*Tips to Become Debt Free

[DisneyaHolic23]

I was inspired by the thread in which everyone commits to reducing their personal debt. As I read, I became increasingly interested in secrets and tips for reducing debt.

What are the strategies you are employing??

 

[jodim]

Right now we are just cutting down on extras, like eating out (and the money I would have spent is going into the savings for our trip

I know when I dug us out of major debt a few years ago, the first thing we did was pick our smallest card, and pay it off.. then we went to the next in line, payed it off, and so on. (This is assuming you had cc debt)

I was constantly on the kids about keeping the lights off when not in use, fridge door closed, only running dishwasher/washing machine when full (neither are a problem now with 5 kids!), we went to dial-up, only basic cable, and basic phone services... we only ate out on kids eat free nights, and then only every 2 weeks.
We would do family nights and go bowling, skating or movies on the weeks we didn't eat out... and we would keep all our trips to a minimum. (Instead of driving to the store that is 20mins away two-three times a week, I only went once)

Can't remember what else, but those were our major cut-backs.

 

[tinah159]

This is my year to pay down our debt. We are not eating out as often and I am using the grocery game for coupon shopping. I will pay the smallest of my debts first and then snowball all the other payments. I am also renting out my rv to help pay for the expenses of owning it. I am really determined, but am sometimes a little overwhelmed.

 

[Crazoo]

Cutting out on eating out is the main one for me...

 

[mrsbornkuntry]

The first thing I did was sit down and write out a detailed budget to see where our money was going. Then we started cutting. We raised our insurance deductible (to an amt. we could still cover with savings if need be), I cancelled our cell phone and went to prepaid for emergencies, I had the kids look at their activities to see what they would cut so we would have one sport and one activity per kid. They worked with me looking for things we could do to make their things more affordable, such as selling outgrown scout uniforms on ebay to pay for new, cancelling a toontown subscription to help pay for bowling and we TRY not to have food at bowling and eat at home instead.

We sold our second car so when dh gets home we will share one.
I sell unused items on craigslist.
I use the library and look for free activities for the kids and I.
I participate in the "no buy" threads to make me more aware of how much I spend.

 

[mommyof3grlz]

To help eliminate our debt we rarely eat out. I pack snacks and water bottles to take to Karate and piano lessons. Planning ahead for times that we are away from home has helped us pass by McDs. Any extra/unexpected money that comes in goes directly to our debt snowball. Good luck!

 

[luv2nascar]

I just sold $75 worth of stuff on ebay. Will be going through house and putting more up to sell. Its a game to see what I can make.

Checked pharmacy prices again thanks to a reminder from another Disser. Saving $60 this year by switching DHs one med to Kmart from CVS.

Dropped some services from our land linephone $180 year savings there.

DH just got a work phone once that gets all worked out I will be able to drop our minutes on family plan and some services and save us $300 bucks a year.

I am all over family to turn lights off, stop wasting water, turn off the tv. Goal is to shrink electric bill before AC season. I can't afford central air at these inflated electric prices.

I drive to NJ for gas only 5 miles from my house. Gas is around $3.00 in PA I got gas last weekend for $2.80 in NJ - DH and I both do this. Figure it saves us $8.00 week or $400+ dollars per year.

 

[AuroraBeauty]

I've noticed that a number of OPs indicated that they paid off their smaller credit card balances first.

What I learned was that I should focus on paying off the card with the highest interest rate first because I'd actually save more money.

Just a thought.


Now, I am debt free (except house and car). If I can't pay cash then I don't buy it. I budget for big purchases and have a 'rainy day fund' (which should be called the water heater fund b/c that is where it has gone lately).

I have a Home Warranty for my house that covers plumbing and electrical and A/C and stuff like that but it has more than paid for itself. I pay a co-pay and the repair company comes out and fixes the problem. It doesn't cover everything but it covers a lot. Our house isn't old but things just aren't made to last any more.

I don't eat out a lot (having a food allergy help with that one) but when I do I try to be aware of what we're spending. Most of the time DD eats from our plate too.

I've learned how to do a lot of things around the house. I'm not saying I'm opening up my own handy-woman service any time soon but I've figured out how to do things that would have cost hundreds of dollars.

And I save. DH thinks I'm weird b/c I 'hide' money from myself but it works for me. And until I can figure out another way, I put the money aside and pretend it's not there.

 

[Pigeon]

We have never had debt other than a modest mortgage and one small car loan at a time.

However, we had to save up $$$ twice for international adoptions. In addition to the suggestions I see here, we do the following:

No cable TV. Watching TV is a total waste of time, when we could be doing something more productive anyway, so why pay for it?

We spend almost nothing on entertainment. We use the public library heavily, and go to free museums and events for fun.

We both work out of the home full time, so the temptation to eat out is always there. I got a freezer, and started cooking extra on weekends. I have a stash of good, home-cooked meals that I can get on the table in 20 minutes flat. So, we don't eat out on impulse anymore. Plus, I do my extra cooking based around what's on sale at the grocery store.

