How To Learn To Live Without Credit

Living debt free is a done deal for more and more Americans

, so if you think it is an impossible dream, read on!

There are people making a fortune by selling their debt elimination strategy. Others see it as a holy mission, to equip people with the financial tools and the structure to pay off all debt and live on a cash basis. Others are clamoring that leveraging your credit is the key to financial freedom. Banks trumpet the advantages of enjoying the good things of life by using their 'Buy now pay later' credit cards. Who is right?

Most people do not realize how much money dribbles away on a cup of coffee here, a new notebook there, a pair of shoes to match a dress your sister gave you. By writing down every single cent that goes out for a month or two, you will finally know where your money goes.

Then a budget must be built, with all the bills listed first and the categories set. Some expenses are beyond discussion and are set in stone. When all these are listed, the rest of your income must be allocated to food, fun, and giving. All of these are important. You meed to eat, life without fun is drudgery, and giving helps the world go round more pleasantly for all.

Credit experts almost all agree that going 'cold turkey' is the only way to start on the road to recovery. Cut up the cards, track expenses obsessively for a month or two until you know where every penny goes, and then make a budget. There are many tools to help you create a budget, and there are many, many more who believe they can operate without one. Those who succeed in eliminating their debt almost always have a budget which they follow meticulously.

What does a budget do? Basically it allocates a certain amount of money to each category of expenses that you face during each month, with an amount reserved for saving toward an emergency fund and then a nest egg. In practice, it restrains you and other family members from impulse buying. When there is a finite amount of money in the discretionary fund, it will be easier to dismiss the idea of an extra fast food lunch or a teeny tiny electronic gadget that catches your eye.

If you factor the price of any object bought on credit - the total price - you would probably never pay that much up front. The compounding of interest is a business strategy that makes the credit companies rich beyond belief. Getting out from under the charges placed on consumer debt is like a labor of Hercules, and you may feel that it will never happen in your lifetime.

Do not decide to keep the car and give up fun. Not only do you need fun in your life, but you often interact with friends and family while playing. Just have fun that does not cost much. Make a kite out of heavy junk mail and straight sticks - you can probably fit a little string in the 'Fun' category of expenses - and fly it; all concerned will remember both the kite and the excursion. Pull out all the local team paraphernalia and watch the game on TV in style - Take a walk with the whole gang - get together for cards or board games - talk to each other (hot air is free!). In other words, track your expenses, figure your income, and make the act of staying within it an art, not a penance. You can do it!

by: Ray Cleeves

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