On February 6, 2006, I made the final debt reduction payment and finished paying off all of my debt. Since then, I’ve been living debt free.
I do not make monthly payments to creditors.
I do not pay interest to credit card companies.
I am free to do what I want to do, when I want to do it, with my money. Life is good.
I loathe the thought of paying interest. I spent 15 years of my life paying interest – on cars, trucks, furniture, appliances, clothes, food, and dozens of other silly things. Now, however, if I don’t have the money to pay for an item, well, I just don’t buy that item. I have to wait until I can actually afford it and then I buy it, with cash.
(This is a novel concept, I realize, and one that has been soundly rejected by both our federal government and both major political parties, but I digress.)
Do you want to save some real money? Then, get out of debt (especially credit card debt), learn to live debt free (with a long-term plan for remaining debt free), and stop borrowing money (and paying interest).
Now, there are those who will reject my idea of paying cash and they will extol the virtues of credit cards, with low interest rates, and the power of using other people’s money. Hey, I’m cool. If others want to borrow money, that’s fine by me, but I don’t want to use other people’s money, I want to use my own. And yes, I am aware of the thirty-day float afforded to those who use credit cards… and the five percent back that you can get with each transaction… and the security features. I still don’t like them, I don’t want to use them, and I’m convinced that most people spend more when using a credit card than they would if they had to live on a cash only budget (with no wiggle-room for going over). I am very open to the idea that I am wrong, and I know that many of my personal finance blogging brothers and sisters love their credit cards, but I’m just not going to use them. (Not to belabor the point, but let me say this. With credit cards, I was in debt, I was paying interest, I lived month-to-month, and I was fiscally irresponsible. Without them, I’m debt free, I’m funding 5 retirement accounts, 3 education savings accounts, and I have six months’ worth of expenses saved in the bank. I think I’ll stick with what’s working for me.)
If, however, you must use a credit card, please, pay if off in full at the end of each month. Credit card interest rates can be very high and credit card companies are constantly looking for ways to improve their bottom lines. Be careful. Make your payments on time, always open notice letters from your creditors, and keep tabs on your interest rates. Credit card companies are constantly changing their policies and procedures!
If you click any of the links in this article, you will be directed to other articles about how I got out of debt and how I live debt free.
Click here to view all of the articles in the Top 10 Ways To Save Money series. Rock on.