MSN Money has a great article showcasing people that conquer huge debts quickly – and it makes ours look like a small pittance!
A couple paid off a $150,000 mortgage in five years, another knocked out $8,000 (of $49,000) of her credit card debt in nine months!
The stories themselves focus on a couple key components of most frugal living/personal finance topics: grads getting a house, unexpected job loss with debts out of control, or my favorite, a desired life-style change to spend more time learning and loving your family.
The key factors they really show us, are something you’ve no debt read (and will continue to read about, until everyone out there thinks of it as common-sense!) is:
Live like a college student! Just because you graduated and are ‘making the big bucks’ doesn’t mean you need to start splurging. Sure, buy yourself something nice – but save, scrimp, and pay off! It’ll be in your best interests in the long run – I know quite a few people in their thirties who tell me they wish they buckled in and paid off their debts earlier, and not delaying them and spreading them out as long as possible, to the point that after marriage and kids, it’s still an issue.
The last story, one of post-divorce, had a great list of tips (but I think they needed some help, emphasis mine):
* Opts for basic TV service — no premium channels. Why cable at all? Free TV still lives!
* Chooses a dial-up Internet connection ($9.95 a month) over high-speed service. I agree – only get High Speed if you really need it
* Buys food in bulk to last for months. Canned goods and non-perishables all the way!
* Takes his lunch to work. I skip lunch at work most days so I can eat with my wife after work – I’m a little more hungry, but it’s nice to sit with my wife.
* Makes a budget for the holidays, birthdays, etc., and sticks to it. This applies to all social events – budget, and stick to it. And do you really need a million-dollar party?
* Applies “extra” paychecks to debt (a biweekly pay schedule had provided a third check two months a year). I love the three paycheck weeks. That is debt pay-down time.
* Applies any bonuses toward his debt. Bonuses, rebates, tax refunds – all of it to your debt!
* Sets the thermostat in winter to 63 degrees. Wear warm clothes, socks, sweaters or get a space heater – preferably one with a built-in thermostat and sensor!
* Sets the air conditioner to 79. If it’s summer, be naked. The environment will thank you.
* Buys compact fluorescent light bulbs to reduce electric bills. We’re in the process of this now! Save money in the long run.
* Takes out $25 in “walking around” cash each week. When it’s gone, he doesn’t spend more. I don’t think I even hit $25 with my current budget. It’s a nice idea, though.
* Keeps the credit cards at home. I love how it’s plural. Leave them at home, frozen. With no balances. ;)
* Shops with a list and buys only what’s on the list, and avoids looking at anything else, including sale items. When my wife and I started doing this, we noticed a drop in 50% of our grocery bill.
* Keeps his car tuned up to avoid bigger expenses. This is important to prevent that “little problem” from becoming “the big problem.”
* Doesn’t keep up with the Joneses. He says he doesn’t care what they drive, where they vacation or what they wear. I love the Joneses. They give me a model to avoid, because I don’t envy their American Express bill.
* Avoids buying coffee or food “on the go” but instead eats at home whenever possible. The little expenses add up.
* Stays away from vending machines at work. Vending machines are trap doors to fatty fat and brokey broke.
* Doesn’t play the lottery. Gambling is gambling. If you want to throw money at something, throw it to me.
* Buys broken bags of mulch and fertilizer at deep discounts. This goes for many items – always check for a discount on used/dinged goods. Cosmetic defects are just that – cosmetic.
* When shopping for appliances, buys last year’s model. Buy last years, and check out for places that have close-out deals.
* Budgets vacations and looks for coupons wherever possible. This is what we’re doing – setting a goal and time frame, and slowly budgeting towards it. When we reach it – we’re taking a vacation. Not before.
A ton of useful tips for a grad, a divorcee, or anyone looking for a lifestyle change. They mention taking a second job, which I recommend (and have done before) but remember not to stress yourself out! You need to budget your time so your loved ones don’t suffer!