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Friends and family have called me a tightwad or a cheapskate. I prefer to be called "frugal"! About 12 years ago, my husband and I came to the bright conclusion that we had too much debt (after only 3 years of marriage!) We also realized, given our current debt to income ratio, we would NEVER be out of debt. So, we got a consolidation loan to cure our problem. Our cure didn't work because, as a lot of people do, we continued to accrue debt. It was growing quickly! Our second problem was that I desperately wanted to quit work and stay at home with our baby daughter.
By this point we were coming to the realization that we needed to do some things drastically different! So, we cut up all of our credit cards and tried to pay down our debts as much as we could (we started using Mary Hunt's Rapid Debt Repayment Plan). I was learning that paying down debt is like dieting: It's great to lose weight but if you don't CONTINUE your new healthy eating and exercising, the weight will come right back on (and usually twice as much!) It was at this time that I realized getting out of debt and STAYING debt free was more than a budget on paper but it was a heart issue; learning about contentment, thankfulness and frugality.
We were able to get completely debt free in about 3 years (with only my husband's income). We lived on A LOT less and learned to love it! During those 3 years, I read all of Mary Hunt's books, "The Tightwad Gazette" by Amy Dacyczyn, and "Living On Less and Liking It More" by Maxine Hancock. When someone has had a negative behavior, they can't just stop it and continue living like they had before. It helps to have something new, a new positive habit to replace the bad. That, my friends, is exactly what becoming frugal did for me!
At first, it was a game (How much money can I save with coupons this week). However, it quickly became a lifestyle. Since we have become debt free, we have built our own home in the country with acreage. We raise pigs, our own chickens, and we have our own orchard and garden. I've always loved to garden but recently I read "Growing Your Own Groceries" by Kimberley Eddy. This book was very encouraging and informative on how to grow and can enough food for your family for a year. We have 4 children, so saving on groceries is a constant challenge for me. Leaving the grocery store, knowing I've only spent $75, gives me a greater high than I ever received from charging stuff at the mall!
One major tip I have about being frugal is: Give away a portion of all that you make. When you give, it always comes back as a blessing! Don't confuse being frugal with being stingy or selfish. Instead, being frugal frees up money so you can give more away. Once you become a frugal minded person, there is no turning back. I know some people may roll their eyes, thinking one can go too far in being a tightwad. I agree with Maxine Hancock in "Living on Less and Liking it More", she says: "We sit in our living rooms and look into the unseeing eye of our TV sets and see not just individuals but entire cities and nations going bankrupt. And at the same time, we look into the empty eyes of swollen-bellied children of famine who are somehow, impossibly, still alive. And we know that somewhere, in some way, we are all personally responsible."
But just sitting around with vague guilt feelings haunting us is hardly a sufficient response. We need to seriously reevaluate our whole set of life goals and to ask ourselves, "Where are we now? And where are we going?" We must put to ourselves the question worded by World Vision director, W. Stanley Mooneyham, "Is my life style supporting a famine somewhere in the world today? If we are, indeed, people not content to sit back and wait in helplessness for the breakers of present and future shock to overwhelm us, we need to become actively involved in adjusting our goals, expanding our ethic, and moderating our life-style to meet the needs of this changing age."
Aleksandr Solzhenitsyn spent 7 years at a Soviet prison camp; the world would be a better place if we would follow his advice. He says, "What about the main thing in life, all its riddles? If you want I'll spell it out for you right now. Do not pursue what is illusory- property and position: all that is gained at the expense of your nerves, decade after decade, and is confiscated in one fell night. Live with a steady superiority over life - don't be afraid of misfortune and do not yearn after happiness. Our envy of others devours us most of all. Rub your eyes and purify your heart - and prize above all else in the world those who love you and wish you well."
I love my frugal life!
By Christy Brashers
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Awesome story and so true and well written.
As with anything, this takes time, and as a result, takes patience.
I would also add that you must begin to live more frugally, learn to tell a want from a need, and enjoy the contentment that can come from being in control of your finances instead of them controlling you.
I am 31 years old and own my home (owe nothing), I drive an older car that I saved money for and paid cash. I only have to pay monthly living expense bills. Due to this when I lost my job the beginning of this year we were able to survive on my husbands income.
Our rule of thumb is if we can't pay for it now we don't have to have it. If we really want it then we save for it. My husband just built a garage this summer that we paid for with money that he has saved for the past 5 years. It would have been nice to have the garage 5 years ago but we survived with out it.
