DEBT FREE! How great does that sound, say it with me, DEBT FREE! How would you feel if you were debt free… only having the necessities, i.e. mortgage, car payment… Wouldn’t that take a load off of your mind? Well here are some ways to begin to KILL THAT DEBT!
From putting spare change to work to going on a spending fast, these folks found creative ways to chop their debt.
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Courtesy: Anna Newell Jones |
| Jones, 31, dyed her bag blue and her jeans black to extend the color — instead of buying new clothes. |
Anna Newell Jones
Strategy: Go on a spending fast for a year
Advice: Get creative. There are endless ways to save.
I had been spending over my means for a while. Every month I was spending at least $300, overdrafting my account and feeling horrible about it.
I realized I had all these wants and it was an insatiable thing. I would say, “Oh, I love this top from Anthropologie,” and then as soon as I got it everything would be great… until I wanted something else. So I knew I needed to do something drastic. And one day, it clicked.
I decided to start a spending fast for the new year, which meant no spending on anything except absolute necessities — like my mortgage, utilities, car payments — oh, and hair dyeing. That was one “want” that I turned into a necessity as I started to see my roots grow in.
I can’t buy clothes, no coffee out, no eating out. To save money, I’ve done the normal budgeting things like buying generic brands of groceries. But I’ve also started wearing all black and dyeing my clothes to extend the color. I’ve been re-gifting, growing my hair long to avoid haircuts, stuffing two loads of laundry into one and eating a lot of old canned food I’ve found in my cupboard. I also make random stuff to sell in my spare time. I have a store at Etsy.com where I sell zombie portraits of people, super cute baby onesies and banners, tags and shipping labels.
My year-long spending fast began on January 1, and so far, I have saved $5,772.25. $4,800 of that went to credit cards and the rest will go to paying my parents back the $3,247.97 I owe them and my $10,000 in student loans.
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Courtesy: Lance Pickett |
| Lance Pickett, 32, and his wife put their “wants” on a Dream Board while they pay off their debt, and they track how close they are to paying off their mortgage. |
Lance Pickett
Strategy: Live without the little things
Advice: Don’t go too far — like trying cloth diapers to save $60
My wife and I owed $18,000 in student loans, $6,000 in car loans, $2,000 in credit cards and $152,000 in my mortgage.
We were living paycheck to paycheck and I was tired of seeing my bank account zero out every month. So we wanted to get out of as much debt as possible as soon as possible. We started by saving an extra 1/12th of our total required expenses — like mortgage, utilities and Internet — each month, in order to have one month worth of bills saved up at the end of the year. Then we got excited and doubled that. In three years we had six months of living expenses and threw that into a high interest CD at 5%. That really got us going, seeing the money grow — and we became obsessed with eliminating debt.
We just really took a look at what we need and only spending money on those things. I used to eat out a lot and that cost me $200 a month. Now we invite friends to “eat-in” at our house. We have a garden and purchase produce from co-op programs. Before we became debt-obsessed we would also get nice Christmas gifts for each other, but now we limit each other to $50.
Now, if there’s something we want we put it on our “Dream Board,” a cork board by our bedroom door that we see everyday. And it will stay there until we’re debt free. It also has the loan schedule for our house, and each month we scratch off a month. Next to the schedule, we post our ultimate “want” that we agree to purchase — with cash of course — once our house is paid off. I have a 2010 Camaro waiting for me.
Cutting back so much has been hard, but we’ve learned a lot along the way. My wife learned some things are worth paying more for after trying to use cloth diapers — which most people use as burp rags — pinned inside training pants with plastic pants over them for our two kids, all so that she could reuse the diapers and not spend $60 a month on Pull-ups. As a result they both got horrible rashes, so we switched to a cheaper brand of regular diapers.
Altogether, we’ve paid off around $90,000 since 2005.
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