I moved back in with my parents six months ago to get rid of debt I accumulated in NYC and save for school. I’ve been doing okay, but not as well as I would have liked, so…
In order to let my bills go down and stay down, I just took every single one of my credit cards out of my wallet and handed them over to my mother - I know she’ll put them somewhere I can’t find them. The only thing I have left is my American Express, which MUST be paid off every month, so I’m always very careful what I put on it - I just consider that cash when I use it.
Now, I am credit card-less. No Mastercard, no Visa, no Express, no Optima, no Victoria’s Secret. None. Zip. This is going to be the hardest thing I’ve ever done, especially since I’ve practically lived on them for the past six years. But my goal is to start my marriage in a year and a half, and my new career as a teacher in that same amount of time, debt-free (aside from the student loans I’ll have to take out). I’m going to have to cut out a lot of things - no more random spending on books or CDs or DVDs. I’m working out a budget and I’m going to stick to it. If I’m careful, I can pay these bills off in six-eight months.
I sort of feel naked knowing that my wallet is so much lighter and I don’t have those credit cards if I see this cute little top that I just HAVE to have - and I can’t go put my money on those 3rd season Farscape DVDs…I can buy one at a time as I get my paychecks.
Part of this came about because I really want my own place again and I’ve got to reassert my independence. But I’m also tired of being financially irresponsible and I don’t want to live the rest of my life drowning in debt. I’m going to learn to manage my money now.
Credit cards seem habit forming. I am guilty of the same sort of buying that you describe but have really slowed down in the last year to get them to zero. I have tried to find a substitute for these behaviors that are fun and cheap. Good Luck
Heehee - if I made a step, it’d fall apart in about two seconds. I was the girl who was asked to please take band instead of shop:).
And I’m a little nervous about this right now. I haven’t been without credit cards in about ten years. I know I can do it - I need to start taking care of my bank account better, too - but it just freaks me out. However, this will be good for me.
Toddly, congrats on paying yours down! Any other tips for me?
Do this: Make a spreadsheet in Excel* and on the left (beginning with row 2) put dates separated by one month, from now until, let’s say, 5 years from now. Then across the top (beginning with column B) write MasterCard and Visa and AmEx and so forth, one named column per credit card. In row #2 running across type in what you owe on each card.
Now select the whole region from column 1 to the rightmost credit card column, from row 1 to the bottom row 5 years from now. Click the “Chart Wizard” (or equivalent) and make a chart, placing it on the next sheed in your workbook, and formatting it as an area chart. Save.
Then every month when your statements come in, enter your ever-decreasing debt in the appropriate cells. Then flip to the graph and watch your debt go down.
(I’ve been there, I’ve done that and found it kind of inspiring).
*(or Lotus 123 or Quattro Pro or Appleworks or MS Works or OpenOffice or whatever you use for spreadsheets)
You’re moving in the right direction, avabeth. I hit a personal high of $56K in unsecured credit debt in October of 1996, and decided it had to go away. Step one was to stop using them (as with you, I do use my Amex, and I keep a no annual fee Visa active, just in case).
I started going to the bank each week to get my cash for the week, and paid for everything that didn’t involve sending a check in the mail with cash. I paid off the last of it 2½ years ago (and started threads here when I crossed the $25,000 line, the $20,000 line, $15,000, etc.).
I haven’t used a credit card since 1996, and am thoroughly trained. I can’t remember when I last thought about using a credit card.
Thanks, Slainte! Actually, I know I took an incredibly big step for myself tonight…handing over my cards was really hard. But in the long run, it’ll be better. I look at the amount I pay on my debt every month and if I didn’t have that debt, I could easily afford the CDs, books, DVDs, electronic equipment, etc that I want. I could afford a nicer car, I could afford to live in a nice apartment, etc (that won’t be an issue as I’m moving in with boyfriend in a few months anyway) - and all of that without going into debt. So I am going to get out of this and NEVER do this to myself again.
And I will definitely check his book out. I was going to borrow my best friend’s Suze Orman book since I can’t find it at the library, but I’ll get his instead.
Thanks, Slainte! I may take you up on that. I’ve already started working out my budget and I feel so good about doing this.