The secret is, whatever money you get back, you add to any other "found money" (like the amount you have saved by reducing other services) and you apply this money to your debt. Another huge difference for me was sending an additional payment as soon as I received "found money" instead of waiting to send it when the bill was due. Your credit card company or other people you owe money to will be happy to accept a payment at mid-billing-cycle, call and get instructions, and be sure to put your account number on the check. That way, you won't be tempted to spend the money on anything less important than getting out of debt. YOU CAN DO IT!!!!
By Becki in Indiana
Then use your red pen to mark the unnecessary expenditures. Entertainment and convenience foods are big ones. These expenditures can be cut, and the money used towards paying off debt.
Figure out what you owe, and how much "extra" in fees you are paying everyone. Pay off the highest interest/lowest bills first. Hospital and college loans usually can wait the longest, don't put those on credit if you can make a deal. Pay minimum payments on all but one bill and put *everything you can* into that one bill. Once its paid off, do the same with the next card. If you have Discover or another card with good rewards, use it for groceries, pay it off completely each month, and use the rewards to pay extra bills or to buy essentials.
The important thing is to cut your spending so you can pay off bills ASAP.
All great ideas but don't do the highest interest first, do the smallest amount owed. This way you don't get frustrated so early in the game. Example; 1 card has 25% interest but the amount owed is 10,000 dollars, a second card has 19% interest but amount owed is 1,000 dollars. Knock out the smaller card ($1000) first. Trust me I have been doing this for about 3 years, the first 2 was dedicated to the highest interest card and 2 years into it I got frustrated and nearly gave up, so I moved it to the smallest card and 6 months later it was paid off.
One small victory and I felt great, then I took the money for that card plus what extra I was paying and moved to the next smallest debt(card). it will be paid off in the next 2 months. Keep moving from there. The small victories only help reinforce the positive reaction that started you on this venture and can tell you interest really doesn't matter as long as you are consistent in paying extra on one card or debt and be content with the minimums on everything else.
Oh by the way, some credit card companies may lower your credit line, please don't let this get you down either. The goal is to eliminate them anyway so let them. When it is all said and done, they will be begging you to use there card.
For every day I don't buy a scratch-off lottery ticket, I put the $2 I would have spent on it, and put it into an envelope and as it builds up I take it and apply it to a debt.
Shaunta Alburger has agreed to write articles for ThriftyFun. This is Part 1 of a 4 part series she has written about her plan to go on a Debt Crash Diet in 2006.
Making only the minimum payment on your debt not only lengthens the time it will take to pay off but it also ensures that you pay more interest. Why give them more of you money than necessary.
The average American credit card debt is over $5,100. While it may not seem like it, this balance is manageable. Within three yeas it can easily be paid off provided that new charges are not added to the debt.
In the book Your Money or Your Life, author Joe Dominguez makes the point that money is really an exchange for your life force. Every dime spent, represents the time and energy you spent earning it.
Ideas and tips to help you stay motivated and inspired to pay off debt. Post your ideas.
Pre-teens are notorious drama queens. (The girls and the boys equally!) There is no easy way to tell them things are going to change drastically. Giving them a couple of months heads up helps.
In order to meet our goal of paying off nearly $20,000 in debt and saving $12,000 in 2006, it was clear that we would have to earn more money.
I just found a great financial resource. We all have issues around money, and a place to take those issues is Debtors Anonymous (or DA for short).
As a former Credit Analyst and Credit Counseler, I have to say this debt calculator is the best! You can see how long it will take you to pay off your debt if you only pay your minimum payments.
Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.
I hope someone can help me with my problem. I am deep into debt and I would like to know if someone could guide me with a very basic easy way to get myself out of this ordeal. I have tried everything that i could and still I fall back. I am going to start this week when i get paid to get this monkey off my back. Could suggest a very simple and basic budget or using the envelope method what ever it takes. I don't want any thing that is to complicated right now.
I am looking at about seven thousand in total debt that includes miscellaneous items and credit card debt. I also owe the IRS. What should i do first? I get paid bi-weekly total of 679.86 monthly. Also, I have a second job in retail so that check is not always the same, It goes by the hours I work. Help me please someone.
