Being Debt Free: Testimony

   For five years, I was in debt close to $10,000 and today, not only am I out of debt, I am building a savings account. The purpose of getting out of debt isn’t to just maintain, but to build. When my checkbook ledger used to hit $0, that meant I had $0. Now when my ledger hits $0, I still have $2000 in my account because that is my extra in case I need it. That money is in addition to my savings and investments and hopefully, this article will show you what worked for me. I understand not everything works for everybody, but I heard a statement once that I never forgot: “I can learn something from everybody, therefore, everybody is my teacher.”

1) Consolidate your debt! I had close to $10,000 in credit card debt and paying interest and over the limit fees every month and I decided I couldn’t do it. I got hooked up with a credit counseling service and they got me out of debt in 2 years. Creditors hammer you when you don’t pay and what starts off as a $500 limit ends up owing them over $2500. Credit counseling is humbling, but who cares if you are trying to get straightened out.

  2) Establish a budget! For every month of the year, I have an income column and a expense column. If your income column is lower than your expense column, you will incur debt every month. It is important that you cut your expense column so that your income is higher. Then when the budget is established, stick to it. If you set aside $200/month for groceries and week 4 comes and you have already spent $180, “Ramen-Noodle-It” for the last week. To stick to a budget takes character, but character gets you out of debt.

  3) Track your spending! Keep track for a month what you spend and you may notice you are spending money on things that aren’t even in your budget. You should know where your hard earned money is going. Keep track!

   I remember the day that I got out of debt! I felt free and realized that I could start saving. It is wrong and unethical to save money and at the same time, owe every credit card company and their mother. Be honest and pay your debts off and then start saving. When I was in debt, every day was a drudge. Being debt free brings a new level of excitement to such a short life.