Category Archive: Anti-Credit Articles

Do Not Wait Until January 1st To Make Your Financial Resolutions

As I mentioned in a related post, over at No. Calories Needed, about weight loss and resolutions, Thanksgiving will be here in 21 days – and Christmas is just 49 days away.  2008 has just flown by, and 2009 will be here very soon.

Let me urge you – Please don’t wait until January 1st to get your financial house in order.  You do not need, especially in these strange economic times, to rack up a mountain of credit card debt, just to buy gifts!  Please, don’t limp through Christmas, without a budget, promising yourself that you’ll “fix it all come January.”  Instead, make your resolution today!

November is less than a week old.  You still have time to create a budget for this month.  List your income, list your expenses, and see where you are.  Take your time and be realistic.  I’ve written several articles about budgeting, including –

If you have credit card debt, don’t add to it during December!  Instead, consider a No Credit Christmas and check out my ideas for inexpensive, awesome Christmas presents.  I know that you want to give nice gifts to your friends and family members, but if you can’t afford them, you just can’t afford them.  Do not go into debt in order to “keep up”.  Remember, we are working to change our futures, and this means that, from time to time, we must make sacrifices.  Plus, imagine how much better January will be if you don’t have to pay for December (or November, September, August…)

Today is your day.  You are in charge of you – and your destiny.  Don’t wait one more second to take care of yourself, and your family.  That’s what focusing on my weight loss and health is teaching me.  At first, I felt selfish about going to the gym and missing some time with my wife and kids.  Now, however, I realize that I HAVE to focus, on me, for a while, so that, in the long run, I can be a BETTER father and husband.  The same holds true when it comes to financial management.  Unless you take the time to focus on YOUR situation, you’ll never be able to focus, completely, on helping others.

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How I Live Without Borrowing Money

As the credit crunch continues, more and more people are learning to adjust to life without credit.  It’s been four years since I borrowed money or used a credit card.  Here’s how I live without borrowing money.

Budget -

I live on a budget.  My wife and I receive monthly paychecks and I receive irregular income from various sources.  I use the You Need A Budget software to create my budget and track my spending.  As I create my monthly budget, I’m able to think about the coming month’s expenses, and plan accordingly.

Many people, when dealing with personal finances, feel anxious and frustrated.  Budgeting can help with these feelings, because a realistic budget helps to remove some of the what ifs and replaces them with actual realities.  When you create your budget, you may not like the numbers that you see, but, at the very least, you’ll know exactly with what you are dealing.

Learning to live on a budget can take time.  Be patient.  It took me almost six months to get things right.  Eventually, creating a budget will become second nature and you’ll actually look forward to sitting down with your bills and hammering out your monthly plan.  Seriously.  Trust me!

Plan -

Sure, my budget helps me get through the month, but also create short-term and long-term plans.  Remember, you’re learning to pay CASH for every thing.  That new washing machine?  You are going to pay cash.  That newer automobile?  You are going to pay cash.  College for the kids?  Yep, you are going to pay cash.  So, you need to plan, plan, plan.  (Note, when I use the term cash, I mean that you are going to pay for these things, up front, instead of borrowing money and paying for them later.  The actual method of payment might be cash, debit card, online bill pay, or check.)

I have several short-term plans (and goals).  Currently, we are saving to buy new furniture, a newer automobile, and new appliances.  But, I also have long-term plans (and goals), including buying a house for cash and paying for our three kids to go to college.  So, even though we are debt free, and could spend our money foolishly, our plans keep us honest and frugal.  In fact, we have less spending money, now, than we did when we were in debt, because so much of our savings are allocated to future purchases.  (Of course, the cool thing is, even though this money is allocated, on paper, for specific future purchases, we could, in the event of a real emergency or opportunity, use this money for anything we wanted.  That’s what’s great about having money in savings.  It’s ours, and we can use it as we wish.)

Sacrifice -

There are no shortcuts.  If you want to have enough money in the future, you have to sacrifice today.  If I bought every gizmo and gadget that I wanted (and could, at this point, afford), I would never achieve my long term goals.  Right now, we live in a house that is provided as part of my compensation.  We really want to buy our own home.  But, our real goal is to pay cash.  So, we make a house payment, to ourselves, each month.  Even though I could buy name brands, I still buy generic, because getting out of debt was just the first step of a very, very long journey.

Focus -

It’s never easy to go against the grain.  When everyone else is buying new cars and upgrading to the latest and greatest, it takes a certain inner strength to be content with what you already have.  As recent events have shown, however, most Americans (and most politicians) would do well to learn a little fiscal restraint.  So, the next time everyone in the office goes out for lunch, proudly produce your brown bag.  When the newest cell phone hits the market, be content with the one in your purse that still works just fine.  If you can’t afford your lifestyle, make the changes necessary to bring your expenses into line with your income.

