Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty

How To Get Out Of Debt, Stay Out Of Debt And Save For Your Future

June 6, 2011 by  

How To Get Out Of Debt, Stay Out Of Debt And Save For Your Future

If we are stressed about money while we are healthy and able to work, think what it will be like to try to support ourselves when we are older, not so healthy and not able to work as much as we have in the past. Who will support us then?

People are working two or three jobs, and bankruptcies and foreclosures are at an all-time high with little hope in sight. We need to change our financial habits and get a handle on our debts. If we understand the value of money and its power, we can use it to our advantage to make our lives more productive.

Can you imagine how much money you could have at retirement if you saved up the money for all your purchases (including a modest car and home) before you bought them, then saved the rest of the money that you would have paid in interest to the bank? You could be your own bank, and you could collect all the interest. Wouldn’t it be nice if we could teach this concept to our children?

A Modern-Day Plague
We live in a throwaway society. We purchase anything and everything our hearts desire. To do so, we use credit cards, finance through banks or use other means. Then, when an item breaks, it goes in the garbage and off to the landfill. We don’t bother to fix it.

I read an interesting book called Affluenza, by John De Graaf, David Wann and Thomas H. Naylor. It is about the disease that is consuming our nation right now. We want to live like the affluent, so we do whatever it takes, which includes using credit cards and going into debt for things that make us feel good for the moment. Our children grow up with shopping mall fever. They must have the latest, greatest electronic devices, computers and cell phones (much better than their parents).

As a result of going into so much consumer debt, we now have a rash of bankruptcies, the stress of excess and the addictive virus, hoarding fever. We actually buy things to make ourselves feel better. When it all piles up around us, we build garages or rent storage units to hold and organize our stuff. All of this causes side effects like working too hard, lacking meaning in our lives, losing emotional connections with loved ones, having unrealistic expectations and experiencing dissatisfaction.

Affluenza could very well be a modern-day plague sweeping across our nation. An epidemic of great proportions has hit all our families. We are getting deeper and deeper into debt. We are in the rat race. We must ask ourselves: Why are we working so hard and not getting ahead? What are we doing it for?  Are we teaching these bad habits to our children?

Calculate Your Living expenses
Create a chart to determine exactly what amount of money you need to sustain your lifestyle. Evaluate this chart to see how you spend on interest-bearing payments. Develop a plan to cut the spending. Every dollar you cut back is a dollar in your savings account.

Think about the possibility of scaling down and not needing so much to sustain life. Evaluate entertainment, vacations, impulse purchases and other wasteful spending habits. Make a commitment to cut up the credit cards and pay cash for everything. If you need a card to make purchases, use a debit card. If you don’t have the money in the bank to purchase what you want, don’t buy it.

Getting out of debt takes a firm commitment and discipline from everyone in the family. This chart will help you evaluate exactly what is needed and what can be cut out of your life to simplify living and stop the accumulation of debt. It doesn’t matter how much money you make, it is how much you save that counts.

Your chart should contain the following categories:

  • House Payment
  • All Utilities
  • Telephone
  • Food
  • Clothing
  • Auto Payments
  • Gasoline
  • Insurance on Autos
  • Health Insurance
  • Medical and Dental
  • Education
  • Fixed Debts
  • Credit Cards
  • Entertainment
  • Other
  • Other
  • Other
  • Total Per Month
  • Total for Three Months
  • Total for Six Months

It is a good idea to have a three-to-six month supply of cash on hand (not in the bank) to pay bills just in case the banks have problems and you cannot get your money out. It is good to have small bills and coins for smaller purchases. The stores might not be able to make change for a $100 bill. It takes time to save enough money for emergency bill-paying.

If you are already in debt or must have some debt, the following chart is the recommended amount. Do not exceed more than 36 percent of your monthly income for debt expenses or you will be in financial trouble.

  • Car Payments: 6 percent of monthly income
  • Housing: 25 percent of monthly income
  • Credit Cards of any kind: 5 percent of monthly income

If you can get out from under the pressure of debt, you will give yourself a 36 percent raise and have that extra money to put into saving for your future.

Debt Elimination Program
I have been researching a program to get out of debt in about one-fourth the amount of time it would traditionally take. This includes the home mortgage and all other debts. It takes discipline and focus. This can also be called behavior modification. A person must be willing to take a certain amount of money each month and apply it to debt and keep applying that exact amount each month until all the debt is eliminated, even if it takes seven to 10 years. You can purchase the software on my website.

The software has you list all your monthly living expenses and every debt that you must pay every month to meet your monthly bills. It will calculate the amounts of the debts and the interest rates. It recommends that you pay off the smallest and highest-interest debt first, then the next smallest up to the largest. Any extra income such as tax returns, bonuses, inheritances, sale of properties, etc., will be applied to the debt as well. This is called the snowball effect. The software has a rapid payoff calculator and spreadsheet.

