Get Out of Debt, Now -- no, really

[helwen]

I highly recommend this article on Getting Out of Debt.

It goes through how an example couple got out of debt, and has some suggestions, some of which people may find useful, others they'll no doubt reject. They're just suggestions, and maybe they'll be useful.

L and I have two cards, one of which we'll be getting rid of, and both of which are paid down to 0... I don't like using the bank card for online purchases, so I use a credit card and then send money to the card account as soon as possible -- I don't wait until the bill comes in the mail. I do still have one school loan, but we're working on that, even though the interest on it is very low (2.875%). So far, L's job has been stable and we certainly hope it stays that way, (knock wood!), but there are no guarantees in life, especially these days.

We're also going to work on changing from universal to term, for life insurance, which should help both with monthly expenses and being able to pay off the school loan. It's been a tough row to hoe at times -- harder when we owned a house -- but now it's nice to be able to spend money on stuff instead of on interest. Although, truth to tell, I can't say we _really_ suffered, because we were still going to SCA events and getting gifts for people and stuff like that, but things are a lot more relaxed now :)

Friends, family, a roof over our heads, and food in the pantry. It's all good.

Comments

[gardengirl6.livejournal.com]

This was a good article! (I would have regarded it even more highly if it had been spelled and punctuated properly, though *wry grin*.) I have never understood how people can sleep at night if they're carrying balances on credit cards... I think a lot of people think they "need" an awful lot of stuff that they actually just want. But that's my opinion, worth exactly what you paid for it.

[helwen.livejournal.com]

I think you're right that folks get a lot of things they don't really need. I try, but I still get things I don't really need. But I sure think more before getting them, and that does make a difference, avoiding the impulse buy.

For us, debt kind of went up and down, partly how much income we had, partly life changes. We did have one large unnecessary expense in 2002, going to China and Tibet. Awesome experience though, truly once-in-a-lifetime. And medical expenses... those are always fun. Why no, health insurance _doesn't_ cover everything :p And we did get some help from family (loan), which actually served to get us really determined to get things under control, because we didn't want to have to need that kind of help. I think we could have done it without help, but it would have taken longer, especially when L was doing contract work and I was an office temp -- and our health insurance was dependent on how many hours/month I got in assignments.

In our case, I think some of the debt added up because we were too busy working to pay enough attention. It was just 'easier' to use the card.

I kind of enjoyed our leaner times in some ways because I really got into exploring how much I could do with what we already had. It helps to be a hobbyist in this case... I did a complete redecoration of our bedroom in Holyoke for $15 -- the cost of the two little finished shelves that were just the right size to fit onto the two doors we had on one wall (they became our night tables for the bed). Everything else was furniture rearrangement and re-purposing stuff we already had.

As for now, we'll be renting for a few more years I expect, because even though we're doing well financially, the mortgage scene is a tough one, and until L is done with child support we'll never get approved. We were able to buy the Holyoke house because I had a full-time job at the time, so I bought it as a first-time home buyer.

Z's thinking of taking a semester off, but even if he never went back support runs until age 21; unless he suddenly decided to move out and live on his own, which would be silly of him. Besides, we'd rather he went back to school even if he ends up taking a few more years past that... education's important, and he'll need the courses for advancement as a fireman/possible future EMT.

[imarketing4s.livejournal.com]

There are various financial services in the market that offer credit card debt management for people who are not able to manage their multiple credit card debts. Hopefully people can find the help they need to eliminate debt. Thanks for the info!

[helwen.livejournal.com]

Welcome!

Yup, some of the financial services are good. We did things on our own, although the main things we cut for a while were cable tv and going out to eat as much, and of course buying very few things that weren't necessities -- kind of made them more of a treat...

We never had some of the habits the example couple had, like the coffee/danish or weekly dry cleaning. And we were trying to get into better shape anyway, so walking to nearby stores to shop was a natural replacement for driving. A lot of our personal debt resulted out of life changes, like getting divorced from our previous spouses, which even if you're all trying to do it cheaply can run up some bills. I had a car accident as well, and both of us had various medical bills. It adds up surprisingly quickly. I suppose we did do a variation on the 'romantic vacation' though -- we went to China and Tibet (single trip) back in 2002 :D Definitely a once-in-a-lifetime experience! But we don't make a habit of traveling, especially flying.

The financial services can sure be useful for folks who have a hard time organizing and sorting out what their priorities should be, plus for the really badly off ones, arranging affordable payments with their credit card companies. Unfortunately that latter service may become harder to acquire in the near future, with the stability of the banking system not being what it once was.