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Getting Out of Debt

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Consumer debt is at all time highs and the interest on carrying large amounts of debt is very expensive. Carrying less debt is something that every household should strive for. This guide is a guide about getting out of debt.


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By 0 found this helpful
July 28, 2006

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. My Frugal Life

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

Do you have a frugal story to share with the ThriftyFun community? Submit your essay here:

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June 23, 20061 found this helpful


I ran across a little plan to get out of debt that really works if you just stick to it. Here it is:
  1. Begin with your debt that has the highest rate of interest. Now pay the minumum payment plus 5%-10% of your monthly income, whatever you can commit to on a regular basis. Continue to pay the minimum payment on all other bills for now.

  2. When the first bill is paid off (WOOHOO!) take the amount of the 1st bill's min. pay.+ the 5%-10% that you had been putting onto the 1st bill and add that to the min. pay. for the second bill. Pay this every month until the second bill is paid in full. Continue to pay the min. pay on your other bills.

  3. Now that you have the second bill paid off, take the min. pay. from the 1st bill, the min. pay. from the second bill, and the 5%-10%, and add this to the min. pay. for the 3rd bill. Now you are making a nice payment to this bill and it is being paid off more quickly than usual. Of course, continue to pay the minimum payment on your other bills. Keep up the good work!

  4. By the time you get to the 4th bill you are making what will seem like lump sums to paying off this bill. The trick is to keep the money that you were putting on bills going to paying off bills instead of incurring more bills with the extra money each month.

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.


First Step: Get Rid of Credit Cards

This is not something that is easily or quickly done. The first thing you need to do is get rid of any credit cards. Make as much as you can for payments on any loans or credit card bills you currently have. Before you ever borrow money for something make sure that it really needs to happen.

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.

By Pattie Hartley

Start Paying off Highest Intrest Debts First

  1. Dont make any new debts.

  2. Pay off your debts starting with the one charging the highest interest. Make minimum payments on the others.

  3. When you get the one charging the highest interest paid off, start on the one with the 2nd highest interest and pay that one off, and so on. Do this until all debts are paid including your car and your house. Do not acquire any more debts until all your current debts are paid off.
Make a distinction between "wants" and "needs."

By Carol

Cut Out the Extras

Sit down and really look at your bills. Is there anything you can cut? For example: Keep the basic phone service but get rid of call forwarding, call screening, and anything else you are paying extra for. Keep the basic cable but get rid of the "premium" channels. Do you subscribe to lots of magazines? I was shocked and appalled to realize how much money I spent on subscriptions. $10 here and $10 there adds up and I hardly had time to read them anyway! I contacted all my magazines and asked them to stop service immediately due to "financial difficulties" and refund the unused portion of what I had pre-paid. I wound up getting about $30 back!

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

Monitor Your Spending Habits

First, spend 2 weeks-a month writing down every penny spent. Even the quarters you drop in the charity bin. You'll be surprised how much the little things add up.

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.

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By 1 found this helpful
February 9, 2006

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.

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Shaunta Alburger0 found this helpful
January 10, 2006

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.

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Shaunta Alburger0 found this helpful
January 13, 2006

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.

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Kelly Ann Butterbaugh0 found this helpful
September 8, 2008

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.

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August 10, 20111 found this helpful

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.

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June 23, 20060 found this helpful

Ideas and tips to help you stay motivated and inspired to pay off debt. Post your ideas.

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Shaunta Alburger0 found this helpful
January 11, 2006

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.

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Shaunta Alburger0 found this helpful
January 12, 2006

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.

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January 19, 20180 found this helpful

Using this method of making larger payments on consumer debt and paying them off in sequence can work for many people. This is a guide about using snowball payments to get out of debt.

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June 11, 2007

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).

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By 0 found this helpful
April 10, 2005

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.


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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.

March 31, 2005

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.



By Ronsan (Guest Post)
March 31, 20050 found this helpful

Have you checked with any local foodbanks or an organization in your area that can provide some relief for you on your grocery bills? Also, check with the same organization for heating assistance or any other type of help they can offer.

If you aren't already using a budget to get the maximum out of your financial resources, I would strongly recommend putting one into play. It will help immeasurably to see where the money is going and how you can use it to better advantage.

Call your local Extension office and see if they have any helpful booklets on budgeting, low cost meals, etc.

Surf the internet for all kinds of helpful advice on budgeting, consolidating debt, accerelated strategic debt reduction plans according to your debt load and based upon your current income.

Spend lots of time going through back issues of every thrify internet site there is because you will find a wealth of hints and tips for keeping more of your money in your pocketbook to be applied to those debts.

I wish you good luck! While getting out from under this kind of debt can be a challenge and at times will seem disheartening, it can be done!

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By Ang (Guest Post)
March 31, 20050 found this helpful

Approach all the foodbanks and also goodwills in your area, go through your whole house and garage and sort out anything that may be sold in a yard sale. Approach all of the agencies and people you owe money to and explain your situation to them fully and honestly. They will see that you are a woman of integrity and honor and in all likelihood will be open to an arrangement for payment that will be easier on your family. Seek budgeting advice from an agency that offers this service for free. Many church s do this.Never miss an opportunity to gather free food for your pantry or freezer. Become a hunter gatherer. Also, make do and mend as our grandmothers used to say. Keep your family together, and continue with your faith. You are in our prayers. All the very best for the future. Please let us know how you get on.