Here is an example of the snowball effect on a person’s debt:

Debt Amt. Owed Interest Rate Monthly Payment
Dental Bill $500 8.5 percent interest $100 per month
Credit card No. 1 $2,500 18.5 percent interest $500 per month
Credit card No. 2 $5,000 21 percent interest $100 per month
Car $15,000 6.8 percent interest $595 per month
Home Mortgage $75,000 5.8 percent interest $850 per month


Say the smallest debt is a dental bill of $500, with a monthly payment of $100. The next lowest is a credit card with $2,500 at $18.5 percent interest. The next is another credit card with a $5,000 balance at 21 percent interest. The minimum payment on the second credit card is $100 per month. This will get you every time if you make only minimum payments. If you paid the $100 per month with accruing interest, it would take more than 20 years to pay it off. Ouch! So it must be accelerated.

When the dental bill is paid off, add the $100 you were paying for that bill to the amount you pay monthly for the first credit card. After the first credit card is paid off, add amount you were paying on the first credit card to the amount you are paying on the second credit card until it is paid off. When second credit card is paid off, add the amount you were paying on the second credit card to the car payment until the car is paid off. Then, take the amount you were paying on the car payment and apply it to principle on the mortgage payment. You will accelerate your mortgage payments by paying large principle payments. That reduces the payments again by about a fourth of the time it would have taken if minimum payments were made.

The software calculates the amounts owed, the interest rates, the amounts paid, the reduction in debt and the amount you will save on interest by using the rapid payoff calculator and spreadsheet. The calculations can be adjusted if something unforeseen happens and you incur extra debt. It keeps you disciplined and focused on debt elimination. Ultimately, when all your debt is paid off, it helps you save for your future by paying yourself the interest and principle you would have paid to the bank. It is amazing how things happen to help with the goal of debt elimination and saving for the future.

I believe there is a universal force from God that helps us accomplish our goals. It is like the law of attraction that is talked about in the movie “The Secret.” Amazing things start to happen when we are clear about what we want. “Ask, and ye shall receive,” (John 16:24).

About 10 years ago, my husband and I were trying to get out of debt, and I prayed seriously about it. We were flying home from a trip and I was pondering about what to do, when it came to me very clearly. I believe I was shown a vision of how to get $70,000 dollars to pay off the balance owed on our home. I wrote it down in a notebook step by step as I was shown. I went to work doing the things I was shown. It took about six months to accomplish, and I had our home paid off.

Our home is paid for and we are no longer slaves to our mortgage company. It feels so good to be debt-free on our home and know that we won’t be kicked out if times get tough and we get into financial trouble. We now take our mortgage payment and save it. I was so amazed at how it worked and how everything fell into place for me.

I still use the following process:

  • I state my goal of what it is I want to accomplish.
  • I visualize that I already have it.
  • I thank God every day that I already have it.
  • I act as if it has already happened.
  • I do not try to figure out how it will happen.
  • I do not doubt that it will happen.
  • I just know that it will, and it does.

Emergency Food Storage and Survival HandbookPeggy Layton is the author of seven books on the subject of Emergency Food Storage and Survival.

Debt Elimination Software, Books And Emergency Supplies
If you are interested in the Debt Elimination Software talked about in this article, any of the books, emergency supplies, wheat grinders, ION water purification drops or emergency food storage, click here.

Food-Storage Meals
Are you interested in a great source for pre-made meals that can be stored for 15 years and taste great? I have been testing out emergency Food Storage Meals, packaged in Mylar™ pouches. These meals serve four people and are ready to just add water and cook. I find them delicious, convenient and easy. Click here.

Peggy Layton

a home economist and licensed nutritionist, holds a B.S. in Home Economics Education with a minor in Food Science and Nutrition from Brigham Young University. Peggy lives in Manti, Utah with her husband Scott. Together they have raised seven children. Peggy owns and operates two businesses: One called "The Therapy Center", where she is a licensed massage therapist and hypnotherapist, and the other an online cookbook and preparedness products business. She is nationally known for publishing a series of seven books on the subject of food storage and also lectures and teaches seminars about preparedness and using food storage products. Peggy practices what she preaches, has no debt, grows a huge garden, lives off the land, raises chickens, bottles and dehydrates food and has time left over to operate her businesses. To check out Peggy's cookbooks and self sufficiency products go to her website To get a free sample of three different storable meals that have a 15-year shelf life go here.

