Having excessive credit card debt is a heavy burden on the shoulders of any person. I have personally been up to my neck in plastic debt, and was steadily digging my hole deeper. At the age of eighteen, I applied for my first credit card, not heeding the advice from my elders on what I could end up doing to my finances and credit if I wasn’t careful. After five years of piling up cards, I eventually had seven, yes seven, credit cards at the age of 23. It wasn’t until last year that I decided enough was enough.
I realized that more important bills were falling behind as I tried to stay caught up on card payments, and there was also the realization that I paid over $500 a month in payments on material purchases that I didn’t even remember. This wasn’t good enough anymore!
With the help of a clear understanding that I wanted to be debt free, an understanding wife, and a plan, I have slowly started to diminish my credit card debt. There’s been a few sacrifices and a couple sad faces from pushing away my wants, but its really paying off! I’m now down to four credit cards and still shrinking. As you can tell, I’m still in the process, but I’d say that three cards paid off in four months time is pretty good! I am going to share a few tips with you, that personally helped me shrink my debt and is still working for me to this very day.
Create a monthly budget for your money!
Creating a budget does numerous things for your finances. It helps you discover where your money has been going, which is vital in saving and paying off debt. There’s no doubt that the fast food money could be better spent paying down that Visa balance instead of buying the cheeseburger that you won’t remember in a hour. I use my budget to divide my money into several categories. Those are credit cards, auto expenses (loan, insurance, gas), recurring home bills (phone, electric, rent, cable, etc), groceries, savings, and an entertainment fund. I believe we need an entertainment fund to keep us from going crazy, just try to keep it tame and know where your priorities lie. It is hard to stick to a plan, but if you do it for a month I promise that you will see changes. Changes in your self, your finances, and your life. It always feels great having more money at the end of the month.
Save when you get the chance!
After you have stuck with your budget and paid everything that should come first, save what’s left over! There’s no better feeling than seeing your account grow. In order to save, useless spending has to stop. That’s what your budget should do, and if it includes an entertainment fund, then there’s no reason to save the rest since you have had your fun anyway, right? Saving money can save you as well. In times of emergency, such as unexpected hospital visits, major car repairs, or home repairs, don’t you think it would feel great to have the peace of mind that you have some money saved, instead of borrowing even more and digging that debt hole even deeper? Save, save, save. I even save my change and any change I find! It may sound crazy, but in a given month I’ve saved anywhere between $50-$110 from throwing it all in a milk jug. Pennies are still worth something, even if they don’t seem like it!
It may seem obvious, but for many it isn’t. For some it’s a habit to turn to plastic or banks for loans, and it’s time to stop. I would know, there was a period of time when I paid for debt with debt, transferring balances from one card to the other, only to put it back on and add up more. When you stop borrowing, the cycle ends. Use what you have to pay what you owe. Yes, even if you have to prioritize your bills, only use money that you won’t have to pay back. Stop the vicious cycle of high interest rates and poor credit, and do yourself a favor by not borrowing anymore money! Your wallet will thank you later.
If I can start the process of getting out of credit card debt, believe me anyone can! Since I’ve implemented these few simple strategies into my financial life, they have helped in other areas as well. I have less stress, a less clouded mind, I am noticeably happier, and I have a savings account that is growing while credit cards are shrinking. I still have a little ways to go before I can say I’m completely debt free, but just getting started feels amazing. My marriage is strong, and my family is better taken care off since slashing the plastic payments in nearly half and setting a budget. You can do it to, just stay motivated and focused. The reward is greater than you can imagine!