Friday, October 24, 2008

Credit Card Debt Free

I just did something that I've looked forward to for a long, long time. I paid off our last credit card. You can easily notice from my blog entries that I have never written about finances, especially from my personal experience, but I thought maybe I should tell some of our story in case it helps someone else that stumbles across this post, or at least make them know they are not alone. The beginning of our credit card debt was somewhere around 1996. It was a time that our son was still very young and I was getting ready to have our first daughter. I didn't want to wait until I could afford certain things and I fell right into the trap of our spend, spend, spend society. I spent a lot of time at the mall and going out to eat, and sadly I don't even remember most of the things we charged. The trap of the credit card is that once the balances were high and we were making payments, when an emergency came up we didn't have the money to pay for it. For instance, we literally had 2 cars at once that needed repair, so we charged it. The kids had pretty nice wardrobes that I always felt justified charging since it wasn't something I was spending on myself. I thought the kids deserved it. Of course, there had to have been some purchases just for me or Jay because I thought we deserved it. I guess I thought we deserved paying for the interest that built up for years, too. Currently most of the information I hear and read says not to go to a credit counselor because it can be just as damaging as filing bankruptcy. This is not true of the company that we used, which was Auriton Solutions. They were able to get all of our interest rates lowered and the program did not harm our credit at all. As a matter of fact, we bought our house in Oklahoma and two cars during the time we were on the program with decent interest rates. Auriton did not reduce the amount of debt we had and we didn't try to get out of how much we owed. We spent that money and we wanted to pay for it. I don't like hearing about companies and lawyers that help people get out of what they owe (especially rich people who owe taxes on those Fox News commercials). We took responsibility for what we did, stopped charging, and paid for our debt. I don't have any special tips or secrets about getting out of debt. It wasn't a fast or easy process. There are a couple of books that I read and liked, The Average Family's Guide to Financial Freedom by Bill and Mary Toohey, and You're Broke Because You Want To Be by Larry Winget. Honestly, I didn't follow all of the guidelines in these books, it's just that occasionlly I need to read something that motivates me not to blow money on clothes, food, etc., etc. I also don't hate credit card companies. It was a genius idea for whoever created it. I still make purchases on one credit card occasionally and then pay it right back off because it is good for your credit score, or so I've read. As for the plan now and for the future, we are never, ever going to buy anything on credit again (excluding vehicles and houses) unless absolutely necessary!! I would rather sit in camping chairs than buy furniture on credit. By the way, we did exactly that the first 6 months we lived here. We waited until we had the money to buy a couple of recliners. Now we need to get the motorcycle and Jeep paid off and save up for a house. We don't want to buy a house with no money down like we did in Oklahoma. The town is building a couple of different neighborhoods of deed-restricted housing, and the location we are interested in won't be completed until at least 2010.

We have a fun financial plan right now toward our Torrance, CA/Disneyland trip in April 2009. We decided on an amount of money that we needed to save for the trip, divided by the number of months until then, and started saving for it.

I wouldn't say we are frugal, but finally living within our means. It is a good feeling.

1 comment:

julie said...

This is very helpful information, Lisa! I am so happy that you guys had a positive experience and success in eliminating debt. It is such a trap. And, you all seem to have a wonderful time being able to get out and do relatively inexpensive adventurous things around Telluride.

We went to Disneyland in CA and had a very nice time. I preferred it to the giant place in Florida, and I also wanted to relive my own childhood visit there. Thoroughly enjoyed it! We also did Universal Studios in LA.