Sequential Investing Hierarchy – Struggling
Over the next several weeks, we are going to go through the basic steps of what building a solid foundation looks like. The Kingdom Advisors organization likes to refer to this as the “sequential investing hierarchy.” These terms refer not only to what a household’s situation looks like financially, but it also pertains to how someone may feel about his or her financial situation. The first step is “struggling.”
The consistent feeling is that of being overwhelmed and living paycheck-to-paycheck. Households in this step often feel that they are one unfortunate event from being in major trouble. The burden of credit card and consumer debt is often prevalent in this stage. So, what should be done? First and foremost, establishing a spending plan is paramount. It’s key to determine where funds are going and areas of potential efficiency. Next, it’s time to knock out the debt. At Lockshield Partners, we often recommend the snowball method or the avalanche method. (For more details, check out this former blog post: 4 Steps to Eliminating Debt)
The Biblical principle to remember is to be wise with debt. Remember, it’s very easy to get into debt, and very hard to get out of. Proverbs 22:7 tells us, “The borrower is slave to the lender.” Christian Credit Counselors (christiancreditcounselors.org) is a great resource to use if you feel that you’re in this category. They can negotiate with lenders to establish more favorable payoff terms, while still allowing clients to honor their debts in full. In fact, their clients eliminate their debt 80% faster!