Debt Free | No Credit Needed

My Story

Archive for the ‘Debt Free’ Category

How To Stay Out Of Debt

September 24th, 2009

NCN

1. Live on a budget and plan for future purchases.

If you are going to live without borrowing money, you will need to save for future purchases. Saving for automobiles, furniture, and appliances requires a lot of discipline and a lot of planning. The debt free life is awesome, but it does require that you spend some time mapping out your financial future. We use the You Need A Budget software to manage our finances and I’m proud to have them as a long-time sponsor of this site.

2. Maintain adequate cash reserves.

Rainy day fund, emergency fund, freedom account – It goes by many names, but no matter what you call it, you’ll be glad you have it when life throws you a financial-curve ball. How much you’ll want to keep in savings will be determined by your particular situation. I keep enough money in my emergency fund to replace my income for six months.

3. Avoid lifestyle inflation.

Take this from someone who knows what he’s talking about – Once you get out of debt, you are going to feel very, very rich. You won’t be, but you’ll feel like it. For the first month or so, you’ll pay your bills, see just how much you still have in your checking account, and a big smile will come across you face. Enjoy it, because getting out of debt does, indeed, rock! Then, take a second – and realize that if you go crazy and spend all of that freed up cash, you’ll quickly find yourself right back in debt. Continue to follow your budget and live below your means.

4. Plan for your financial future.

Retirement. College. Yep. Now is a great time to really focus on saving for retirement and paying for kids’ college. This is not to say that we should wait until we are debt free to save for either, but being debt free does allow us to really amp up our contributions. Do some research and analyze your various options. Do you have a 401(k) through work? Do you have a Roth IRA? Have you considered an ESA or a 529 Plan? Take the time, educate yourself, and prepare for tomorrow.

5. Be smart with your credit cards.

If you use them – use them wisely. Pay your balance off each month and avoid carrying balances. Rock on.

This week I will be writing a series of Back to the Basics articles. I encourage you to subscribe to No Credit Needed via RSS or Email. Also, if you liked this article, please consider promoting it via the social network buttons below. Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

Posted in Basics, Debt Free

6 Comments »

Four Years Without A Car Payment

September 8th, 2009

NCN

I was sifting through some old paperwork today, and I stumbled across an old letter from our bank. It was dated September 8, 2005. I was pleased to see that it was a notice from our bank, informing us that our car loan had been paid-in-full. I smiled as I put the letter back in its place and then I went searching through the No Credit Needed Archives – for a quick trip down memory lane.

On August 29, 2005, I sent the final payment to our bank and paid off our car loan. It’s hard to believe, but it’s been four years since we’ve had a car payment. And to think, I used to be one of those folks who assumed that I would “always have a car payment.”

Instead of making car payments, I now make payments to myself. Each month, I put an amount equal to a car payment in our savings account. When and if we need to buy a newer car, we’ll do so out of our savings. Instead of going in to debt, and paying interest, we are able to remain debt free, and earn interest as we save.

A couple of years ago, we used this technique and purchased a new-to-us automobile, with cash. While it hurt to write a single check for such a substantial amount, it felt good to feel “in charge” of the car-buying experience. I didn’t have to worry about payments or interest rates. Instead, I was able to focus on price. As a cash buyer, I didn’t have to worry about being approved for a loan. I was able to find the car I wanted, negotiate from a position of strength, and rest assured, knowing that I had enough money to complete the deal.

Right now, I’m saving up to replace my old truck and my eight year old Honda. As I work toward these goals, I’m in no hurry. In fact, a mechanic buddy has my truck, right now, and is giving it a good tune up. Since I only use it to carry off the trash and do work around the yard, it might be another decade before it needs to be replaced. I keep the Honda serviced, and I’m hoping it will last me several more years, as well.

It is impossible to explain how good it feels to live without automobile payments. Sure, our cars are a little older and we have to be proactive in our planning, but all of our efforts are so worth it.

For those interested, you can click here to read about our debt reduction journey.

Posted in Automobiles, Debt Free, Debt Story

8 Comments »

Great News – My Parents Are Debt Free!

May 7th, 2009

NCN

I have some awesome news that I want to share with you guys.

My parents are debt free!

I just got off the phone with my Dad, and he was so excited. For more than two years, my Dad has been focused on paying off his mortgage. Month after month, he made his regular payments, and then used every, extra available dollar to reduce his principal. Today, he was able to walk into his credit union, hand them a check, and pay off his mortgage!

I cannot explain to you how happy I am for my Mom and my Dad. I asked Dad for permission to write a bit about their story, and he was happy to share with you guys. Basically, after reading some of the articles here at No Credit Needed, Dad decided to get out of debt and pay off his mortgage. After just a few months, he was able to rid himself of his consumer debt, and then he began to focus on ridding himself of a mortgage payment. Through hard work, sacrifice, and determination, he paid off a 15 year note in less than 7 years, with the majority of the payments coming in the past 2 years! How cool is that?!?

I love it when I hear about people who are debt free, even people that I don’t know. Can you imagine how cool it is for me to hear that my parents are debt free? I’m very close to my Mom and my Dad and I can’t wait to see what their debt free future holds for them.

For those thinking about debt reduction, consider reading – Debt Reduction 101 – and begin your journey towards being debt free.

Mom and Dad – you rock!