Facebook Conversations

Join the Discussion:
View Comments to “How To Get Out Of Debt, Stay Out Of Debt And Save For Your Future”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at

  • Wayne937

    [Comment unrelated to article removed]

  • Wayne937

    [Comment unrelated to article removed]

  • Donald R. Megerle

    [comment unrelated to article removed]

  • oldbill

    We used this very system starting in 1984. By 1990, we were debt free and still are to this day. Applying this system to saving, from 1990 to 1995, we saved enough to retire at age 48, on investment income only!

  • Bert Cundle

    Well… That is too late for me!
    When I was 21, My Budget was 25% Food & Clothing / 25% Transportation / 25% Houseing / “25% SAVINGS!
    I was making $125.00/Week Dishwashing @ a Hotel. Rent: $100.00/Month (1 bedroom Apt Door to pool.) Gas was $.25/Gal.
    Wasn’t Required to Purchese: INSURANCE,for Driving, Home,& Health.
    Well Now @ neer 70 Y’rs Old… S.S. Keeps me alive!
    But: Gas @ $4.25/Gal. Almost Keeps me home all the time! Insurance Payments, cut into my Food & Clothing, money. With No possibility for SAVINGS! { That is what I get for Fighting the CRIMINAL SYSTEM!}
    Greatful for My UNION Pension, For Car Repairs.

  • skyskiers

    [comment unrelated to article removed]

    • Bert Cundle

      [Comment removed]

      • Richard Pawley

        [comment removed]

  • nax777

    [Comment unrelated to story removed]

  • Fred

    “just look at us.Everything is backwards”.

    -Debt is Good Cash is Bad
    -Doctors destroy health
    -Universities destroy education
    -Governments Destroy Freedom
    - Lawyers Destroy Justice
    -Major medias destroy information
    -And religions destroying spirituality

    • Bert Cundle

      People that wanted change… weren’t loyal citizens!

      • bob wire

        Now that’s bold statement and makes little sense.

        Change is a part of living ~ to not changing is dying.

        It’s every American’s duty to speak their mind and vote and be a part of the American experience, to not do so is not the American way.

        But I do wish some were more informed and less programed but that all a part of the political process, from early Rome to today, disinformation is a standard approach to control the minds of people and get their consent for dominion.

    • Richard Pawley

      And isn’t it interesting that in the Bible it says that in the last days good will be called evil and evil will be called good. Of course the last days could last a thousand years after WWIII is finally over, but we have messed up so royally this time that only help and inspiration from God will be able to slow down the destruction of our nation. Those who believe in a personal God need to pray every day that He works His will on all our nation. He has already revealed that we are going to have a tripling of prices (due I believe to the monies squandered by congress for past generation. I find it amazing that we didn’t even owe One Trillion when President Reagan took office. In any event, pray, and count on prices tripling on things you really need, like food and fuel and clothes. I remain convinced this is the decade and some of my sources believe it will be before the next president takes office. Only God knows for sure but chapter four of “The Last Days of the Late Great United States, and teh Great Famine that followed” is entitled, “Gasoline or Milk, $10 a gallon.” Believer’s need to pray!

      • Marcy

        Hi Bob, Yes you are right – all in society is making evil as good, and good as evil. Not only that but before the Lord comes to get us, it will be like in the days of Noah – men with men and women with women – this is running rapant in our country and the world. People will leave their natural affection. Also, another sign of the rapture of believers is that before He comes, there will be chaos in the world – all these upheavals in the mid-east – a lot of of chaos there for sure. AND, all these tornadoes, fires, hurricanes in our own country – people left homeless – all their material things crushed. If that doesn’t get someone’s attention then they are in trouble. We serve an awesome God and living in HIS box is the ony way to live!!! Yep, a day’s wages for a loaf of bread – it’s coming for sure. The devalued dollar, the trillions in debt, the politicians saying everything is going to be okay – what planet are they living on. I’m just getting started. Anyway – you are right on!

  • Wayne937

    [Comment unrelated to article removed]

  • Cawmun Cents

    I just quit spending.If I dont need it,it dont get bought.I think that is what gubment should live by,but what do I know?Apparently very little….

    • independant thinker

      One thing she left out unless I missed it. If there are salvage stores in your area shop them for necessities and save money then use that which you saved to help reduce your debt. Resale stores are another good place to save money especially on kids clothes. Many times you will find new items with the original tags still on them there.

      • bob wire

        of course, You can buy from Walmart ~ Or buy at Good Will or Salvation army , buy best items at a must less cost and support your community’s effort to address the needs of the less fortunate.

        We vote with our dollars ! Every dollar is a vote.

        • independant thinker

          It has been my experience you save nothing shopping at wally world for overall they are not any cheaper than other mass market big box stores and chain grocery stores.