Malmal from Boston
I would add the following points: 1. Read Eric Tyson's Personal Finance for Dummies (in fact, anything by Tyson is great) and don't let the title offend you. 2. Get rid of ongoing or repeating expenses, such as monthly cable TV bills, monthly cell phone bills, put away your dry clean-only clothes, etc. You can live without cable and your dry cleaned clothes for a couple of years. 3. Consider trading out or down with your car or your housing. If you are in big trouble it might be better to trade your car down now and get the most for it than to let huge interest rates jack up your total debt. If you have a more expensive car than you should, sell it now and get something that reflects reality, using the extra $ to pay off debts.
Don't claim bankruptcy. It's not fair to put your bills on others and drive them under too. Pay them off gradually as best you can.
We have over $22,000.00 in credit card debt, 2 car payments and can't get rid of them for we owe more than they are worth, a house payment and heloc loan we got when we purchased our home for the down payment, medical bills, and the utility bills.
We have an 18 y/o senior without a car but she works a part time job which is not enough to save for a car, she has a 3.86 grade point average but has not qualified for a college scholarship which she needs desperately.
Bottom line is that we have way more bills than income and are sinking fast. I am married and mother of two. I hardly know them anymore for I work all I can.
The bills are all paid on time so far but I know without a miracle, we will sink . Does anyone out there have an answer that will give us some hope? Your help is much appreciated.
My husband is out of work on medical leave in which doctor will not release him to work at this time. He still has insurance from his job but has used up his disabilty money which has left him with no income but his company is still providing the medical insurance.
I am a nurse and work hard. We are not lazy people but I know we have made bad choices. Thank you in advance for some good advice and your prayers most of all.
Hi I am the original poster form 2005! I came back to this site and seen that I had replys in 2007! Wow thanks for your comments. So I thought I would update you on where I am at present. I did not file bankruptcy. I just paid off one car and it has 230,000 miles on it and I still drive it everyday 114 miles to and from work. My prayers are being answered in that it is still dependable. I let some of the credit cards go into old bad debt. I have started paying on one and made some payment offers on two more but I do not have a reply back yet. My husband never got another job but he draws SSI now. He pays the light bill , his truck payment , and car insurance. I pay the rest of the bills and it takes every dime. If a miss a day of work ( as in the extra days I normally work )then I get behind. I have tried to find cheaper housing but rent is more or the same as my house payment so why bother. I have ask several different companies for help and no one can really help. It is discouraging but i am surviving. I do feel that I am in this alone and sometimes I get angry with my husband because he does not take extra effort to help. I work so much that I have missed my children's childhood. I have three more years with my youngest child before they go off to college hopefully with a scholarship! I don't see any hope of have any time to spend with them because I must work work work to keep us from drowning. It saddens me deeply but I have learned to accept it and do what I must do. I will rent that movie the secret as one reader suggested. They also were going to send me a web site that could help. I never got that web site. so ...Jane if you read this will you send it to me? Thanks so much to all of you. I would love for you to send me more suggestions. I need the support to get me thru until every debt is paid in full.
I hope the original poster reads this &/or it helps others. I am retired from the Social Security Administration last working in the Office of Disability & Review component where judges hear appealed disability cases. This is the Agency that administers the Supplemental Security Income (SSI) program. If your husbands still gets SSI payments, even if the check is only $1, he is eligible for Medicaid health coverage through the state. This pays for everything and includes about 3 or so prescription drugs a month (use this to pay the most expensive or get a prescription for 2 months worth), basic dental care, and basic eye care.
In addition, in most states, if you receive SSI you are eligible for food stamps with the state. Also, if you receive food stamps, you may be eligible for utility assistance (like in Texas electric assistance during the hottest months and phone assistance). Check with the state to see what you may be eligible for. See if your daughter qualifies for a work/study program with a federal agency. For example, these students generally work at entry grade level for a semester and then go to school a semester and also have summer employment. When the student graduates, he/she gets a permanent job offer that student can accept or not. Have her decide what type of career she is interested in, then go to an Agency that does that type of work.
Can anyone tell me if this is still true? If you owed someone money and they never collect on the debt for the 1st seven years then the debt is null and void (like you had filed bankruptcy against it,) and they can no longer collect money from you?
By Teresa W.
There is a law like this, I'm not sure how many years have to pass, but you have some things wrong. The debt has to be from a bank, credit card, store payment, etc - not a personal money loan from another individual. if the loan was spoken about and you promised payment, you will still be responsible for payment.
For example, if the day before the time limit was to expire, and the credit card company called you, and you said that you'd mail in a payment or even try to make a payment sometime, then the time limit restarts from the time of that conversation - it is a revolving time-limit. And the companies do record the conversation, so you can't get away with lying.
