Miss Money Bee Writer Tells You how She Became Debt Free
Back in 2007 spending money wasn’t an issue in my life. If I spent too much, I could get a second job or borrow money from my parents. At the time the economy was booming and it seemed that the only requirements to succeed were hard work and education.
Once the economic crisis began, I continued spending money as usual. The economic crisis didn’t seem to have an impact on me, so I kept using my credit cards to pay for expensive dinners and clothes. I didn’t see how broke I was until my credit card was declined at a shoe store. As the cashier handed me the card, I realized my financial situation had reached its limit. As I drove home without my $200-shoes, I felt so frustrated that I spent three hours analyzing my finances. Turns out I owed thousands of dollars in credit card debt and I didn’t have a stable income to pay them off.
Like many other Americans, I had to sacrifice my savings and adhere to a strict budget to pay off my credit card debt. After seeing my savings decrease significantly, I learned to be more cautious with my spending and I decided I wasn’t going to have debt ever again. Instead of following my buying impulses, I concentrated on considering each purchase.
Here are the strategies I followed to get out of debt:
Control stress and anxiety: Many people like to go on spending sprees when they are depressed or anxious. One strategy to help become a disciplined saver is to look at long-term goals. For example, think about whether it is more important to satisfy a fleeting emotion or to be debt-free in the future? Think of real goals when feeling weak.
Do I need this item or do I want it? Making the distinction between “wanting” and “needing” is surprisingly difficult. You want a new pair of jeans and they are on sale, but just think about how often you will wear them. Also, follow the “I can live without it rule.” Every time you see a pair of jeans or purse that you love, ask yourself: Do I have other jeans or purses that could be worn in place of the new item? If the answer is yes, DON’T BUY IT!
Acknowledge debt: In order to solve a problem, it’s necessary to acknowledge that something is wrong. Even though confronting debt is scary, hiding won’t solve the problem. Talking to family members and financial counselors can make this process easier to overcome.
Build a safety net: During tough economic times it’s important to build a strong financial framework to be prepared for emergencies. The key to building a six-month emergency fund is to cut down on unnecessary spending. Skip the morning coffee, bring lunch to work, forget the Saturday night restaurant trips, stay home and read a book instead of going to the movies. Believe me, the small things add up!
Controlling my spending in a consumerist society wasn’t easy. Many times I had to skip dinner at restaurants or return clothes I couldn’t afford. But all the hard work paid off, and today I’m debt free. More importantly I learned how to manage my finances and live within my means. After joining Consolidated Credit’s team, I was able to continue learning about finances. My favorite part of this job is helping others with the same struggles I experienced.