Yeah, the boyfriend’s pretty pleased:). I’ve actually learned a lot from him - he’s very responsible with his money and has a rule that if he can’t pay it off in two months, he doesn’t need it and he’ll wait until he can pay it off in two months. I’m going to try and follow that same rule.
My bag feels so much lighter this morning without those cards.
Good for you Credit cards scare the bejeezus out of me, have never ever had one. Don’t even have a debit card. If I were you, I would let your mom keep your cards for good, after a while you aren’t going to miss them. I am going to get a debit card (a Visa that takes the cash from your bank account) when I get a job, so I can make online purchases, but I will never ever get a credit card.
I read Larry Burkett’s book on living debt free and one of the hints is to cut up all your credit cards. I did this and DID become debt free (for a year or so) then just got new cards. My point is IT CAN be done. You just have to try hard.
Good luck Ava. I’ve never owned a credit card in my life (31) and when I read your post I am glad. If I don’t have the cash, guess what… I don’t buy it.
What did we do before credit cards? When did we become so ‘got to have it now’ about things?
When I’m trying to save a little better, I make a point of not spending anything Monday to Friday, I’m busy with work anyway, and just come home, eat, read, talk on phone etc and if I still want something I wait for the weekend. Sometimes I forget by then, or it’s not as important… or I go out and buy it.
Plus I always pay bills first, then myself. Many say this isn’t right that you have to pay yourself first, but it’s the bills unpaid that cause the stress. Anyway it works for me. Also I have a limit on what I spend compared to what is in my account. What I mean is I always keep $100 in my account and never run dry. Even if it means not buying something. The bills are already paid so it’s just my greediness I have to battle with.
My money situation is not always perfect but the days of stressing over bills and having no money are extremely few and far between.
And if others give me a hard time about not buying something, or buying another round of drinks that exceeds my limit I simply tell them that I am saving for something that is really important to me and it means alot to me to save for it and they tend to admire my discipline and support me rather than give me a hard time.
Good luck again anyway, stay strong and true to your quest. Think about how good you will feel when you achieve debt free. It feels better than 10 CD’s and a new pair of shoes!
Way to go! I did this several years ago when I realized that all that immediate gratification was going to get me was doomed to living ‘on the edge of crackville’ (where my last house was) for the rest of my life. (You know, people driving by at 2 am with the music blasting from their cars, shots going off down the block, drug dealers doing deals in front of your house, etc, etc.)
It took me 6 years to get my out of debt and get my credit cleaned up enough to where I could move up. I did, this June. This house makes every bit of self denial worth it. 3200 square feet of prime living, baby! (Yeah, don’t look at the harvest gold carpet and drapes. Just pretend until I get it redecorated, okay?)
People I work with, who know how much I make, have asked me ‘how can you afford this?’ Well, they have credit card payments. Car payments. Cable. Its their choice.
You will be so proud of yourself when you reach your goal - whatever that may be. It looks like many of us here are proud of you already. Good for you!
Thanks, guys! I’m really glad I’m doing this - it feels like a weight lifted off of my shoulders. I know in a year, I will feel MUCH lighter and much better and my SO and I will be able to buy a house without my worrying about my credit and my debt. That is the ultimate goal here.
But I’ve already started living on a budget seriously. The SO is visiting next weekend and we’re taking an overnight trip to DC that’s on me. And since I have no more CCs, it’s got to be paid for in cash, so I am carefully conserving my money and spending nothing that’s unecessary so that I have enough to pay for the weekend. I’m dying to go buy a Farscape DVD, and on another other weekend, I’d just go up to Best Buy and get it, but I’m being good right now. I did spend some money yesterday putting together a care package for a good friend who just lost her dog, but I consider that necessary and money well-spent. It’s one thing to skimp on myself, but I’ll never skimp on my friends when they need me.
And once I get these bills paid off, my rule is going to be to learn to save. I want to have 10K in the bank by the time I’m 35.
Thanks for all of the encouragement! I’m going to save this thread and go back to it any time I get frustrated with my debt - to remind myself WHY I’m doing this.
I read both and greatly prefer his methods.