One Year After Paying Off Credit Card Debt

one year after paying off credit cardsWe’ve had so much going on for the last couple of months that I actually forgot our one year anniversary of freedom from credit card debt. We paid off the last of our $30,000 credit card balance on November 27, 2012 and haven’t looked back. In past years, we were able to pay off credit cards, but ran them back up within a few months. What happend this time that kept us out of debt?

You Can’t Stay Out of Debt if You Don’t Have Goals

We never stayed out of debt in the past because paying off Visa and Mastercard meant lots of available credit to buy more things. We didn’t have a purpose for our money. To keep free from credit card debt, you have to know how much you make, how much you need to spend for necessities, and what your short and long term goals are. If you know what you want to do with your money outside of shopping to cure boredom, it’s easy to plan how to get there.

When you don’t have a purpose for your money, it’s easy to spend it on silly things. Now I know exactly how much I have to save each month to max out retirement contribution and our HSA account. We also have goals of paying off our house and buying more rental properties. I don’t want new shoes when I see the bigger picture of being able to work less or retire early.

You Can’t Stay Out of Debt If You Follow the Herd

Society encourages debt. You can finance anything and bring it home today. Most people think about if they can afford a monthly payment rather than how the purchase will affect their future. People want things they see others have. We are often judged on how we appear and what people think we should be driving or wearing. If you want to stay in debt, there are plenty of people to help keep you there.

I know frugal people, but the real community I’ve found that I hold myself accountable to is online. If you don’t have friends and family members who share your goals, find some new ones. I’m not saying to cut out everyone in your life, but you can’t let others take you down with them. Learn to follow the right set of Joneses.

You Can’t Expect Your Children to Stay Out of Debt if You Don’t

Maybe this is the bigger reason we are going to stay out of debt. Having a child is a motivation like no other. While it is possible to not follow in the footsteps of your parents, like Laurie said recently, we do inherit many of our behaviors that make it harder to change.

If your parents smoke, you are more likely to smoke. If your parents are violent, you are more likely to be violent. If your parents made lots of money mistakes, you are more likely to make money mistakes. No one wants their children to struggle with the same issues that caused problems for them, but you can’t tell kids to do as I say not as I do. If you do something you don’t want your child to repeat, stop doing it. I want to be debt free and be smart with money so my daughter will have the tools to follow that path rather than setting her up for financial failure.

What You Can Do To Stay Out Of Credit Card Debt

There are lots of can’ts in this post, and I always like to keep it positive, so here is my advice for staying out of credit card debt.

  1. Make paying off credit card debt your focus. IT CAN BE DONE
  2. When you have six months left to debt payoff, make goals for a year, five years, and ten years.
  3. Be your own person, and don’t jump back in with people who will make you want to waste money.
  4. Take some time to think about how good it feels to be out of debt. This is reason enough to never buy things you can’t afford.
  5. Spend money. Yes, it’s OK to spend money on things you value and that bring you happiness. Just make sure you have money to pay for them before you buy.

I have to say that 2013 has been one of my best years, and I look forward to every day, even the days when bills arrive because I know I will be able to pay all of them without going into debt. I’d love to hear from others who have been debt free for a while or from those in debt about your plans for when you do pay everything off.

When is your deb free day? What is the goal for your money after that?

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