Sunday, April 3, 2011, AM | Leave Comment
Congratulations on becoming debt free! You let out a big sigh of relief as you make your final and last payment to the creditor.
You never thought you would make it this far and you now wake up every morning without thinking of which bills to pay.
It’s certainly a great feeling to finally become debt free. I’ve been there.
However, just because you don’t have any more debt doesn’t mean you’re out of the woods forever!
I’ve told myself after I got out of debt that I would NEVER fall into the same trap. This definitely wasn’t the case.
As soon as anyone becomes debt free, they have more disposable income at the end of the month.
After all, they’re not making any more $2-$400 payments to their creditors every month. Well, this is the exact problem that many people face.
There seems to be a tendency for people to spend more money when they have excess cash lying around.
Once you’re out of debt, you’ll notice a LOT of credit card offers coming through the mail.
It will say something along the lines of, “0% APR for 24 Months, Pre-Approved $20,000 Credit Limit!”
You’ll need discipline to just turn down the offers. After all, if you ever need a credit card in DIRE EMERGENCY purposes, it shouldn’t be too difficult to obtain one.
People who incurred a lot of credit card debt got there because they were spending more than they earned.
The key to staying out of debt is to keep a spending journal. Don’t get confused between a budget and a spending journal.
A spending journal is used to log all your daily expenses ranging from your household bills to a cup of coffee./p
pIt might sound tedious at first, but keep track of your spending will help develop your budgeting skills (which you will also need to do).
This makes you think twice before you think about what you are really spending money on a daily basis.
Trust me, it’ll surprise you to see how much all those little things add up.
Multiple studies prove that you spend more when purchasing an item on a card.
I don’t remember the direct source, but it took a while for McDonald’s to adapt to merchant processing because they were too stingy with paying all the merchant fees.
Soon after McDonald’s started taking credit cards, their sales went up the roof! If you want to make a real commitment to staying out of debt, lose the plastic. Period!
Getting out of debt opens a new chapter in your life. Now is the time for you to start investing your money more wisely. Don’t fall into the same trap as you did before. Learn to live poor.
Kevin is a co-founder of www.debteye.org, an online financial tool that makes getting out of debt worry and stress free. This tool will allow you to track and manage your finances all in one place. Go to www.debteye.org to see how we can help you get out of debt!