"Going from $15,000 in credit card debt to being debt free was an incredibly freeing experience - everyone should work at being debt free and thus feeling less enslaved by the man."
How I did it: Once I got serious, I went from 15K debt to no debt in about 2 years. I really applied myself throughout 2008. I was down to $3000 of credit-card debt in Oct. 08, then got laid off. Instead of freaking out about the layoff, I took my severance pay and paid off that last $3000. Finally, no debt! I also put every penny of that $600 tax refund check most Americans got last spring towards my debt. I paid the minimums on all my cards except the one with the highest interest - that one I paid the most on, as much as I could possibly spare, so that I spent as little on interest as possible. I also sold some of my possessions on half.com and amazon.com and put that money towards my debt. I realized I had enough clothes, books and grooming products and now rarely buy them. When I want new music, I borrow from a friend or the library. I sell my CDs - who needs them when I have MP3 copies? I eat out less. I cook more - these things have also had the extra benefit of helping me lose some excess weight. Being debt free is an amazing feeling. Makes being temporarily unemployed a lot less scary!
Lessons & tips: We don't need so much stuff! I think lots of people are realizing that now, in this financial crisis, but I started realizing this quite a while ago. How many shoes do we women reallly need? Do we need to buy every DVD we plan to watch? Cutting back on purchases was an odd experience - some of my girlfriends said I was being unkind to myself, that I "deserved" to spoil myself by buying what I wanted, but I ignored them when I realized that decreasing my debt felt better than a new dress or an overpriced night on the town. I still like some splurges but I plan them and savor them. They're more special now. I use my credit cards a bit but just to maintain my credit rating - I pay off the entire balance every month and won't charge more than a couple of hundred dollars a month. It's January 2 and I've already paid off my Christmas presents. I think we all need to remember to stop rewarding ourselves by buying stuff. I'd rather have more savings (still need to work on that) and spend my money on experiences rather than stuff. Working so hard, as most Americans do, just to buy a lot of stuff seems crazy to me!
Resources: Suze Orman's books. Also, mint.com helped me track all my debts in a very orderly fashion, with weekly updates and reminders of payment due dates.
1 person found this helpful
Jan 02, 2009, 10:55PM PST
| 2 comments
| 4 cheers