If this is a personal loan from a friend or relative, these laws don't necessarily apply, but that person has options too: they can take you to small claim court and attach you wages, disability check, or any future income you may get - even years later, they can sue you if the amount if high enough and take your property, they can report the loan to the IRS as income given to you which you failed to claim and pay taxes on - do you really want to owe the IRS back money with interest? The IRS can freeze all your accounts and lock you out of your own home. Or, you can be a responsible person and pay the money you owe.
Well, - my two cents worth - it sounds to me like your grandfather was a very honorable man and needs to held as a fine example of the type of character we should all strive to be. My kudos to him and anyone like him!
My income is cut in half. My credit card bills are overdue. They are calling all the time and I don't have extra money to pay them. How do I start climbing out of this hole that I am in? I can't get a second job; I have tried! I can't even sell the family heirlooms. I am scared and worried! Any advice?
By Lynette from Ann Arbor
About a decade ago I was the victim of a scam and lost all my savings. At the same time I lost my job. My attorney advised me to just stop making payments on credit cards and change my phone number to an unlisted one. I was appalled as I had a lifetime credit score above 700 . Circumstances forced me to do just what the attorney advised. I had several bad years with the banks threatening everything short of physical violence, but then the threats and the harrassment began to slack. After seven years I started to rebuild my credit history, first by saving enough money to get a credit card from my credit union by backing it with my savings. I once again have a credit history over 700.
The guilt I felt disappeared last year when the government rescued the banking industry with our taxpayer money. The only credit card I have now is one with a $1,000. limit from my credit union in case I need to rent a car and it is backed by my own money.
Each city usually has a free company who will help you get out of debt. I went to Consumer Credit Counseling in Houston, Texas USA.
You bring everything with you regarding your debt, plus a list of what you spend things on, even stamps and magazine subscriptions, hair cuts, etc. Then CPA's, financial people give of their own time freely to put you on a schedule. They'll contact your creditors and will help and encourage you.
Make sure it is free. Do not, please please, go to these companies who advertise that they will 'make your debt go away'. This usually involves personal bankruptcy and you don't want that, for a lot of reasons.
If you file bankruptcy that means that You purchased items and didn't pay for them. That is stealing and you don't want that in your life, do yourself a favor!
Good luck, dear. It may seem like you'll never see the light of day, but believe me, with this kind of help, you will. Do you believe in God, or a Supreme Being? Pray, pray, pray. You'll be doing your part by getting help, but the miracle of the success will come from God, believe me. Pray that He will take away your fears and give you His peace.
Fear will paralyze you and you sound frozen. There should be an organization in your city where other people who are/were in debt can all talk together, share ideas, comfort you.
Also, and this is brutal, look inside yourself and determine what you did to get where you are. Self examination one of the hardest thing to do, but you have to find out how you got where you are so you won't find yourself there again. You must become accountable for your actions and make restitution for yourself and whoever your debt has touched and effected other people's world.
Many organizations, churches offer free counseling. Working with a non biased person will help you. You can say whatever you want and you will have to be very brave, in order to get to the core of what happened. It will help you so much to talk to someone who is in your shoes.
Right now, do whatever you can to save money. I ate a lot of peanut butter and soup. I stopped buying clothes, even though I shopped at Marshalls'.
Thank God I'm out of debt now, but guess what? I still shop at Marshalls and resale shops for clothing, shoes, handbags, etc. I eat peanut butter and soup.
I do not have a credit card, except one that is used in only extreme (car repairs, etc.) circumstances.
God bless you.
Do I really need a credit card? I am a divorced mother of two and wanted to get rid of some debt. Does it make sense for me to have a credit card? I'm wanting to close my credit card and just put money into a savings account.
I agree. Just because you have a credit card doesn't mean that you have to use it constantly. A credit card is a tool, and does not open the door to foolish spending unless you allow it to. Keep it for emergencies; you may never need it, but if you do, you'll be glad it is there. Just because you keep it, do not stop putting money into your savings account. This is what will give you options and allow you to pay for the emergencies.
Google Dave Ramsey. He has a national radio show all about cutting up your credit cards and becoming debt free. It will change your life!
I cannot keep paying this credit card at 39%, what can I do?