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By Debe1204 (Guest Post)
March 31, 20050 found this helpful

Have you checked out Consumer Credit Counseling?(or some similar non-profit organizations?)

My sister was in a similar situation and she contacted CCC and they helped her reduce her monthly expenses (on Credit Cards) by almost $400.00 month. This action saved her from filing Bankruptcy..which she did NOT want to do.

Good Luck

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By Barbara Lewis (Guest Post)
March 31, 20050 found this helpful

Been there......not as deep in debt, but had the dh on disability.......immediately go online and apply for Social Security.......they may help till he is back to is a hassle, but worth it......apply for foodstamps, all utilities as they sometimes will lower your bill for the time, if you have AOL, call them and tell them your situation, they usually give a few free months-if not cancel and go on 'free' internet, apply for free lunch at school- ask if they have any help available re graduation expenses, all creditors as was said before and explain the only one car and try and take the insurance to minimum for the other car.....ASK relatives to help.......if all else fails, figure out what is important and pay all of that first........use libraries for entertainment....videos, CD's.......enjoy your family.......this will pass and you will probably learn what not to do next time.....and think how strong you will be then......good luck and keep intouch with the group.""

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March 31, 20050 found this helpful

The hardest thing to do is to take one day at a time and get through that day. Turn it all over to God and He will get you through each day. That is how I get along. You ask Him for help and He helps. I will pray each day for you.

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By Kathryn (Guest Post)
April 1, 20050 found this helpful

My heart goes out to you and your family.

We too have been ear deep in debt and are still somewhat clawing our way out of it. We have four kids who range in age from 9 to 24. It's scary not knowing how you'll make ends meet.

Fortunately we were introduced to the Dave Ramsey website ( ) and learned how to prioritize and budget our money. He has several books out and I'm sure some of them are available from the library.

Two of the best tips we got from him are: 1) name every dollar before you spend it; and 2) protect the "four walls of your house"

Name every dollar refers to his zero based budget idea. The idea is that you sit down with a piece of paper and list each check. From each check you deduct each expense you have before the month even starts. That way you know where your money is going. You direct your money rather than trying to chase it down and see where it went after the fact.

Also, as you pay your expenses, you pay them in a certain order which protects the "four walls" of your house. What are the four walls? The four walls are what every family needs in order to survive: food, shelter (rent, utilities, etc), transportation (gotta get to work), and
(reasonable) clothing. Credit cards and other revolving debt gets budgeted last.

He also has a three hour radio show he does M-F. If you don't have a local station that carries it, the broadcast is also available off his website for free.

I wish you and your family the best. God bless.


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By Suzie (Guest Post)
April 1, 20050 found this helpful

You should read "The Complete Tightwad Gazette" by Amy Daczycin from cover to cover. It has excellent tips and it's very well written and not at all boring. I was able to save an incredible amount of money when my husband was laid off for two years. Another thing to think about is how you can reduce your expenses each month instead of how to make more money to pay off bills. You'd be surprised how much easier it is to get rid of things like cable, internet access for a fee, cell phones, voicemail, video rentals (use the library), magazine subscriptions, daily latte, prepared foods, expensive snacks, eating out...etc. The number one way to quickly reduce your "output" monthly is FOOD. A lot of people spend way too much on food each month and by tackling that first you'll save a lot. It all adds up. Good luck.

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By Suzie (Guest Post)
April 1, 20050 found this helpful

Go to and answer some questions and it will do a search and give you a list of "aid" that you qualify for. It's all free.

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April 1, 20050 found this helpful

Thank you all so much for your feed back. It lifts my spirits to know you took the time to give advice. I will get the tightwad gazette from the library and go to I already have a trial version of aol for a couple of months. Cell phones and direct tv are under contract. Any suggestions on how to get out of cell phone and satelite tv contracts? I really need to learn how to make nutritious meals on as little money a week as possible. My goal is 50 a week for our family of 4. I drive 72 miles one way to work and that makes gas at $30.00 every two days. I earn too much for food stamps as suggested in one of the feedbacks. If we didn't have so many bills my income would be great! I know it is all our fault but damage is done and I must deal with it. Thank you all again for taking time to help with your advice. I will keep looking for your post and will follow your advice and encouragement.
God Bless

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By Cindy (Guest Post)
April 2, 20050 found this helpful

I feel for you honey. A lot of wireless companies
will tell you what their cancellation fee is if you call
them and ask. Even if it is $125.00 it is still better
than paying $40.00 a month for another full year
of however long you contract is for. If its only for
a month or two then hang on and then cancel without
the fees.

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September 19, 20070 found this helpful

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

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By 0 found this helpful
June 3, 2010

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

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By 0 found this helpful
April 13, 2014

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.

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October 28, 20120 found this helpful

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.

By Cheryl

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By 0 found this helpful
August 20, 2009

I cannot keep paying this credit card at 39%, what can I do?

By Joseph from Las Vegas, NV

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By 0 found this helpful
December 29, 2010

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

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By 0 found this helpful
May 25, 2012

How to become a debt free?

By Roager F

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ThriftyFun is one of the longest running frugal living communities on the Internet. These are archives of older discussions.

June 3, 20100 found this helpful

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.

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