Posted in Debt Free, Debt Reduction, Family

13 Comments »

20 Things That Rock About Being Debt Free

January 3rd, 2009

NCN

I have been debt free for (almost) three years. The following is inspired by a conversation that I had recently with a good friend – a buddy of mine who has decided that now is the time to do something about his debt. I’m very proud of him, and I hope this post inspires him – and you!

1. I now live in the present, and not in the past.

2. I no longer worry about late fees, interest rate changes, interest payments, lost payments or finance charges.

3. I have peace of mind. If something were to happen to me, my wife would not have to worry about our finances.

4. I earn interest. I don’t pay interest. This feels awesome.

5. I am now acutely aware of the value of a dollar. In the past, if I could make payments, I could afford it. Now, if I can’t pay for it, I can’t afford it. This basic shift in thought has radically changed my life.

6. I no longer dread going to the mailbox.

7. I can afford to fund retirement accounts.

8. I can afford to fund education savings accounts.

9. I am free from the emotional baggage associated with debt. It’s impossible to adequately describe how good it feels to be debt free. Suffice to say, if I had known how awesome being debt free feels, I would have gotten out of debt a decade ago!

10. I can, hopefully, inspire and encourage others.

11. I am setting a much better example for my kids.

12. I am able to give more time and more money to those who are in need. There are only three things one can do with money – give, save, and spend. It feels good to save. It feels good to spend. It feels great to give.

13. I now know that I can establish a goal, push through difficult times, and change my life. These truths are helping me as I now focus on my health – losing weight and becoming a runner. I might has been replaced by I will.

14. I now make big plans. I have learned to dream of a better and brighter future for myself and my family.

15. I spend a little extra on nicer things for my wife. In the past, credit card debt crippled me. Now, with a proper budget and some forward thinking, I can actually plan for nicer things.

16. I can disregard every credit card application that comes my way.

17. I have found solid financial footing. With my debts eliminated and an emergency fund in place, I feel much more secure than I did three years ago. None of us knows what the future holds, but I feel much better now than I did then. Much better.

18. I can listen to my man Dave Ramsey and smile knowingly when callers scream “We’re Debt Free!”.

19. I have a deep respect for those who have paid off much more than I paid off – and for those who are still in the midst of their debt reduction journeys. I am amazed by some of the debt reduction stories that I have read over the past four years.

20. I can write this post. When I started No Credit Needed, I had one goal. I wanted to be debt free. It took 10 months, but I managed to pay off my last debt in February of 2006. Since then, I’ve done my best to be honest, open, and forthright about my struggle and my successes. I hope that this site blesses you as much as it has blessed me.

If you are ready to get out of debt – and start your own journey towards being debt free – may I suggest the following resources?

No Credit Needed Debt Reduction Guide

No Credit Needed Debt Reduction Free eBook

Debt Reduction 101

Posted in Debt Free, Debt Reduction, Motivation

39 Comments »

10 Things That Will Happen On The Road Between Being In Debt And Being Debt Free

October 29th, 2008

NCN

10. When you start your journey, you will be pumped! You will read books, listen to radio programs, subscribe to debt reduction blogs (hint, hint), and fill your mind with debt reduction strategies. After years of ignoring your debt, you will have had enough. With enthusiasm, you will create your own debt reduction plan. You will be ready.

9. As you move forward, you will learn to sacrifice. By giving up wants and focusing on needs you will be amazed by how just how much wasteful spending you had been doing. This will bum you out, just a bit, but you’ll be thrilled to see how much extra money you have. In these early days, you will put every single extra penny towards debt reduction. You will be on fire.

8. After a few months, you will really get the hang of it. Budgeting will become second nature, and you’ll really think about how you are spending your money. Instead of fighting with your spouse, you’ll learn to talk. As your balances shrink (much too slowly, you will think), you will begin to dream of life after debt.

7. Just as things are moving along nicely, you will have to deal with an unexpected emergency. Your baby will get sick. Your hours will get cut. Your washing machine will die. Something will happen. That’s why you need your emergency fund.

6. After the emergency has passed, you will struggle to find motivation. The enthusiasm with which you started out will no longer be there. Your goal date, which seemed so possible, will seem like fantasy, now that you’ve spent time (and money) dealing with the emergency. You will think about quitting.

5. Following some good self-talk, you will decide to press on with your debt reduction. Instead of wallowing in self-pity, you will remember why you started this in the first place. You wanted to be free. You wanted to save for retirement. You wanted to be a good example for your kids. You will plant a flag in the ground – and you will get back on track.

4. As you begin to rid yourself of your debts, you will find new ways to create income and save money. You will work harder than you have ever worked before and you will focus all of your energy on one, consuming goal. You will begin to hate your debts, in a way that you never thought possible. You will rock.

3. Near the end of your journey, you will see the finish line. Six months, five months, four months, three months… No matter where you are or what you are doing, you will be counting down the months, weeks, days, and even hours until you will be debt free.

2. After you make your final payment, you will rejoice. You will scream. You will shout. You will run around your house, jumping up and down, like a child on Christmas morning. You will be free, free, free.

1. Upon thinking about your journey, you will be thankful. You will be thankful for the lessons you learned. You will be proud, of yourself and your family, for the hard work and the sacrifice. You will have done something that very few people are willing to do. You will feel awesome.

Need a little help getting started? Check out my free Debt Reduction Guide (And E-Book)

Posted in Debt Free, Debt Reduction, Motivation

13 Comments »