Ideas To Stay Debt Free Today

Q: What a day! We received our income tax cheque in the mail today and sold my husband's "neglected" motorcycle, finally. This really paid down our debt by a big chunk. We will be debt/worry-free by this time next year! Have any of you been though this and managed to keep the debt away? We've learned so much by this experience and I'm sure we'll never get into it again. Are there any ways you all have learned to stay debt-free?

A: _We've never worried about "keeping up" with anyone else-- we do what's good for us. We think very carefully about purchases & are very disinclined to buy something simply because it's the newest thing out there. BTW, we paid off our house this spring & all our cars are paid for, we have no debts. It's very liberating to be free of car payments (we prefer to buy new cars & pay cash after years of driving old cars; our cars now are 4, 6, & 12 years old & doing nicely with good maintenance.) We have no education debt--our children are college age; we pay part & they pay part so none of us are in that kind of debt. We also do as much as we can to be self-sufficient. It has paid off _Ask yourself before you buy anything: What is the REAL cost of it. Charging anything, or borrowing money, automatically increases the cost of the item that you buy. People have FORGOTTEN that, or else never learned it in the first place. Some folks pay 3 times what they think they're spending. For instance, a friend of mine uses her credit card everyday to buy lunch or anything she wants. She thinks she's charging 7 or 8 dollars. But since she's deeply in debt, by the time she pays off all of it, that greasy sandwich with the flabby bun, will cost her $25. When she finally realizes what she's REALLY spending, I'll bet she'll find a way to pay cash. Maybe she'll even switch to lunch brought from home. Think about what you are buying, what you really want to pay for it, and what you WILL be paying for it, if you dare charge it. Also, once you feel what it's like to really have money, you will never willingly go back into debt again. _that's a real accomplishment. I have about 18 months to go for myself. I am a little over half way through a four year debt recovery plan. I couldn't have done it without the help of the Consumer Credit Counseling Service (CCCS). Non-profit, legal, not one of those fraudulent "get rid of your debt" businesses for suckers. No affiliation, yada yada, you know the drill. I had over $20-25k in debt. Amazing for me to think of it now. Now I have had "no new debt" for about 26 months. I say that to myself and others, "no new debt." I can't say debt free yet, but I can say that, it's very reinforcing. I pay one big bill to CCCS, and they pay all of my creditors. Also, I have not declared bankruptcy, a last resort legal loophole designed with good intentions, but which too many people use as the easy way out (read before you flame: too many people does not equal *all* people. Some people do use it as a total last resort). All that being said, I chose what I feel is a responsible recourse: CCCS renegotiated my APR for my cards (some now as low as 0 to 9% APR), closed my accounts, and set up a repayment plan. All I do is send them a check and everything else is taken care of for a fee of only $20.00/mo. But for that $20.00 I get the lower APR, I no longer get over the limit fees, or late fees. That $20 is probably saving me hundreds. To stay in the program, I agree to It's hard for people, though. Many of you may have had frugal folks to set and example for you, but I didn't. I think I grew up in an average consumer family. Spend, spend, spend, and save a little. My older brother, mom, and dad all carried lots of credit cards. I remember when I started rotating card balances from one card to another I thought that I was being savvy. Good lord! I have a few tricks that work for me: I stay debt free by using Amex and one of those ATM check cards. Amex is a "charge" card, not a credit account. You have to pay it off at the end of every month. But my experience has been (others are different, I know) that Amex is great to have for those times you need a card and an ATM won't do. Like car rental, reservations, etc. Plus, I've had them go to bat for me. They seem to me to be a much stronger advocate for the customer than the business, exactly opposite of what I found with credit cards. Once Amex cleared a charge of $5,000 from my account when I needed to cancel an trip to Buenos Ares that a travel agent tried to block me from canceling, even though I followed their guidelines. They actually went into binding arbitration with the travel company and won, clearing the charge for. Let's see, a $50 annual fee divided by $5000, so I could be an Amex customer for the next 100 years and it's still paid for itself. I keep track of what money I have in specific accounts, designed for specific purposes. One is a checking account where part of my direct deposited pay partially goes into. Another is a savings "slush fund" account. This has *no* ATM hooked up to it. That way, I actually have to go to the bank during business hours to get access to that fund. It helps put some checks and balances in place in my spending. I highly recommend that. Plus I've used Christmas Club type things for other purposes, like a vacation, etc. It's a cool reminder to put a few bucks into an account that you know will give you a check back to go towards a vacation. I am a regular participator on this NG, which has helped a lot. I drive a somewhat beater car, which the exterior doesn?t look as new anymore, but passable, but the engine is well maintained. I have even started to do some of the maintenance on my own car again. I live close to my work. A two mile commute can be handled by bike when my car does (infrequently) have trouble. I also live in a neighborhood, which is very blue collar, safe, easygoing, but definitely not upscale or fashionable. However, I do know all my neighbors by first name, I help watch their houses when they are away, and they watch mine for me as well. We are going to have another annual block wide garage sale, which I will be the point person to organize. But since I don?t have a long commute, that?s pretty easy to find time to do. I have found more frugal friends, but I don?t preach to the non-frugal ones. And the frugal friends and I do great cheap stuff together. Like hiking on Angel Island with a picnic lunch, road trips together instead of flying, walks over the Golden Gate Bridge, walks on different area beaches (need more exercise!), playing games at each other?s houses, having dinners over as well, instead of going out to eat all of the time. And you know what? I think the quality of that experience is better. I had a better time taking a road trip for a vacation for a few hundred dollars than when I used to fly everywhere, stay in the same sterile, photocopied hotel room, and spend thousands, only to rush back tired from vacation to be tired to get back to work. ?Cheaper? doesn?t mean worse. I am frugal with my money. I am frugal with my time. I am frugal with what I use my energy for. To me, ?frugal? can mean having a better quality of life. Can you tell I?ve become somewhat passionate about this _I would add that whatever you do...don't trade in your home equity for debt repayment. We paid off 8,000 dollars of an 11,000 balance some years ago. Then made the mistake of combining the last 3000 with our remaining car payments and a new roof (very much needed) into a home equity loan. When we went to sell our house 2 years later....this move severely limited our options as to where we were able to move. In the future, I would only get a home equity loan for actual home improvements in the house I will stay in for a long time. Or for improvement projects that have some value in increasing either the saleability or the actual price of the home I want to sell. I want to enjoy any improvements I make. Most of our improvements are made by us. _I think you would probably enjoy listening to the Dave Ramsey radio show. You can listen to show archives at daveramsey.com. Dave was a millionaire on paper in the 80's and went bankrupt. He has vowed off credit since and only pays cash. He only uses a debit card, he is 100% anti-credit card (something I don't fully agree with). His friday shows are devoted to callers who have become debt-free. Usually his calls are sobering, there are a lot of people in nice homes simply swimming in debt. Dave has a decent book called Financial Peace that shows you how to live a life without debt. A book I like better is Mary Hunt's Debt-Proof Living. The book is so easy to understand and she doesn't ramble as much as Dave. _If you received a check in the mail from the IRS...then you need to look more closely as to what you are having withheld. Basically, YOU GAVE the government YOUR MONEY for the entire year. You could have used that money all year long for your families comfort. This is YOUR MONEY and it makes no sense to send them the money and then they send it back to you at the end of the tax year, without any benefit to you and your family. .

Ideas To Stay Debt Free Today

Discuss It!

Most Popular Articles

Marketplace

Related Articles

Related Categories

Recently Added

You Recently Visited

Other Great Sites