The past few days have been amazing. The No Credit Needed Blog and the No Credit Needed Network were recently mentioned in a N.Y. Times article about debt blogs. The article, written by John Leland of the N.Y. Times, has been picked up by several other news organizations, and both sites have been getting hits from around the world. Here’s just a brief list of the publications in which the article has appeared:

N.Y. Times

CNET News.Com

Wilmington, N.C. Star

International Herald Tribune

Seattle Times

ZD Net India

Spartanburg, S.C.

Alabama Times Daily

The News Tribune Tacoma, WA

Worcester Telegram

Austin American-Statesman

You get the picture! It’s been really cool to get emails and comments from brand new visitors and long time readers. I’d also like to take a second to mention the other awesome blogs mentioned in the article:

Blogging Away Debt (A member of the NCN Network!)

Poorer Than You

Save Leigh Ann

We’re In Debt

Defying Debt

Make Love, Not Debt

No Credit Needed Network

Thanks for stopping by and I hope you’ll take some time to read the archives or leave a comment.

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I’d like to thank those of you who have clicked over from the N.Y. Times. John Leland recently interviewed me for an article about debt reduction blogs, and the article was published today! (Debtors Search For Discipline Via Blogs)

My archives are located at the left-hand side of this page. A brief summary of my progress from April of 2005 to February of 2007 can be found here.

Also mentioned in the article was the No Credit Needed Network. The NCN Network brings together bloggers from all over the world, united in a desire to get out of debt and save money. Currently, over 60 bloggers have posted their personal finance related progress charts. Click the link and check out some amazing progress!

I also have a podcast about debt reduction and a brand new weight loss blog. You can find more information about these projects here: No Credit Needed Podcast and here: No. Calories Needed.

Thanks for stopping by. If you would like to contact me, click the contact tab at the top of this page, or leave a comment on any post.

Click here to subscribe to No Credit Needed.

I’d like to take a second and thank John Leland for the interview and the article.

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If you want to get out of debt (and stay out of debt) pay close attention to the following:

1. Try not to tackle every debt at one time. Focus on a specific debt or debt category, and put all of your energy and extra income towards paying off that particular debt. (Of course, always pay your minimums!) Don’t be a spotlight, be a laser. By focusing on one debt, you will reap the psychological rewards of seeing substantial progress.

2. Do not cancel your credit card if it still has a balance. While I do not use credit cards, I waited until after I was finished paying my balances in full before I canceled my credit card accounts. Why? If you close an account before you pay your balance, you have no leverage with the credit card company. Why should they work with you if you are no longer a customer. Wait until the balance has been paid and then cancel the cards.

3. Do not build your debt reduction plan around unrealistic expectations. If you have never been on a budget, don’t expect to have a “perfect” month right off the bat. Realize that it takes time to change behaviors, attitudes, and habits. Create a realistic plan.

4. Try not to skimp on the emergency fund. I’m a big fan of having a “baby emergency fund” of at least $1000 in my savings account at all times. If you are going to get out of debt, you will be VERY tempted to empty out your cash savings and put every single available penny towards debt reduction. Resist this very powerful (and very real) temptation. Why? Just as soon as you empty that emergency fund for debt reduction, an unexpected expense will arise, and you’ll have to borrow money to pay for it. Instead, use your emergency fund for true emergencies, build it back up, and then continue with your debt reduction. It’s better to miss your goal date by a few months (like I did) than to live life without some emergency cash.

5. Do not listen to a thousand different voices saying a thousand different things about YOUR plan. This one may sound strange coming from a guy who writes about personal finance, but be careful about to whom you listen. The only person who can truly understand you is YOU. I used Dave Ramsey’s Snowball Method, and paid my debts smallest balance to largest balance. Others use a method whereby you pay your debts highest interest to lowest interest. Still others use a combination of the two. Whichever plan you adopt, or if you come up with your own plan, be faithful to yourself. Do what you know you will do! (This is NOT to say that you shouldn’t listen to SOME advice, but be smart about it. Not every personal finance book fits your particular situation. I had a friend who has 100,000 dollars in credit card debt try to tell ME how to manage my finances. I listened to what he had to say, nodded politely, and then changed the subject!)

6. Never allow your credit card company access to your savings or checking account. While I am sure that all credit card companies are honest and above aboard… ahem… I would never allow them to withdraw funds directly from my bank accounts. Instead, use online bill pay provided by your bank or send in a check to pay your bills.

7. Avoid using a second mortgage to consolidate automobile or credit card debt. Before you use any company to consolidate your debt, read the fine print! Personally, I find that most people who move debt from a credit card to a mortgage, without changing their behavior, end up with mortgage debt AND additional credit card debt. Plus, who wants to risk their home for the sake of paying off unsecured credit card debt?

8. Try not to make major purchases while you are getting out of debt. In some cases, making a major purchase in unavoidable. If the washing machine dies, it has to be replaced. But, one of the worst mistakes that you can make is to pay off one or two credit cards, get a little breathing room, and then go buy that television set, new car, or lawnmower that you’ve been wanting. Wait until you are debt free and THEN reward yourself by buying something nice. (I would almost guarantee, however, that once you get out of debt, the LAST thing you will want to do is go out and spend a lot of money. I spend LESS money now that I am debt free than I ever spent when I was in debt!)

9. Don’t argue with your spouse about money. It’s just not worth it. I’m very blessed to have a wife who has been “on board” throughout this whole process. I will confess, however, that we would have been debt free a month or two sooner had she been as crazy dedicated as I was to the plan. Once we created a budget, I never once criticized her for the purchases she made. There were things that she purchased that I would not have purchased, but I was so thankful for her love and support, I kept my mouth shut.

