5) Cable. Your Excuse: “But, but, but I need cable! I get a good deal! It’s only $100 a month! I use it a lot! It’s bundled with my phone and my internet. I’ll only save $30 a month if I cancel it.”
Know what? We don’t care. If you have credit card debt you can’t afford cable. You don’t actually need it. In fact, after you get rid of it, you may well find that you don’t even miss it. Lots of people get along just fine without it. Cancel your cable. Get cheaper internet. Cancel your home phone if you don’t need it. Put the money you save toward your credit card debt. Once you stop spending more than you earn and have paid your debts, you can think about getting cable again.
4) Eating Out: Your Excuse: “But, but, but I love food! I don’t have time to cook! I can’t cook! I’ll poison my entire family! I’m too busy working! It doesn’t cost that much!”
If it didn’t cost that much you wouldn’t have credit card debt. If you are spending more than you earn you have to stop eating out. Learn to cook. When? Well, since you canceled cable, you’ll have a lot more time on your hands. Make yourself a firm grocery budget. You can use the USDA’s food costs estimates to help you. Put all your grocery money in an envelope and go to the store. Don’t spend any more than is in that envelope.
3) Recreational Shopping: Your Excuse: “But, but, but shopping makes me feel better! I’m depressed! My kids need stuff! I need stuff! I have to look good for work! I have to buy expensive gifts for people so they’ll like me!”
If you have credit card debt, you are probably buying more crap than you need. This means that you probably have enough crap to sustain you for awhile. Stop shopping. Have a yard sale. Cut up your credit cards if you can’t make yourself stop. Don’t cancel them, though. You still need to pay them off.
2) Gym Membership: Your Excuse: “But, but, but this is my health we’re talking about! I’m fat! I’ll get fatter! I need the gym! I have a contract!”
Sell your membership or cancel it if its month to month. You don’t really need it. You can do jumping jacks. Also, since you’re going to be eating out less, and sitting on your ass watching cable less, it’ll be easier to lose weight. Once you pay off your debts, you can see if a gym membership fits in your budget. In the meantime, go outside and play.
1) Expensive Cars: Your Excuse: “I am what I drive! I love this car! This car is who I am!”
No it’s not. Sell it. Get a cheaper car. Use the money to pay off your debts. No one cares what you drive except you and really shallow people who suck. Do you really want to be in debt just to impress a bunch of shallow people?
In order to get out of debt you need to curb your monthly expenses:
Let’s say you have $10,000 in credit card debt and your current minimum payment is $250. At 18% with a minimum payment of 2.5% it will take you 382 months to be rid of your debt. In that time, you will pay $14,615.49 in interest. Fun.
If you pay a fixed payment of $250 dollars (your current minimum payment), it will take you 62 months to be rid of your debt. In that time, you will pay $5,386.23 in interest. Still pretty crappy.
If you managed to cut your expenses by $200 a month and applied that amount to your current minimum payment, then paid that amount ($450) it would only take you 28 months to be rid of your debt. In that time, you would pay $2,255.56 in interest.
Still not convinced? You can use this calculator from Bankrate to determine how much money you’re wasting by not paying off your credit card debt as quickly as you can. Getting out of debt will make you feel better than watching TV in a new pair of shoes ever could.
Those of you who got yourselves out of credit card debt, which expenses did you cut? What advice do you have for people who are drowning in high interest credit card debt? Let’s hear it!