Surviving without Credit Cards

Getting rid of all of your credit cards is one of the strongest messages you get when you are trying to get out of debt. The reason is that credit cards allow us to spend more money that we should, essentially taking out a loan at a very high interest rate that compounds and compounds and can easily get out of control. In previous generations, it would take a lot for someone to consider going in to debt for even something as substantial to quality of living as a house. Once credit cards came along, people were willing to go … Continue reading →

The Two Ways to Pay Off Debt

When it comes to paying off debt, there are two ways to approach it. The basic rule for paying off debt is to apply extra payments to reduce the amount that you owe and to reduce the expenses that you are incurring in interest. The more principal that you pay, the less interest that you will owe. This is the real secret of paying off debt; keeping more money in your pocket. If you only have one bill or bit of debt, then the process is easy: simply pay as much as you can toward that debt. But, most of … Continue reading →

Getting Out of Debt: Does That Extra Payment Go to the Principal or the Interest?

There is only one way to get out of debt on a loan: pay down the principal of it. Are those extra payments you are making actually going toward the principal of the loan or toward the interest or next payment. It is important to know the difference, or you may not making as big a dent in your loan as you think. What Is Principal Versus Interest? When you take out a loan the specific amount of the loan is the principal. Whether this is a $300,000 mortgage or a $2,000 student loan makes no difference. When you use … Continue reading →

Getting Out of Debt: Living Like No One Else

One of the things that we heard over and over again taking the Dave Ramsey Financial Freedom course was that we needed to “Live like no one else so we could live like no one else.” In fact, I think this was the slogan for the course. What this means is that we have to be prepared to not only live frugally, but to make sacrifices in many areas and manage our money well, things that most of us, as Americans don’t tend to do. By sacrificing now, we could then live without debt later and be in a position … Continue reading →

Getting Out of Debt: Messy Organization Cost Us

Purposefully trying to get out of debt is revealing some pretty interesting things. It is amazing how despite practicing frugal living, we’ve thrown money away from being poor organizers of it. Call it having too much to do or the control freak of the family (me) turning a blind eye to certain areas of our bills, but this month we’ve definitely been seeing how not paying close attention to some things has affected our budget. Case in point: we got a letter from our oil company saying that they were raising our oil rate, so our monthly bill for the … Continue reading →

Friends Don’t Let Friends Have Debt

Like a new convert, I want everyone to get out of debt. The problem is that just like an after school special (remember those “don’t do drugs” campaigns), not too many people take me seriously. We live in a society where debt is expected, so anyone who claims otherwise can be seen like a nut. Of course, I am probably way too enthusiastic for most people, charging in to pick up my kids at a church activity and announcing, “Hey, run down to the Giant (grocery store) and do this deal to get free greeting cards!” or pointing out to … Continue reading →

Getting Out of Debt: A New Attitude

The idea of completely getting out of debt takes some getting used to. After all, most of us “need” to carry mortgages and car payments. If we want to go to college, we have to take out loans. Many of us struggle with credit card debt just to cover the necessities. As a family, we made a decision that we wouldn’t carry any debt that wasn’t necessary. Now, after Financial Peace University, we have learned that no debt is really necessary. That is quite an adjustment. I look around at all of the things that we would like to have, … Continue reading →

Getting Out of Debt: Paying Off the Car

I really can’t believe that we are going to do this. Several weeks ago, we just assumed that we had to have a car payment. When our youngest child was born, a larger car was a practical necessity because three car seats wouldn’t fit across the back of our old car. So we made a purchase and wound up with car payments. We do love this car. It has given us minimal trouble and maximum flexibility for our family. We don’t love having the car payment or paying the almost $50 a month in interest on the loan. But as … Continue reading →

Getting Out of Debt: Extreme Couponing

My husband thinks I am obsessed with extreme couponing. I admit that I never actually saw the Extreme Couponing show. Nevertheless, I have been a crazy coupon lady, clipping grocery coupons and getting the best deals on groceries that I can find. I’ve always believed in coupons, but my dedication to using them had fallen off and become sporadic. I needed the focus of getting out of debt to really step up my game in order to reduce our grocery bill even more and to get out of debt. My goal is to actually come under the amount that we … Continue reading →

Getting Out of Debt: How Did We Do?

Our goal in 2011 is to get out of debt and start building wealth. We have been taking Dave Ramsey’s Financial Freedom course and have been really motivated to be more purposeful with our money. If you have been following our adventure so far, you know about the ups and downs that we have been facing, from unexpected expenses to accounting groceries down to the penny. march was our first full month working with a zero-based budget, and I am happy to say that not only did we get through it but we actually spent less in some areas than … Continue reading →