Debt-free living in the New Year

Debt-free living in the New Year
(Source: KPLC)

LAKE CHARLES, LA (KPLC) - Imagine living debt-free for decades?

It's doable, just ask associate pastor at Trinity Baptist Church in Lake Charles, Dan Batchelor, who's been living debt free since 1985 and for the past three decades he's been helping others achieve the same goal.

"Most people, the average person really, lives paycheck-to-paycheck and carries somewhere between $16,000 and $20,000 in credit card debt," he said.

And with the New Year upon us, many are putting together their resolutions list with a fitness goal as one of the most popular.

"You have to be intense about wanting to get in shape and you just have to be as intense, if not more, about getting out of debt," Batchelor said.

For several years, Batchelor's been teaching Dave Ramsey's methods to help people eliminate debt and save for the future which consists of seven steps:

  • Baby Step 1 – $1,000 to start an Emergency Fund
  • Baby Step 2 – Pay off all debt using the Debt Snowball
  • Baby Step 3 – 3 to 6 months of expenses in savings
  • Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement
  • Baby Step 5 – College funding for children
  • Baby Step 6 – Pay off home early
  • Baby Step 7 – Build wealth and give

"Pay off that smallest debt you have, you're still paying for everything else but, you become very intense on that smallest one," he said about step two. "Say it's a credit card to a local store and you pay it off then you take that money you had to pay on it and then you apply it to the next one until you wipe that debt out."

When it comes to step three Batchelor says, "If something happens and one of the breadwinners ends up in the hospital or disabled for a while, they can coast through it and not suffer."

Skipping over to the sixth step, paying off a house is a lifetime achievement and Batchelor said by the time you get here everything will get easier.

He should know, he's been living debt-free since 1985.

He suggests the best way to avoid going into debt is by creating a budget.

"People hate that word," Batchelor said. "When I counsel with people I tell them I'm about to use a dreaded word and they look at me like I am about to curse at them and to some folks that is a curse word."

He also wanted to emphasize to stop swiping that plastic.

"You don't feel the pain as much as you do with real cash," Batchelor said. "Hide your credit cards from yourself, do yourself a favor."

Trinity Baptist Church located at 1800 Country Club Rd. will begin their free nine week-long financial classes on Wednesday, Jan. 10, at 6 p.m. for more details call, 337-480-1555.

To learn more about Dave Ramsey's baby steps, click HERE.

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