Side Note:  I’ve been living without borrowing money for four years.  I’ve also avoided using credit cards.  If you choose to use credit cards, and many do, just remember to pay them off at the end of the month, so as to avoid those pesky interest payments.  As credit card companies look for more ways to make money, in tight times, I’m sure that they’ll get more and more aggressive with their fees and charges.  If you must use them, be careful!

If this article inspired or informed, please Stumble It and pass the word.  Thank you.

I’ve written about this subject before, and you might be interested in some of those articles.

Click to read –

How I Live Without Credit Cards

Life Without Credit Cards And The No Credit Needed Experiment

Edit:  I just reread this post, and I think I want to write a little more about combining the budget with short and long-term plans.  I’ll write about that in my next post.  If you haven’t done so, consider subscribing to No Credit Needed and you’ll receive all updates and new posts.

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Breaking The Addiction To Credit

Are you ready to get out of debt? Great! But, are you still using your credit cards, even while trying to pay them off? Boo! Here are some thoughts about breaking an addiction to credit –

Give Cash A Chance

Instead of using your credit card for everyday purchases, use cash. Try the envelope system and see how you do.

For three years, I’ve been using the envelope system, and I’ve seen a dramatic change in my personal finances. I do use a debit card from time to time, but I still like the power of good old cash money.

Many will say – “I spend more when I have cash” – but that’s only because they allow themselves the fall back position of using credit cards. Imagine the following: If someone were to offer you a million dollars, and, all you had to do was live a month without using your credit card, could you do it? Of course you could! Well, I don’t have a million dollars to offer you, but I did just prove my point. We can do what we want to do, if and when we really want to do it.

Get Away From Negative Influences -

Is your life filled with people who love to spend money? Are you surrounded by people who spend more than they save? Are you listening to bad advice? Are you sick and tired of imitating the poor habits of others?

It’s time to move away from people who are infatuated with stuff and move towards people who are serious about saving money.

Whether we realize it or not, we are influenced by the company that we keep. Find people who are enthusiastic and supportive. Avoid situations where you feel pressured to spend money.

You are not what you drive. You are what drives you.

You are not where you live. You are what lives in you.

Imagine A Better Future

Scenario One – You live paycheck-to-paycheck, always worried about how you are going to pay the next month’s bills.

Scenario Two – You have a savings cushion in the bank and you live your life, looking for opportunities to help others and bless your family.

Which scenario sounds better? Personally, I pick Scenario Two. While I’m not there yet, I’m doing everything that I know to do to improve my financial situation.

I had to break the cycle. For more than a decade, I lived under a cloud of debt. Now, I am debt free and I can plan for my future. I would encourage anyone, regardless of the amount of debt that they have, to break the addiction to credit. Live a more balanced, more focused life. Get rid of the extraneous things that you do not need and the people who drag you down. Focus on maximizing your income and reducing expenses. And, dream big dreams!

For those interested –

I have just recorded and released a new episode of the No Credit Needed Podcast and I am working on change number three over at 99 Changes.

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An Interesting Conversation About Store-Branded Credit Card Applications

Today, I went shopping for Mother’s Day gifts. As I was checking out at one particular store, the woman behind the cash register asked me if I wanted to apply for a credit card and receive a 10% discount. As I’ve written about before, I’m not interested in credit cards, especially high-rate store-branded credit cards. But, I’m also not interested in being a jerk, so I politely declined her offer. But, I couldn’t resist asking her if she ever tired of trying to get people to apply for the cards. She sighed and said yes. Then, she went on for about five minutes about how she and the other customer service people were required to produce a certain number of applications, every week, or they would be ‘written up’. Having worked in retail when I was in high school, I was familiar with that type of company policy. Apparently, her particular manager asks each CSR to get 2 credit applications, per week. I asked her what she thought about credit cards – in general. She cocked her head, slightly, and said – almost at a whisper –

“They tell us if we can get someone to sign up, and be approved, that we have guaranteed that that customer will shop at our store, on average, three times more often than they would have if they didn’t have a card with our store’s name on it.”

I hope those customer’s enjoyed their 10% discount.

(As a side note: I have no idea if what she said is true or not, but I am inclined to believe that part of the allure of the store-branded card is that it gives its owner a false-sense of belonging. Think about it. When you sign-up for the card, what type of process must you go through. Ah – an approval process. Interesting word, don’t you think?)

Cool thing about cash – no approval necessary. I don’t need a ‘cash’ score. And, I’m not paying for my shirt, three years after it went out of style, at 23% interest.

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