10. Never think that you are stuck with the life that you have right now. I find it amazing the number of people who don’t think they can do anything about their jobs, their health, their finances, or their futures. If you want a better life, you must choose a better life. Read a book. Write a resume. Find a church. Join a support group. Create a plan. If you are frustrated and feel like there is no hope, wake up! You can have an awesome life. Stop feeling sorry for yourself, stop worrying about your past, stop blaming yourself and others, stop making excuses, get up, get out, get going, and get a life! You can ROCK!

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Lifehacker.com recently linked to my post about not using Credit Cards. Well, I was checking out my “web stats” today, and the same article has been linked to, and republished, in RUSSIAN. Capitalism Rocks! If you are reading this post, and you’ve come from the .ru site, please, let me know by leaving a comment!
I went to Babelfish.com and here’s the “translation” of my original post, from Russion, back to English. It’s awesome!

Blogger, known under the net pseudonym NCN, on site No credit Needed (http://www.ncnblog.com/) published the detailed list of reasons, why it does not use the credit maps (http://www.ncnblog.com/2007/01/18/i-to-note- whisker -credit-cards/). NCN it wrote:

“YA did not use the credit card of more than two years and I will so act as long as it will not arise situation which it will force to use banknote. (one active credit calculation in me still exists, but I hold card in the most distant department of its wallet; it is not confident, that it still works, but to explain this thus far I do not be going). 4 I do not recommend to shut credit calculations. I have similar and it in a good state, 4 simply it I do not use. So that however, I understood in a question NOT of use by my credit of karty?̶y;

Among conclusions NCN it is possible to isolate similar:

- to expend available is morally more complex than to use banknote.
- if we do not use credit map, then not it will be and calculations.
- you do not drive in to yourselves head by problems about absent CashBack bonusakh.
- instead of the credit map always it is possible to use debit (including the cases of taking for the rental of machine or armoring of number in the hotel).

After foregoing the use of a personal credit map, 4 also it did not test special difficulties. In many respects, certainly, helped debit map. In me so there are several business credit maps, but with their critical use of problems it does not appear - business is a business and it is absolutely isolated from my personal life.

Now, already having the clear concepts about conducting of the personal of finances, I can allow recovery to the use of credit maps. However there it was, but I solved for itself, that bonusy from the use of banknotes were minimum, and risks were high. Now I is free from the oppression of credit maps and be proud of this.

I think that the retranslated version is better than the original. “Now I is free from the oppression…” To my new Russian readers, Welcome!

Much love to Get Rich Slowly for doing a post about my post which led to this post…

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Here’s a quick tip that will help you get out of debt or increase your savings without worrying if you will have enough money to last until your next paycheck. Instead of sending ALL of your extra debt payment at one time, send multiple debt payments throughout the month. I used this technique when I was getting out of debt, and I had great success with it. Let me show you an example.

Suppose you have the following monthly minimum debt payments:

Automobile Payment: 500

Credit Card Payment: 100

Personal Loan Payment: 200

Every month, you are already committed to paying a minimum of 800 dollars towards your debt. Now, let’s assume that you have decided that you can afford to send 200 dollars extra towards your credit card payment. You have a choice to make. Will you send a single 300 dollar payment to your credit card company, or will you send a 100 dollar payment to cover the minimum, and then send a 200 dollar payment (later in the month) as your extra payment? Most people who decide to get out of debt will send the single 300 dollar payment, and if that works for you, awesome! But, others will send the minimum payment, and promise themselves that they will “save” 200 dollars during the month, and send it in later. Inevitably, “life happens” and you fail to save the 200 dollars, so you do not make any extra progress towards debt reduction. I came up with a “compromise” solution. If you are worried that you cannot “afford” to send the entire 200 at one time, but you know that you have a history of not “saving” the extra 200 dollars, try the following. Send MULTIPLE, smaller, extra payments. Instead of sending 200 dollars at the first of the month, send 50 dollars per week for an entire month. Or, send 25 dollars every 3 or 4 days. You can use online bill pay to send multiple monthly payments. (Do NOT use this method if you are sending stamped mail, for obvious reasons.) One of the added benefits of this technique? If something comes “up” during the month, you can suspend your extra payments for a week or two, and then restart them once you’re past the temporary setback. Another benefit? You get to see some progress, almost every week, and it will keep you motivated. Plus, and this was something pretty awesome that I found happening over and over as I moved toward debt freedom, you will find yourself sending in MORE money every month than you first anticipated. Think of it like this: If you budget 200 extra, and you send in 200 extra, then you will more than likely SPEND any additional money that might be freed up during the month. But, if you are sending in multiple smaller amounts, you will be more likely to apply and additional money towards extra debt repayment. Your 200 might become 225, or 250, or even 300.

Try it out, and let me know how it works for you. (I went really crazy at one point, and I was sending Citibank 5 dollars a DAY! I forced myself to find someway to make 5 “extra” dollars a day so that I could send in extra debt payments.)

One last thing: You can actually combine the full extra payment and the smaller extra payments. In the example above, you could send in the full 300 at the first of the month, and then send in smaller amounts during the month as additional money is earned or freed up. I used this combo technique when I was saving up my emergency fund. (I’d send in my budgeted amount at the first of the month, and then send in smaller amounts throughout the rest of the month. Many people do this with SAVINGS accounts, but you can also do this with CREDIT accounts.)

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