Dealing with personal debt

Years ago I used to list all my debts for the month and write out to the side which week I would pay each one. The list of creditors was quite long, and some months the money didn’t go far enough to pay each of them on time. The debts I listed included our utilities and vehicle payments but also included a number of credit cards including store credit cards.

I don’t have to write out a list each month now. The last week of the month I pay all of our bills for the next month. The change in how we handled our bills is nothing more than  developing and following a plan for controlling our spending and eliminating all personal debt. The plan we followed is the one taught by Dave Ramsey.

We listed all our bills smallest to largest, paid the minimum on everything except the smallest and paying as much on it each month as we could. When that bill was paid off we went to the next smallest debt and repeated the process. Eventually, all our personal debts were paid off, credit cards destroyed, and we don’t buy on credit. The only exception to the last statement is that I will occasionally buy gas on a credit card if I don’t want to take the time to go into the station to prepay, and we book airfare and hotel rooms on a credit card which is paid off at the end of the month. We incur no finance charges on these purchases. That is the one area where we do stray from Ramsey’s plan.

When I was younger I always had to buy new cars, financed of course. As long as we could make the payments I thought we could afford the car. That kind of thinking will keep you broke! Two years ago I realized that our vehicles had over 500,000 miles on them, and at least one of them would need to be replaced fairly soon. We saved up the money and bought my wife a very nice used car with low miles with a large amount of depreciation assumed by the former owner. We paid cash for the car. Last year I found a good deal on an older truck that was in good shape and paid cash for it.

This didn’t happen because we became wealthy or won the lottery. We were able to do it because we finally became aware that our previous financial strategies were not working. We needed a better plan, and Ramsey’s made sense. I do not work for Ramsey nor do I receive any remuneration for telling the story of how his plan helped us out of debt and into a better financial future. I am sharing this because Americans are drowning in debt, and this is having a very negative impact on families, individuals, and our nation as a whole.

You do not have to stay broke. You can learn to live within your means, spend less than you make, and save for the future. Whether you use Ramsey’s system, another financial expert’s plan, or develop one of your own, you can get off the debt treadmill and create a better financial future for yourself and your family.

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