We drive our cars into the ground. One of our current cars is a 93 Corolla. It's going to need to be replaced in a year or two, but it's been a great car and is terrific on gas.

We don't have A/C. It just uses too much energy. We avoid it more for environmental reasons, but the cost savings is nice.

We use tracfones, but only for emergencies. It's much cheaper than having a contract.

 

[TnTWalter]

Keep track of what you spend money on...you'd be surprised how much money is wasted. My girlfriend added up her last month's expenses and realized they spent $600 eating out!!!!!!!!!!! She was sick.

Here's an easy way to determine if you have money to eat out or what have you.....First after you figure out net income minus all fixed expenses, then you determine 'grocery, entertainment, gifts, household, etc. categories. I take an envelope for each with the $$ allocated at the top. I then subtract like I would a checkbook register. So now when I want to eat out, I check the envelope to determine what's there and plan accordingly. If I go out I subtract and go from there. It's great to keep the envelopes for recordkeeping or in case you need to return something, makes it soo easy.

We had several garage sales and went crazy on ebay when we were getting out of debt...plus it lessens the clutter! I was able to fund Christmas one year that way [now we have a monthly savings deposit for Christmas, vacation, etc.]

We go to parks, etc during the summer and I also plack a cooler as someone suggested. String cheese, fruit leathers, apples, water, what have you. So much healthier too.

We camp during the summer. Cheap vacation fix. Kids love it. It's good bonding time and I survive. LOL.

When we were getting out of debt we had many date nights in. I made some great meals and rented a library movie...dh would make a fire....

Even now, we often do cheap dates out....we'll go to a restaurant sit at the bar and have a glass of wine for me, beer for him, get a couple salads and appetizers, tip well and spend $30....and a really nice date night without spending $$ or eating a ton.

I get kids' haircuts at Great Clips on occasion....using a coupon...$10 AFTER Tip....I've even done it!

Take advantage of Price Matching...look in Sunday paper, write your list using sale prices and coupons if applicable [I still have a hard time getting best bang for buck w/coupons....I do so much generic] and shop at ONE store. Walmart has best PM policy, but Meijer is also good plus Meijer has double coupons up to $1 so if I have a good amount of coupons, I go there.

Trish

 

[TnTWalter]

Oh and not having car payments is such a joy I tell you. We drive our cars into the ground too. Mine currently has 115K on it and going strong. DH just bought a 'new to us' Truck to replace his with 200K on it...and he still made $2700 selling the old one! We also now buy and sell private third party so since he owned his truck that was cash in his pocket.

DH is fairly handy in general and so also with the vehicles. We spend very little on upkeep.

I've heard the average car payment is $457 a month. Crazy. We have a vehicle replacement fund which we just used some for above truck and now are gearing up for the van in a few years, God willing she holds out.

I am also queen of bargain shopping....I just got an AIO printer and digital keychain camera for $30 after rebate...the key is not to buy things just because they're good deals [always tempted like even on this site].

www.slickdeals.net and www.gottadeal.com are my faves. Camera, laptop, tvs, toys, even reams of paper...whatever.

Trish

 

[maxiesmom]

I've noticed that a number of OPs indicated that they paid off their smaller credit card balances first.

What I learned was that I should focus on paying off the card with the highest interest rate first because I'd actually save more money.

Just a thought.

Dave Ramsey suggests doing the smallest balance first, so that you will make progress faster, and then be more likely to stick to it. That has helped me pay off 3 credit cards so far, with 3 more to go.

Either method works, as long as you stay with it!

 

[nowellsl]

Oh and not having car payments is such a joy I tell you. We drive our cars into the ground too. Mine currently has 115K on it and going strong. DH just bought a 'new to us' Truck to replace his with 200K on it...and he still made $2700 selling the old one! We also now buy and sell private third party so since he owned his truck that was cash in his pocket.

DH is fairly handy in general and so also with the vehicles. We spend very little on upkeep.

I've heard the average car payment is $457 a month. Crazy. We have a vehicle replacement fund which we just used some for above truck and now are gearing up for the van in a few years, God willing she holds out.

I am also queen of bargain shopping....I just got an AIO printer and digital keychain camera for $30 after rebate...the key is not to buy things just because they're good deals [always tempted like even on this site].

www.slickdeals.net and www.gottadeal.com are my faves. Camera, laptop, tvs, toys, even reams of paper...whatever.

Trish

I've read that having huge car payments are the worst financial mistake people make! I'm driving a 1995 with 165,000 miles and saving to buy a good used car with cash when I have to.

One thing I learned to that you'll never pay off debt if you keep charging! You have to get serious in that regard. I use credit cards for rewards but I never charge anything I can't pay off with my next paycheck. That takes a lot of self control, but I have vowed to not pay a dime of interest to anyone again! It's my mission. Luckily my house is paid off.

You would be amazed how much you can save in a change jar I cash mine in every couple of months and put in savings. In 2006 I saved $700, in 2007 $670.