  • Dan az

    The guvmnt sense nixon has based our economy on credit and has maxed out their credit cards every budget sense then.They just print more funny money to bail them selves out and keep on spending.Think this might be the problem? If we could stop spending why cant they stop?Is it an addiction or just robbery?If we did what they do we would be in jail right along side of bernny.The feds are now releasing some figures that even blew Ron Paul away,he never even thought that it was as bad as it is.They only gave up some 2900 pages and thats only the tip of the iceberg.Some 100 trillion was created and laundered and we thought is was only 13 trillion.We not only need to get rid of the counterfeiters but make them pay back every thing they stole from us.I don’t have debt and haven’t had any for about 20 yrs now,and it is the only way that we will survive whats coming.I just wished that the guvmnt would go back to the gold standard and base this toilet paper on something rather than debt.

  • FreedomFighter

    Vote the Progressive/Liberal Marxist evil out of goverment office, both local, state, and national positions.

    Make a stand, vote these evil greedy corrupt and Marxist destroyers out of office at all levels. Replace them with conservative, constitutional minded individuals.

    Out of debt since 2000.

    Laus Deo
    Semper Fi

    • bob wire

      So you believe that would correct matters? hmm? ~ That 21 of 30 years we’ve enjoyed conservative leadership and largely responsible for todays affair you say that? 2/3rd of the pass 31 years has been dominated by the GOP.

  • bob wire

    I’m a cash and carry kind of guy. ~ I drive 13 year old truck and live in a 50 year old house. Drink old whiskey and enjoy younger women.

    If I want something ~ I works, do without and save for it. I use time to my advantage. When I no longer have the time, my “needs” smaller still.

    At 63 life get easier, I can remember when life was not so easy, I had plans and dreams and little time. I had “people” to please as well as myself. Those days are now gone. ~ Thank GOD!

    You really need one credit card ~ but you must be very careful and use it only as a last resort. ( I don’t have one myself)

    Understand, ~ to make 30 dollars clear I “must spend” $100.00

    So to buy anything that cost $100.00 I must commit over $300.00 and hope for a profit. This reality should slow your “wants” down some.

    If you are an hourly person, figure your time and tax amount that it takes to fulfill your “wants” and then ask yourself , “Is it worth it?”

    And as far as saving? ~ Pay yourself first! even if it’s tiny ! 3% , 5 dollars on a hundred ~ whatever! It takes time to build but it will happen and this gives you a sense of accomplishment. That feeling is very important because success breeds success. Like failure breeds failure.

  • Old Henry


    I have never understood why anyone would need more than one credit card.

    I have never had a debit card. As I understand them it does not matter if you have the money when you use the card. The bank will “cover” for you – at a high price – much like overdrawing a checking account.

    I use my credit card like a checkbook. I list all my purchases on a spread sheet so I know at any given time how much I have charged. I also know how much I have to spend each month. So, I keep the two in balance. Usually I spend less than I have coming in so I run a surplus. When things come up unexpectedly I have some to fall back on.

    I have never concerned myself with “keeping up with the Joneses” and it has paid off.

    If we have a warm dry place to live with hot / cold running water and indoor plumbing everything else is just for show – and who are we trying to impress? God could care less about what we drive or the price tag on our clothes. He has truely blessed me and my family with His guideance and wisdom. Sometimes I feel as if I need to pinch myself to be sure it is all real.

    Our personal excesses are now playing out in our government excesses and we will indeed be paying the fiddler very soon.

    I very much enjoy your articles, advice and wisdom as I know I do not have all the answers.

  • Wapitiman

    We are a debtor nation and a nation of debtors.
    It is my understanding that the average credit card has over $8000 charged to it. This is insane! The advice given in this article is solid gold! (literally and figuratively)
    There are many was to cut down on expenses and save for the future.
    For instance, I have the lowest credit card limit (on my one credit card) I could get, and pay it off every month. In over five years I have not paid a penny in interest. The credit card company makes 3-4 percent on my purchases, not 20-odd percent!…and I get one percent back in cash at the end of the year. Not too shabby.
    My wife’s 21-year-old car came to the end of the trail and we purchased her a new modest car (which she picked out). Admittedly, buying a new car was an extravagance. We paid for the car in cash. It’s amazing what kind of deals one can make when one says “It will be a cash purchase.”
    What is the point of all this?
    It is: that by living below one’s means, and saving a ton of money (not paid out on interest) lets one sleep like a baby at night. Our mailman brings a lot of junk mail (which goes into the fireplace to heat the house…not into a landfill. He does not bring a ton of bills.
    Re-read the article above. It is chock full of advice your mother and father should have taught you.
    Blessings on your day.

  • Peggy Layton

    I really appreciate all your wonderful comments. I am very happy to read the comments such as Old Henry, Wapitiman, Granny Mae, and many others who have shared their wisdom and personal life experiences. Sometimes I am almost afraid to read the comments so I wait for several days so I can handle it. Thanks again for the positive feedback.


Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.