By yoyojoe from Las Vegas, NV
Try first pleading with the credit card company and see if they will offer a reduced rate or some other plan. If you use a credit counselor make sure it's a non-profit one because the for profit ones are sharks :-(
I finally had to declare bankruptcy, thinking I would be ruined for life, but I haven't been and it's been now eleven years. All I have now is a build up of undeserved medical bills I told each one in the beginning I could not pay, but who said it's ok anyway! I haven't ever had a credit card since, by choice.
Try DIY bankruptcy, I hear it's both possible and works?
Would it be better to get my credit repaired by going down the list to pay off collections, charge offs, and other delinquent debts when I get my taxes, or shall I seek a credit counseling service, or a debt consolidating company, or should I wait til these reduced percentage choice offers come through the mail box? Please help me because I am truly suffering, I cannot get a loan. I am constantly rejected.
By Crissie from Los Angeles
Get into a consolidation program. They can talk to your debts and get the amounts lowered. Then when you get your tax return you can pay them off and stop using your cards.
Debt consolidation companies are almost always a scam. They often charge high fees for their "services," and do not always deliver on their promises to help ease your debt problems. In my state (MO), debt consolidation/credit repair scams are one of the top consumer complaints to the Attorney General's office.
For credit counseling, call 1-800-388-2227 to find your nearest Consumer Credit Counseling Service or visit their website at http://www.nfcc.org/.
The quickest way to pay off your debt is to start with the highest-interest accounts and pay them off first, then move down your list accordingly. Pay everything on time. If you cannot make your payments, work with your creditors to establish a repayment plan. CCCS can help you with this. Time - and only time - will repair your credit rating. Do not apply for more loans because every time you apply, your credit rating takes a hit.
How to become a debt free?
By Roager F
There are several ways to become debt-free. One is to file for bankruptcy. You will not lose your house or your car, and once you begin to file for bankruptcy, you will be protected so that your creditors can no longer hound you. It cost around $2500.00 to file which may sound like a lot, but since you're are no longer making payments on your bills, you will have the extra money every month to make payments to your lawyer. Most lawyers are willing to make some kind of payment arrangements. You will also have to take some kind of classes, but these can be done online. Some debts, such as student loans, can not be discharged through bankruptcy.
The other method is to pay down your debt. Start with your bill that has the highest interest, and take as much extra money as you can afford every month and add it to the payment of that bill - while still continuing to make payments on your other bills. When the first bill is paid off, take all the money you were paying on that bill and add it to the payment on your next bill, Repeat this procedure until all of your bills are paid off.
The best way to become debt free is to sit down and write out a budget. There are several sites (including this one) that have loads of free info on how to create one and many offer free template downloads.
But the basics are this-in one column write down all the bills you must pay each month (rent or mortgage, utilities, personal loan and credit card repayments, insurance, cable and internet, mobile phone, etc).
In the next column list what you spend on groceries, petrol, clothing.
In yet another column list what you spend on 'misc' items like books and magazines, theatre tickets and/or movie and video games, meals out, cigarettes, beer or other alcohol, and similar expenditures.
Be honest-if you splash out on a latte every day, write it down! If you spend a lot on groceries, make sure you write that down. Always round up to the nearest dollar to give yourself a bit of a cushion for price rises.
Total each column and then add the totals together to arrive at one sum to represent your total monthly outgo.
Now list your total monthly net (after taxes) income.
Compare the two totals.
Oh dear! You're spending far more per month than you are taking in!!
So go back to the outgo columns, figure out what you can eliminate and then do so. Stick to it.
It will take a while to pay down whatever debt you have, so stick to it. Double up on payments like mortgage and credit card or other personal debt-make sure to note on the doubled payments that the extra is to apply against the principal or the sorry creditors will apply it against interest only, and you'll still have that big principal to pay down. They love to do that because the higher the amount of the principal, the more interest they can charge you-it's a vicious and never ending cycle, and that's how they make their money, from interest!
It won't be easy but being debt free is the absolute best feeling ever.
ThriftyFun is one of the longest running frugal living communities on the Internet. These are archives of older discussions.
Consumer debt is through the roof right now. Americans have more credit card debt than ever and are having a hard time paying it off. With lowering home values and skyrocketing foreclosure rates, many people are struggling to keep their homes and maintain a good credit record.
I have a major problem. When I was in my late teens I moved out on my own and got approved for two credit cards. Of course not thinking ahead I maxed them both out and beyond that point. It is now several years later and my 23% interest rate credit cards still exist with a combined total of about $6,000.00.