Unprecedented economic times call for drastic measures. Many who have lost jobs or are in danger of losing them are beginning to realize that they have been living well beyond their means and are not prepared for difficult times ahead. Highly consumptive and competitive lifestyles are leading to dangerous personal financial meltdowns for some. Never content, they continually spend to impress others and “keep up with the Jones’”. (But, those who seem to “have it all together” may be secretly in financial trouble, too.) Unfortunately, many people don’t even realize they are headed toward a financial meltdown until it is too late.

“Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever and a crown is not secure for all generations.” (Proverbs 27:23)

Ask yourself these questions about your own personal financial condition (be honest with yourself):

• Total Debt: Do you know today the total sum of your debts, the interest rates of each, and how long it will take to pay them off? (Afraid to look?)
• Percentages: Do you know the total percentage of your “Big 3″ monthly expenses (mortgage, car loan, debt) relative to your net spendable income? Do you know how much the total should be?
• Expenses: Do you know the total amount of your complete monthly household expenses (what it takes to run your household)?
• Accounts: Do you balance your check book monthly?
• Spending Plan: Do you have a spending plan you consistently review and live by?
• Credit Cards: Do you have a definite plan to pay off each of your credit cards by a specific date?
• Saving: Do you have at least 3 months of your household expenses in savings to help bridge the gap in case you were to lose your job?
• Giving: Do you tithe or give to help others in need?
• Plans: Do you have a personal financial plan?

A “no” answer to one or more of these questions indicates a financial concern but also an opportunity for you to work with a professional to help you determine your status and gain control of your money and your finances. To avoid being burned by a financial meltdown, know your complete financial condition, monitor it consistently, carefully manage how you are spending your money and live within your means.Serious warning signs of an impending financial meltdown (one or more is a signal for the need to take immediate action):

• Checks bouncing or credit cards denied or over the limit.
• Being at, near, or over credit limits on one or more high balance, high percentage rate credit cards.
• “Too much house, too much car” — mortgage, car loan and debt levels well over acceptable percentages of debt to net income guidelines.
• Borrowing from a 401k or other retirement account or taking out a home equity loan (HELOC) to pay for anything.
• Inability to pay monthly bills, debts, or mortgage payments on time.
• Being in debt while continuing to finance lifestyle on credit cards (food, clothing, and eating out, etc.).
• Paying only the minimum monthly payment on one or more credit cards with large balances. Or, inability to pay them that all, incurring mounting monthly finance charges and increasingly high interest rates.
• Secretly hiding bills and spending from family members.
• Temptation to gamble, play the lottery, day trade or any other high risk desperation moves to try and score the “the Big Deal”

Immediate strategies to employ:

• PRAY: Pray FIRST and ask God for wisdom, guidance and discernment to face the hard truth about the areas in which you are financially challenged. Ask for the willingness to make the necessary sacrifices and take action steps today to do something to change it and to find others who can help you.
• GET COUNSEL: Find an experienced, qualified professional to help you start working through the process and how to change your current financial situation. Ask for personal referrals from friends and family members or through your church. Also, find a godly counselor or accountability partner to help you walk through the emotional and personal challenges, as well.
• EVALUATE THE “BIG 3″: Look at your “Big 3″ monthly expense budget busters: household, car, and debt. If you are over the established debt to income ratio guidelines for a typical household of your size, you could be in trouble . Ask your counselor or professional advisor to help you determine what you can refinance, sell, rent, pay down or paid off quickly in order to avoid foreclosure, bankruptcy, or a total financial meltdown. Determine appropriate strategies and take action NOW!
• STOP CREDIT CARD USE: Immediately stop all credit card debt (cut up all cards or freeze them in a bag of water!). Pay all bills and expenses from the cash in separate envelopes earmarked for all expenses. Continue the practice until you are out of debt.
• FIND WORK: If you have a job or work coming in, do all you can to keep it. If not, do something every single day to find new work. You may even need a second job for a while to help pay down debt.
• LEARN MORE: Study financial programs to learn more about managing your finances. There are many great tv programs, courses, and books as well as radio programs and podcasts you can listen to even during drive time. Ask if there may be a debt counseling or financial program offered at your church.
• LIVE MORE SIMPLY: Eat at home, take your lunch, enjoy low cost outings such as hikes and picnics, reduce clutter, sell what you can and pay off debt with the proceeds or give away items to charity. Keep only things you really need or that have great meaning to you.
• WAITING LIST: Understand the difference between a want and a need. Wait at least 24 hours before buying anything you feel like you MUST have. Is it a true need (basic food, clothing, shelter, medical)? If not, write it down on a “waiting list” and wait until you have the cash to purchase it.
• STAY HEALTHY: Eat right, get enough rest, exercise to avoid medical bills and have the strength and stamina to face difficult days ahead.
• BE CONTENT: Learn to be content with what you already have and how to manage the financial blessings you have been given.
• BE PATIENT AND THANKFUL: Realize that even in adversity, God is teaching you lessons and building your character during difficult times because He loves you. Ask Him to show you what He wants you to learn. You will then will be able to share your experiences and lessons to help others in similar situations. This is a good thing and something to be thankful for.

Thankfully, God has already given us all we need to know about how He expects us to manage our finances. Study His biblical principles and put them into action. As you work toward becoming debt free, you will see your situation begin to change over time and you will learn how to start living with peace in God’s economy.“Be anxious for nothing, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which passes all comprehension, will guard your hearts and your minds in Christ Jesus.” (Philippians 4:6-7)

Copyright (c) 2008 Sheri Dresser. All rights reserved.