Finances

Escaping Credit Card Debt - continued...
This material appears courtesy of Tywebbin

At the peak, Cara figures they had about $30,000 in credit card debt. She began to be concerned that they wouldn't have anything saved for retirement. After cutting up the cards, they began to examine other expenses. "I look at everything we're spending. That helps because you see what you've done.

"We do make good money, so that helped. We have an advantage that a lot of people don't have. Every penny that we've got in any kind of bonus, extra salary that we've made" went to debt reduction.

But Michael and Cara used more than increasing paychecks to get out of debt. They looked at their expenses and made some lifestyle changes. "We got rid of our cars. We now have two used cars. We took out a home equity loan to buy them. I've paid off one of the used cars and a good portion of the other car."

Even smaller purchases were questioned. Friday night pizzas became a homemade affair. Regular movies and manicures became a thing of the past. Does she miss the old days? "Not really. Especially not the eating out. We eat a lot healthier."

What advice would Cara pass on to others who are concerned with mounting debts? "Just don't buy what you want. If I really want something, I'm going to think about it for a long time. I'm going to research all the possibilities. Do I really need it? How much use am I going to get out of it? If there's something that I don't need, but really, really want, I'll still think about it."

The path to financial freedom has also been a learning experience for the couple. They've rediscovered the local shoe repair shop. Secondhand stores were found. "I wanted a pair of jeans. So I went to Goodwill and found a pair for $2." Cara sought ideas from other sources. She borrowed the Amy Dacyczyn Tightwad Gazette books from the library. "The library has become a great resource for me. We used to spend a lot of time in the bookstores, and a lot of money in them."

Cara's voice brightens as she describes how they got closer and closer to paying off the final card. It's taken about two years to accomplish their goal. The next step is to finish paying the home equity loan that was used to buy the second car. That's expected by the year's end. Long range plans include a well-funded retirement account.

In the meantime, they're beginning to explore the luxury of being free from debts. Michael has taken a lower-paying job that he enjoys more. Cara thinks of spending more time helping disadvantaged children.

How would Cara summarize their experience for others? "The first thing is to stop spending. Don't put any more debt on the credit cards. If you want something you'll just have to do without for awhile. Every extra bit that you earn you put towards the credit cards. Reward yourself once in awhile but do it realistically and within your budget. Just look at where you can cut. That's what we did."

Our congratulations go out to Cara and Michael. And a big 'thank you' to them for sharing their story.

Visit the Tywebbin website

More about finances
What the Bible Says About Your Money