Debt– it’s a terrible thing, and yet so many of us broke-asses are victims to this rather annoying plague. What to do? What to do?
Last week, I was late for one of my credit card payments. I kept getting phone calls from a bizarre area code, that after I googled it, discovered it was from Kentucky. Kentucky? I don’t know anyone from Kentucky, I thought. Oh, it’s Citibank calling me. Garghh! Yup, once you don’t make your monthly payment, they stay on top of your shit! And you should have too!
I racked up this pesty debt a few summers ago, that damn first summer when gas prices initially peaked. I had moved back to my parent’s house for the summer in between college semesters, while I looked for a new place to live. My job remained in San Francisco, so each day I had to make the 40-minute drive to get to work. On top of frequently needing to fill my tank up, as a college kid during the summertime I was most likely irresponsibly spending it on food, clothes, and other unnecessary things. You know, it just happens! Oops..
Ever since this dreadful summer, I have been really good at resisting my evil credit card; it has been sitting in my wallet untouched for quite a long time. See, I made a promise to myself that I would only use it if in some sort of heart-attack-inducing emergency. I guess a few months ago, that life-threatening emergency turned out to be a new cellphone. But in my defense, my cell phone had died on me altogether and well, who really has a landline these days anyways? (Just kidding, my parents do.)
So anyways, now I’m uncomfortable with having this amount of debt (although compared to some other people I know, it’s really not that bad). I have been trying to find ways to clear up my financial record and now I must say thank you Internet Gods because there’s tons of people out there with the same exact problem, holding discussion boards and posting their favorite family budget tips. Here’s a growing list of good resources that I have compiled, regarding the best tips for saving and avoiding/getting rid of debt.
1. I remember reading in some girly magazine (probably a Cosmo or something like that) a trick for those shopaholics: freeze your credit card so that you are literally unable to use it for spending. I wish I could find the article to explain the exact details: i think you’re supposed to freeze it in a block of ice, but now that I think of it: I wonder if that would damage the card? (If someone knows this trick, please comment and help me explain this correctly.) (And, okay, so maybe this first tip kinda sucked, but you get the point. Anyways, here’s some really good ones..)
2. “#60 Put a note in your wallet with this text: ‘DO I REALLY REALLY NEED THIS?’ “
Read ZenHabits’ “73 Great Debt Elimination Tips”. It has an awesome long list of tips compiled from the blog’s own readers’ comments.
3. “While everyone has different budgetary needs, it’s always a good rule of thumb to keep your mortgage or rent costs at 30 percent of your take-home salary. Food costs should be about 12 percent; transportation at about 15 percent; insurance at 5 percent; 401(k)/retirement savings at 6 percent; and an emergency savings fund at 5 percent. The rest should be used to cover any medical expenses, debts, clothing, entertainment and other miscellaneous expenses.”
Oprah is awesome, there’s no denying it. On her website, she has tons of articles revolving around this subject. This tip came from one of my favorite and personally relevant articles of those listed, “Just Out of College? Make the Most Out of Your Salary” by Clarky Davis.
4. CNN offers a Debt Reduction Planner Calculator on their website that allows you to input your own financial information and figure out something that works for you.
5. “There is no budgeting trick or technique that is more powerful than going to pay for $60 in groceries and only having $45 in the envelope. I promise, the first time you put back $15 in items – your commitment to budgeting will never ever be the same.”
“24 Quick Actions You Can Do Today That Can Change your Financial Plan Forever” from Man Vs. Debt, a really great blog by Adam Baker, who is in his own financial pickle and has created this motto for himself, that he now shares on his blog: “Sell Your Crap…Pay Off Your Debt…Do What You Love.” Sounds good to me…