How to Live Debt Free Without Credit Cards

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Living debt free is a goal that many of us have, but few of us seem to be able to achieve. Our modern world seems programmed to keep us in debt - credit cards, financing for major purchases, store cards and more keep promising us that we can have what we want now and pay for it later. It is a massive temptation. When we are looking at the signs that say 'Nothing Down, and no Payments for 12 Months' we aren't thinking of the extra cost that is implied in that financing. When we buy everything on credit we can end up paying as much as 3 times the value for the items we purchase. Over a life time this money can really add up. So how do we get out from under the burden of our consumer debt?

The key in lightening the debt burden lies in re-establishing spending priorities that are within your means. The fact is, when you live debt free you will actually have more than enough money to buy the same stuff you buy on credit, the difference is that you cannot necessarily buy with the same sense of immediacy. When you are living consumer debt free, purchasing takes on a save and spend cycle. Although the change to this new cycle of monetary control will take awhile to adapt to, eventually it will become natural and you will wonder why you voluntarily threw away so much money on finance and interest charges.

In order to reach a state where you can successfully live debt free and live without credit cards you will need to resolve the outstanding debt you currently owe. Minimum payments are a trap to maximize credit card profits and to keep you locked in debt, so start making more than the minimum payment each month. If you have multiple credit cards and financed purchases, choose the account that has the highest interest rate and concentrate on paying it off as quickly as possible. Once you have cleared the first account, choose the account with the next highest interest rate and repeat the process. Although it may take some time to clear all of your consumer debt in this manner, the feeling of relief you will gain as you gradually break free from credit card after credit card will deliver great satisfaction. Once you have cleared the balances on all of your credit cards and financed purchases, cancel the accounts, cut up the cards and prepare to live a life free of the credit burden.

For many people the initial months after all consumer debt is cleared are the hardest. The mental boost you get from becoming debt free soon fades and the offers from credit card companies desperate to win back your business start pouring through the mailbox. Resist temptation to open any of the junk mail - your did not work so hard to get out of debt only to be sucked back in by a better interest rate and a high starting balance. Just put any mail from a credit card company directly into the trash - eventually, when they get no response from any of their mailings they will stop sending offers.

Managing your spending while you are debt free is a fairly easy process once you get into the habit. Review your spending habits over the past couple of years and create a budgetary amount for things that in the past you bought on credit. Items this list might include are - clothing, jewelry, household goods and appliances, books, videos, games, meals out and travel. Once you know what your average yearly spending was in each of these categories it will be easy to create a savings that provides for spending in these categories. When you first see the amounts in each category you may be a bit shocked, but you can easily afford to buy what is there because you won't be paying any interest or finance charges on the purchases. You may also find that you buy less than in the past, because without the lure of 'painless' credit buying you will pay more attention to your true needs and be less at the whim of impulse buying - one of the primary causes of high consumer debt.

One method that works for many people who are attempting to live credit card free is to establish a monthly 'allowance' program for household and personal purchases. To enact this method you will need to establish a monthly budgetary amount for all household expenses. For standing bills like a mortgage payment, taxes and utilities you pay them by check or bank transfer as normal. For all other purchases, including groceries, gifts, clothing etc., you will take the budgeted amount in cash and place it in an envelope marked with the appropriate category. If your grocery budget is $500 each month then on the first of each month the envelope will contain $500 - this amount will gradually decrease over the month as you do your regular shopping. Using cash for all purchases in this manner will help you keep tabs on your money and help you discover just where the problems remain in your sending habits. You will now have the knowledge to correct the bad habits that credit card sending concealed.

The quest to live debt free is a worthy one, but like all quests it will take dedication and sacrifice on your part. While you are paying off outstanding consumer debt you will feel the budgetary 'pinch'. Don't give in to cravings to shop however - most of these impulses are programmed into us by advertisers who have employed expert techniques to trigger our desire. Stay focused on the end goal, give yourself occasional treats (paid for by cash, of course) and remember that once you are debt free you will be able to purchase without guilt. There is no reason to continue to throw money away on finance and interest charges. You can live without credit cards and experience a life free from the shackles of increasing finance charges, rising interest rates, and spiraling debt.

Get your financial life back on track today! Visit the best guide on the web to learn even more about how to live without credit cards now. You'll find everything you need to handle collections and credit-related topics at
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October 13, 2009 at 1:34 AM

I enjoyed reading your blog. Thanks for sharing.

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