 

[Toby'sFriend]

basically, we just quit spending. Really, for about the past 7 or 8 years we've always had some major kind of goal, get out of debt, go to London, right now we're saving up to have a vacation home.

Whenever I go to Target or anyplace else I always look in my cart and think, ok what do I want more the vacation home or these picture frames. etc
You'd be surprised at the amount of stuff that gets taken out of my cart.

I also took the credit cards out of my wallet. Yeah, we were paying them off every month but often I was paying the paycheck float game with them or I was buying stuff without too much thinking of how much it really cost. Now, if I don't have the money in my checking account, I can't buy it because I can't pay for it. That alone really cut down on the impulse shopping.

I also don't "Spave" anymore which is spending to Save. I don't buy stuff just because it is cheap. For instance, I don't care what's in the Target 90% clearance aisle unless it is something that I need. I'm not going to buy it just because it is 90% off and I might need it someday. When we need it, then I'll go out looking for it.

 

[Luvdancink]

I agree with the key being not to buy things just because they are good deals. I get caught in that trap from time to time. Now I'm trying to buy things only when I need them (except for my freebies at CVS... I consider it my hobby now to see what I can get free there.)


Kristy

 

[nowellsl]

basically, we just quit spending.

That's what I did when I started! I was on a spending freeze for two years! I used to go to Target (I lOVE Target) on the weekends if I was bored so I had to make myself stay home or do something that didn't cost anything! If someone at worked asked me to buy something I'd say "no, I'm on a spending freeze" and it was funny because everyone could relate! Even though I'm debt free now, I still don't shop like I used to. You kind of get to where you don't want to spend money (which is a good thing for me!)

 

[Green Tea]

DH just got a work phone once that gets all worked out I will be able to drop our minutes on family plan and some services and save us $300 bucks a year.
.

The IRS rules changed this year, so just a head's up that the phone plan's price is taxable income now. I was trying to figure out what the technology line was on the new pay advice. Cell phone service. (and he doesn't even use it for personal calls. But on the off chance I would need to call him on it, yep, IRS deems it personal use therefore taxable.)

 

[MyKidsMom1820]

We have never had debt other than a modest mortgage and one small car loan at a time.

However, we had to save up $$$ twice for international adoptions. In addition to the suggestions I see here, we do the following:

No cable TV. Watching TV is a total waste of time, when we could be doing something more productive anyway, so why pay for it?

We spend almost nothing on entertainment. We use the public library heavily, and go to free museums and events for fun.

We both work out of the home full time, so the temptation to eat out is always there. I got a freezer, and started cooking extra on weekends. I have a stash of good, home-cooked meals that I can get on the table in 20 minutes flat. So, we don't eat out on impulse anymore. Plus, I do my extra cooking based around what's on sale at the grocery store.

We drive our cars into the ground. One of our current cars is a 93 Corolla. It's going to need to be replaced in a year or two, but it's been a great car and is terrific on gas.

We don't have A/C. It just uses too much energy. We avoid it more for environmental reasons, but the cost savings is nice.

We use tracfones, but only for emergencies. It's much cheaper than having a contract.

I love your style!

We employ many of the same tactics!!! I would like to add that instead of taking my kids to gymboree or any other expensive child and mom activity, we go to story times at the library and playgroups sponsored by our school district which the kids love, and are FREE!

We also like to garden, which saves on veggies in the summer! and the ONLY times we eat out is when we have a coupon or a very special occasion.

 

[tonilea]

Stop buying things you don't want or need to impress people you don't know or like.

Learning to tell wants from needs has been a big key to us. As a society we use the word "need" way to freely.

Change your attitued about "deservatude". Even though the car dealer tells you that you DESERVE a new car doesn't make it so. Just because you have a rotten day at work doesn't mean you DESERVE to go shopping for stuff you don't really want or need.

Having an emergency fund and having previously defined emergencies.

Having a monthly budget and sticking to it.

Having things like a clothing budget (children grow, clothes wear out), an entrertainment budget (we eat out about once a month, you have to allow for some luxuries) and a small blow fund (money you aren't accountable to anyone for - so we don't try to micro-manage each other)

Repair, reuse, recycle. Our grandparents did it. They didn't live in the disposible society we do today.

Do it yourself. We have saved a bundle on home repairs.

Pay with cash. Particularly grocery shopping. I don't like to do it, but it saves us money. I always spend more with a debit card. Always.



For me, living on a budget has been very freeing. I always thought life on a budget would be restrictive. I was so very wrong.

I don't worry about buy clothes for my son - I am no longer buying that great bargin and then worrying about where the money is coming from. No more robbing Peter to pay Paul. If I have money in the clothing envelope, then I am free to spend it. No worries. That is what it is there for.

 

[JonS99]

Dave Ramsey suggests doing the smallest balance first, so that you will make progress faster, and then be more likely to stick to it. That has helped me pay off 3 credit cards so far, with 3 more to go.

You will make progress faster by paying the ones with the highest interest, right???