’s possessions, averts loss and disaster, conduces to prosperity and honour and imparts divine increase and blessing.  (Universal House of Justice, Huqúqu’lláh, #100, p. 36).

3. Make teaching your first priority, then trust, work and economize.

Thou hast asked regarding the means of livelihood. Trust in God and engage in your work and practice economy; the confirmations of God shall descend and you will be enabled to pay off your debts. Be ye occupied always with the mention of Baha’u’llah and seek ye no other hope and desire save Him.  (‘Abdu’l-Baha, Baha’i World Faith, p. 375)

4. Focus on spiritual health.

I hope thou wilt become as a rising light and obtain spiritual health — and spiritual health is conducive to physical health — so that thou mayest be enabled to liquidate thy debts.  (Abdu’l-Baha, Tablets of Abdu’l-Baha, v2, p. 305)

5. Use this prayer:

And, finally, I beg of Thee by the light of Thy countenance to bless my affairs, and redeem my debts, and satisfy my needs.  (Baha’u’llah, Prayers and Meditations, p. 248)

There are steps we can take on the material plane too, to enable us to “walk the spiritual path with practical steps.”

Here are 5 additional steps you can take:

1. Stop using credit cards. One of the leading factors in the current economic crisis is people buying things on credit they cannot afford. The next thing they know, they find themselves unable to do anything more than make minimum monthly payments.

  • Minimum payments will keep you in debt because every month interest continues to accrue on your original balance. A $1,000 balance on a typical credit card can take 22 years to pay off if you make only the minimum monthly payments!
  • Don’t fall into the trap of credit card debt. Instead, avoid the hassle and expense by paying cash for the things you buy. If you want a big-ticket item, save the cash before you make the purchase. Only buy when you can afford to pay for the item in full before you bring it home.

2. Buy luxury items with cash. We all have extras and luxuries we want, but using credit to get them is a dangerous path to take. You’ll get much greater enjoyment from the extras in your life when you pay cash, rather than ongoing monthly payments.

  • Nothing takes the excitement out of a new toy or nice vacation more than the large payments that strain your budget month after month.

3. Create a realistic budget that includes debt repayment. The first step in gaining control over your debt is creating a workable budget. Rather than stifling you, a budget can bring you freedom! You’ll know where your money goes and you’ll set a spending plan so you can continue buying the most important things in your life.

  • Your budget should take into consideration all facets of your lifestyle, including housing, food and household items, utilities, savings, recreation and debt repayment.
  • If your budget doesn’t include room for debt repayment, there will never be enough money to pay off your debt. Take control of your financial reality by working with a realistic budget every month. Before long, you’ll see your debt diminishing while your savings grow.

4. Seek the help of a professional credit counselor, accountant or financial planner. The best way to be sure you’re making sound financial decisions is to seek out the help of a financial professional.

  • Credit counselors, financial planners and accountants are experts in the areas of savings, debt repayment, investments and tax deductions. Implement each of these areas into your finances to eliminate financial strain and secure a stable financial future.

5. Negotiate better rates with the banks or credit card companies. Many people assume they have no choice but to accept the interest and finance rates offered by their banks and credit card companies, but that isn’t always the case!

  • Talk to the people at your financial institutions. You may be surprised at how willing they are to budge.
  • If your credit is in good shape or you’ve made steady, progressive strides to improve it, you may be able to get lower interest rates on your debts.
  • You might also receive higher interest rates on your savings, giving you a double shot at eliminating your debt entirely and moving forward with your finances in a positive direction.

You can repair your debt problems and learn to avoid creating them in the future. These five steps will point you in the right direction and get you started on a new path to financial freedom and prosperity!

What’s been your experience with debt?  Post your comments here:

Step-by-Step Ways to Plan a Budget

My very favorite budgeting program!  Try it out for free!  

The need to make a budget came up in one of my life coaching sessions this week. We were talking about the Bahá’í teachings on how to educate the girl children, in which the concept of household management emerged.Her husband had always managed the family’s budget and she wanted to take over this responsibility. So this blog posting is written for her!

Using a budget is one of the best ways for you to determine where you stand financially so you can plan for future expenses. A budget can help you live within your means, get out of debt, and have money available for a new car, vacation, or education.

Planning and using a budget doesn’t have to be complicated. Plus, once you’ve put your budget into place, it makes spending decisions a snap.

Here’s how to plan your budget, step-by-step:

1.Set goals. Before you begin to plan, it’s important to know what your financial goals are.

·Do you want to pay off your debts?

·Do you want to save for a new home?

·Have you always wanted to travel overseas?

·Are you thinking about your children’s educational future?

Write down your family’s financial goals and post them where everyone can see them. This will help you all remain focused on reaching your goals rather than giving in to temptations to buy things you don’t need.

2.Determine income. Figure out how much money you currently have coming into your home. It’s hard to establish a budget if you don’t know how much money you have at your disposal. This would include:

  • Employment income for each family member contributing to the budget
  • Interest earned from money markets, savings accounts, or investments
  • Inheritances
  • Any other form of income

3.Figure out your expenses. Write down your family’s expenses. Listing each bill will help you determine how much money you need to earn each month to reach your financial goals.

·List every bill your family has regardless of how often it’s paid.

·Group expenses together (insurances, credit cards, etc.) to make them easier to calculate.

·Include cash for each day, such as money for gas, lunches, tolls or parking.

4.Include savings. Remember to pay yourself! Instead of waiting to determine what money is left after paying the monthly bills, include your savings account as a bill and pay it just as you would any other expense.

5.Subtract expenses from income. Add together all income sources and then add together all expenses. Subtract the expenses from the income, and this will tell you what financial shape your family is in.

6.If your income is greater than your expenses… If you have money left after paying the bills, you may choose to do one of the following:

  • Put additional money in savings.
  • Invest the money with the help of a financial planner.
  • Pay off credit cards or other monthly credit accounts so you can get out of debt.

7.If your expenses are greater than your income… If your expenses are more than your income, you have some decisions to make. They may not be pleasant, but if you want to get out of the avalanche of debt, changes are necessary.

Here are some changes you may want to make:

  • If your home is too large for your family, you may want to downsize into a home with cheaper payments.

  • Do you have, and do you need, more than one vehicle? If two or more cars are necessary, by all means keep them. However, you may be able to buy vehicles that are cheaper to own and maintain. If all the cars aren’t necessary, why not sell the extra ones?

  • Avoid eating out. You may not think eating out is that expensive, but a family of four can easily spend $40 or more each time they eat out. That same amount of money can buy groceries for several meals, instead of just one.

  • Put a hold on credit card spending. Either cut your credit cards up or put them in a plastic bag filled with water. Place the bag in the freezer and leave it there.When you need to use it, you’ll have to let it thaw gradually – putting it in the microwave to thaw, will destroy the card!

  • As you’re able to pay off one credit card, close the account. Then use the money you spent each month on that bill and add it to your payment for the credit card with the next highest interest rate. This process accelerates the elimination of your debt.

And remember this quote from the Bahá’í Writings:

Trust in God and engage in your work and practice economy; the confirmations of God shall descend and you will be enabled to pay off your debts.(Abdu’l-Baha, Baha’i World Faith, p. 375)

It’s possible to create a budget you and your family can live with. By following these step-by-step instructions for planning a budget, you’ll be taking a financial step in the right direction. Stick to your budget, and before you know it you can be out of debt and saving for something special!

What helps you budget?  Post your comments here: