I am not a patient person, especially when it comes to money. Once I made the decision to get rid of all of my consumer debt, I didn't hesitate. I came up with a plan to get out of debt before my 30th birthday, which was about two years away at the time. My secrets for getting out of about $60,000 worth of debt involved being more conscious of my spending and earning habits.
Most people have some kind of epiphany that spurs them to get out of debt. I didn't really have one particular moment that motivated me to make a change. A series of financial disappointments precipitated my new money habits. I had been turned down for a mortgage loan. I was tired of receiving bills in the mail. I knew the high interest rates on my credit cards were robbing me of my future.
Although many shopaholics go out of their way to shop alone, I find I spend more when I shop with others. I had to recognize that some people are detrimental to my wallet. I didn't have to give up my friendships, but I did have to stop shopping with spenders. By shopping alone and sticking to a budget, I was able to speed up the process of getting out of debt. I didn't just replace the debt I paid off with new debt.
Marrying a saver
I made sure to marry a person who had a good grasp on his finances. I didn't want to marry a spender who would tempt me to run up credit card debt. My husband does occasionally like to travel and spend money on entertainment, but he doesn't run up debt. We made a vow to always pay off our credit card balances so we could build wealth instead of treading water. Even though I didn't have any credit card debt when I married my husband, we did take on mortgage debt. We are aggressively paying down our loan.
Earning more money
I got out of debt in half the time by almost doubling my income. Even though I don't have to work as much as I did when I was in debt, I still use the same approach to stay out of debt. Whenever we are hit with an unexpected bill, I find creative ways to earn more money. I've participated in marketing research studies that pay well for just a few hours of my time. I may temporarily work overtime until a bill is paid.
Putting savings on hold
I sped up my debt repayment plan by devoting all of my extra money toward debt. I put off saving for retirement and an emergency fund until I had wiped away my student loan and credit card debt. After I got out of debt, I was able to save more money than I ever expected to save. I was able to use the same discipline for paying off debt to now save for the future.
Although I have occasionally had to deal with small amounts of debt since getting out of $60,000 worth of debt 10 years ago, I have been able to improve my net worth. I found out my debt was costing me more than thousands of dollars in interest. It was also costing me my sense of security, freedom and happiness. Now, I pause before making any purchase, even something as trivial as coffee. And, I may take weeks or months before making a decision about purchasing anything as major as a new car. I know I can get back in debt just as quickly as I got out of it.
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- credit card debt