Get Out Of Debt, Fast…
If you want to be able to prepare for whatever life throws at you
When my husband and I were young (and unfabulously broke!) whippersnappers, we didn’t have a single credit card between us.
Somehow, we knew instinctively that if we’d applied for one (which, as unbelievable as this sounds now, required copious amounts of proof of income, length of employment, length of time at one address, etc.), we’d get turned down by people laughing their heads off on the other end of our request.
In spite of those censors, though, we did the math. (Hey, we went to Catholic schools!) We knew that if we wracked up $500 in debt, we would not be able to make even the minimum monthly payments without our young children going without macaroni and cheese (Aldi’s brand). And so we self-regulated, a habit I highly suggest for not only individuals but also banks, the mortgage industry, the healthcare industry, the auto industry, and the government. But I digress. :)
We kept ourselves from giving in to the lure of debt for the first 15 years of marriage and managed to save just enough cold hard cash to bail us out of frequent minor emergencies. We never got ahead, though, in the sense of our standard of living seeming to increase. We stayed even with the world, period.
Gradually, our income increased and like magic, so did our expenses. Why did it look like we’d be able to really start saving for the future, when the reality was that our growing family’s “needs” took all the increase and then some?
You see where I’m going with this, right? All it took was for us to begin to feel firmly entrenched in the prospering middle class (plus a loosening of credit which, of course, we now recognize as one of the biggest reasons why our economy is now flailing…), and darned if we didn’t go out and get us a shiny new credit card. And a big old payment on a Dodge Caravan, too!
Evidently, our fortunes had reversed and all of a sudden—-miracle of miracles!—-we were “good for it.” Or were we?
I can’t tell you how many zero-percent-on-balance-transfers I’ve opened over the years. Granted, we never spent a single dime on interest to a credit card company. But the balances, and attempting to pay WAY more than the minimums in order to pay them off in our natural lifetimes, kept us from adding substantially to our savings. For YEARS.
Have you noticed that when you don’t have a hefty emergency fund, you seem to have no choice but to whip out that credit card yet again? But how do you build up your cash reserves while continuing to service debt?
They say the first step in getting out of a hole is to stop digging. If you want to get out of credit card debt, you must stop adding to it TODAY. And that’s exactly what we had to do. Two years ago, we accumulated enough of a cash reserve to get us through everyday life, and then every spare cent went to pay down debt, Dave-Ramsey-snowball style.
I truly enjoyed the satisfaction of watching several significant debt balances disappear one-by-one. I LOVE getting free-and-clear car titles in the mail, instead of bills from auto finance companies. And then, to be able to divert those funds into savings? The way I see it, that’s one of our Big Tickets out of the mess we (as a nation) currently find ourselves in.
If preparing for emergencies, downturns, and disruptions in services is an important goal for you and your family, I hope you’ll make it a priority to get out of debt as quickly as possible. Once you’ve accomplished that, you’ll find it easier and less stressful to go about building for your future.
And you won’t require a single credit card to make it happen.
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