Staying financially fit

Debt is the biggest financial hurdle you may encounter as you consider missions. But careful planning can help you avoid new debt and pay off existing debt. It begins with creating a budget.

Chart your monthly income and expenses. Use several months’ worth of numbers to get the most accurate picture. Don’t include income that you can’t be sure you’ll receive. Personal-finance programs can be a big help.
Evaluate your spending. You should aim to spend no more than 90% of your income. If your expenses are greater than that, cut the fat! Start by eliminating small but needless costs like frequent coffee runs and paying for household chores you could do yourself. Eating out often can also run up the bills. A budget calculator can help you find other areas where you may be overspending.
Track your spending. It may take a couple of times re-evaluating your expenses to set a realistic budget. If the numbers still don’t add up, you may need to take some drastic measures like switching to a more practical vehicle.

Next, put together a debt reduction plan. At SEND, we use a worksheet to help new missionaries with this process. You can also read this personal story of how one SEND missionary paid down over $33,000 of debt in four years. If you are a college student, look for free money before getting a student loan:

Academic scholarships
Foundation grants
Home church or employee scholarships
Civic group scholarships (scouts, Rotary, etc.)
State, county and local government scholarships/grants

If your income is still short of your expenses, here are some tips for carefully planning your loans. Remember, loans are easy to get and hard to pay off.

Set realistic debt limits by calculating all you owe and what will you earn after graduation. Don’t borrow more than you can pay back just because you are eligible.
Make paying back the loans a priority.
Consider taking a year off of school to work and save.

Remember, you are responsible to pay back everything you owe. Careful planning could save you a lot of time and money. For more help on reducing debt, check out these great resources: