Although finances shouldn’t be the highest priority in our lives, I will say money plays a major role and we need to see it for what it is: a tool. As my good friend Zig Ziglar says, “Money isn’t everything, but it ranks right up there with oxygen!”

Money is a tool that, depending on how we use it, can bring much joy to our lives or it can bring destruction. We need to be aware of all the possibilities it offers as well as the pitfalls. Some of the most amazing things have been done because people had the financial resources to fund them—businesses have been built, schools started and philanthropic charities founded that have accomplished much good. On the other hand, friendships have been ruined, illicit gains profited, and lives destroyed—all over money.

So today, I want to focus on applying some simple financial principles, but I also want to teach the underlying philosophies that govern what good people can do and what tremendous accomplishments can be made when we see money for what it is: a tool to improve our lives and the lives of others.

John Wesley said, “Earn all you can, save all you can and give all you can.” A person who sees the powerful force for good that money can be will more likely keep their own life in balance by pursuing the disciplines of earning, saving and giving, which, together, create the perfect tension and balance.

But we must also remember that money has a seductive side and tells you it will solve all of your problems, but it won’t. It is great to have money—lots of it—as long as your life is in balance and you keep the proper perspective. It is important that we own our money and not the other way around.

The first way to make sure money doesn’t own us is to deal with the issue of debt.

Americans, along with most of the world, have more debt than ever. We would do well to remember the old proverb, “The borrower is the servant to the lender.”

When we are in debt, we owe someone, and because of this, they have a certain amount of control over us. We are, in essence, their servant. This is not the way of financial freedom.

Interestingly enough, when it comes to debt, I have found that many otherwise intelligent people just don’t get it. So, for a little help, here are five things you must understand to achieve financial freedom:

1. Develop the right mindset.

When it comes to debt, the only mindset is one of ruthless opposition. We need to see debt as the very enemy of our financial lives. If we begin to say, “Well, a little debt here and maybe a little debt there,” we will soon see a lot of debt everywhere. In the same way money can compound positively when we save and invest, debt can also multiply and push you deeper into debt as each month passes. The right mindset is that we need to get out of debt and stay out of debt. Is this your mindset? Many times, we are a product of the environment we were raised in or we associate with currently. Have you thought lately about the mindset you have toward debt?

2. Gain more understanding.

Some people have no idea how much debt they actually have. Some people do not know whether they have a positive or negative net worth. You can’t plan your future if you do not know where you currently are. Think of it this way. Let’s say you wanted to visit a friend and needed directions to get to his home. When you call for directions, he would ask you where you are coming from. Typically, we would tell him our town or address, and he would then give us directions how to get there from where we are. Imagine, however, if we told him we didn’t know where we were. He couldn’t give us directions because he wouldn’t know whether to tell us to go north or south, east or west.

The same is true with knowing where we are financially. If you have a goal to save $1 million, your plan is going to be different if you already have $750,000 saved than if you have $100,000 in consumer debt. Figure out where you are financially—get an understanding. In this instance, the old “Knowledge is power” adage is true. There is power in knowing where you stand financially, because only then can you map your financial future!

3. Seek help.

When you are sick, you go to the doctor. When you want to improve in a sport, you get a coach. When you are in debt, you need to seek some help. Depending upon the amount of debt you have, you will have to look for varying degrees of help. If you have $2,000 to $5,000 in credit card debt, you might just need a friend to keep you accountable on monthly spending. If, on the other hand, you are over your head in debt, for instance $50,000 in credit card debt, you may need to bring in the help of a financial advisor who can help you with your creditors. Don’t let your pride get in the way. Everyone needs help at times, and wise people get help when they need it. If you have debt and need help managing it, get help. Your future depends on it.

4. Get control.

Think about the concept of debt for a minute, especially the specific action of going into debt in order to purchase something you want but don’t have the funds on hand to pay. Now, you might not ever articulate it this way, but what you are really saying is, “I don’t have the money for this, but I want it so much that I cannot go any longer without it. And, not only that, but I am willing to pay 10 to 20 percent more for it than it costs.” (Ten to 20 percent is a typical yearly percentage rate on a credit card.)

What this boils down to is an issue of control. Can you control your urges? Or, more appropriately, will you control your urges? Will you take control of your life? Will you take responsibility for your actions and decide for yourself that you will no longer buy on credit and dig yourself deeper into debt, jeopardizing your financial future.

5. Create a Plan.

To get out of debt, you need a plan. It needs to be simple, effective, workable and tailored to your individual life. There are some fundamentals you can follow, but everyone has different incomes, levels of debt and at different stages in life. A 50-year-old couple who has an income of $125,000 with $50,000 in debt is going to have a different plan than a single male, age 25, who has an income of $30,000 a year and a total of $10,000 in debt.

The key is to have a plan. Once you have a plan that will work for you, then work the plan with all of the discipline you can muster. Your plan should include detailed strategies for spending, income, saving, investing, etc. I remember the day so clearly that I told my mentor Mr. Shoaff, “If I had more money, I would have a better plan.” To which he replied, “No, I would suggest that if you had a better plan, you would have more money. Remember, it’s not the amount that counts, it’s the plan.” As the old adage goes, “If you fail to plan, you plan to fail.” So true.

Here are a few additional basics for your get-out-of-debt plan:

• Write down everything you spend. Keep a ledger or a journal or a notepad or whatever works for you, but write down every transaction you make. This is so important. It creates awareness, forcing you to take a second look at each decision, and helps bring accountability to your spending.
• On all future credit card charges, pay off the full charges for the previous month’s expenditures—no exceptions. This will keep you from paying “new” interest. If you are not able to do this right away, set it as a goal to be able to do as soon as possible.
• Determine how much additional money you can apply to your debt each month and apply it all to your highest-interest debts.

Your financial future can be amazing; it can be anything you want it to be. Part of the heritage you can leave behind is being financially independent, but it will involve some deep soul-searching and some tough decisions to figure out exactly what you want out of life. One of the first issues you must deal with, though, is debt. If you don’t have debt, that is fantastic. If you do, life isn’t over for you; you can still achieve whatever you desire, but only if you make the commitment to shift your priorities.

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