Times are tight. With the dollar inflating, gas prices temporarily going down (but having been higher than they have been in a long time) and the cost of food going up, people who have been living near the edge are finding themselves digging a deep hole as they attempt to live “the American dream”.
The problem is that the American dream was never supposed to be lived with someone else’s money((Be it the government’s or the creditors.)) At one point in our history, we lived off the money we had, and not off of credit. But credit is so easy to get today that we can easily find ourselves in a hole with no end in sight.
Fortunately there are many people looking to help you get out. I’ve spent some time blogging on Dave Ramsey’s baby steps and my quest to be debt free. Praise God I am except for the house.
Others try to provide Debt Relief with different services they offer, like credit counseling, debt consolidation or giving a person a plan after negotiating with creditors.
The important thing is that you make up your mind that you’re not going to be in debt, you stop using those cards and start paying in cash, and you won’t believe the feeling of actually owning something instead of paying on something.
Now’s a great time to break your dependence on credit, to get out of the hole you’re in, and to see that you really do have enough money and things aren’t as tight as they seem.
We’re on the move to pay off debt. We use cash for everything except the bills we pay through our online banking.
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Posted by Colleen | August 8, 2008, 8:08 am@Colleen: That’s pretty much how we do it. We have a zero-sum budget, so we spend all of our money on paper before we even get a paycheck. Though I will admit that keeping money in an account makes it look like we have extra money.
Posted by MInTheGap | August 8, 2008, 9:23 amWe put everything on our credit card to get the benefits (airline miles, cash back, etc.) but we pay it off every month. One thing that helps us stay in budget is mint.com. You plug in your budget and it downloads your transactions and categorizes them for you, so you are able to keep track of where you are doing your spending. We’re really good at not overspending (which can be so easy putting everything on a credit card) but this was an extra tool that really keeps us in check.
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Posted by Rachel | August 8, 2008, 1:37 pm@Rachel: I found that credit was an enabler for me to spend more than I had, so even having a checking account with money in it that I know is available can be a bad thing. That being said, I don’t have a problem if someone can stay disciplined. The problem usually doesn’t happen when times are good, but when they’re bad.
Best to have a good emergency fund even if you’re paying things off monthly.
As for programs, we’re pretty decent at using Quicken, though remembering to get a receipt and enter it in Quicken can be tough. We’re always off by at least a little.
Posted by MInTheGap | August 8, 2008, 1:53 pmCongrats on being debt free (except the house)! I am a big ramsey fan and think everyone should read his book.
I also agree with him that most people (almost everyone) should avoid debt consolidation since 75% of people who do it end up worse off after a couple years… I think it should be something that is prayerfully considered, not a reflex action…
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Posted by ChristianPF | August 8, 2008, 2:57 pm@ChristianPF: You’re right. It’s better to avoid debt consolidation if you can. Even negotiating with creditors is probably better than that. And bankruptcy I would void at all costs.
Posted by MInTheGap | August 8, 2008, 3:04 pm