Living debt free isn’t easy. Don’t let anyone fool you. There’s a price to pay (pardon the pun) for staying out of debt. You have to say ‘no’ to yourself quite often so as not to reach for that charge card. It takes will power and strength and let’s be honest, most of us aren’t that strong.
I first went debt free in 1987, right after the Stock Market Crash of the same year. I remained debt free for 10 long, hard years. I call those years ‘long and hard’ because it involved a lot of sacrifice. A lot of saying ‘no’.
Until I got this pre-approved Mastercard in the mail with a credit line of $1,500. After sacrificing for over a decade, hubby and I thought we deserved a vacation and we could handle this new-found credit card (after going without charge cards for 10 years). Within seconds we booked a trip to California and upon arrival we rented a car (charged to the card) and traveled from San Diego to San Francisco with a stopover at DisneyLand along the way. All charged to that credit card.
Big mistake. It didn’t take me long to get back into consumer debt with an inability to pay the money back in full. Before I knew it, I was inundated with revolving credit card payments and interest! One card led to another. You know how it is. The cards led to an auto loan and well, the rest was history.
In 2001, I sold my home, had enough equity to pay off all consumer debt and re-start a new life, once again, totally debt free. This time I was older and wiser. And yet again, when you are debt free, in order to stay that way, you have to make a lot of sacrifices along the way. You have to say ‘no’ to yourself all over again. It is only the horrid memories I have of falling back into debt that keeps me now on the straight and narrow. I don’t mind saying ‘no’ to myself anymore. In fact, I understand the value of ‘no’. It’s what keeps me out of trouble.
Do I have charge cards today and a line of credit? Yes, I do. I’ve gone from a FICO score of 0 (zero) to 825. I also have a small RV loan. What’s the difference from today to yesterday? The difference is that I have enough cash in my bank to cover these debts should I ever run in to trouble again. I pay my charge cards off in full each and every month, so I have no revolving credit nor interest/finance charges. Because of my good credit score, my RV loan interest rate is less than what my money earns invested. This time around, I am using THEIR money instead of my own.
I still, however, have the good sense to say ‘no’ to myself. Last month, I noticed that my vacation planning had gotten out of hand. So was my spending. I was over extending myself to the point I would have had trouble paying my bill in full at the end of the month. This is NOT a good position for me to find myself in. Memories flooded back into my brain and without blinking an eye, I said ‘no!’ and cancelled everything. I got all my vacation deposits refunded and I returned my overpurchases. It took around a week but by the time the end of the monthly billing cycle came due, I was back in my affordable spending zone.
Most people wouldn’t have done this. They would have gone on the vacation and worried about the costs later. Ditto for the consumer items. They would have purchased them anyway. Not me. I mastered the art of saying ‘no’. I fully understand the consequences and it’s not worth it. DH was very happy I did this reversal. He didn’t have the heart to tell me he was too tired to travel this year. He wanted a year off to recoup from all our other adventures (which was to sell a Florida condo that didn’t quite work out for us after a time………which again proves I have the power to say ‘no’ fully under control!)
Staying out of debt requires making a lot of sacrifices. It involves prioritizing your needs vs your wants. What about you? Are you debt free? Do you find it difficult to remain debt free? What sacrifices have you made in order to remain debt free or at least keep your spending in check?