As we get into this new year, so many people will set New Year’s Resolutions…and most will fail miserably. Why? For the same reason most people who start a diet don’t lose any weight – it is hard to set a goal and stick to it. It is easier to do the same things you’ve always done. It takes a commitment, motivation and the right incentives to set and meet goals.
With that in mind, many of you set a goal (or resolution) to get out of debt this year. I applaud you. I don’t think most of you reading this understand the freedom that comes from “owing no man anything except the continuing debt to love one another” (paraphrase of Romans 13:8), but I promise you it is AWESOME to live without payments.
A couple of months ago, Stacy and I asked for your help. We asked you to provide your tips and motivation on how to live without debt. And you responded! Although what is to come is a LONG list of tips, every one is a good one. If you’re tired of being slave to the lender, these tips will definitely help you break the chains.
- Be content and find joy in living simply. Even if that means living in a small home and only buying old furniture for sale. You’ll have peace that brings freedom to do so much more. ~Diana from My Humble Kitchen
- Make it easy for your spouse to talk through the budget regularly with you. You are a team and this area can rip apart a marriage super quick. Fight together (not against one another) for financial freedom and He will bless your efforts! ~Jennifer from Growing Up Triplets
- Don’t buy stuff you can’t afford. Period. Even if this means you have to get creative with gift giving, food consumption, and everyday living. Don’t think you’ve gone too far into debt to turn around. Make one change. Take one step. ~Lexie from Lexie Naturals
- The first step is actually TRACKING where you ARE spending your money. I have a very beginning budget that helped us track our spending. ~Jessica from Smartter Each Day
- Use cash instead of credit as much as possible. If you can’t afford it with cash then you shouldn’t buy it. ~Linda at God Craft Life
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- You have to be willing to get creative to bring in the extra money…for us that meant my husband teaching extra classes, taking on a few graphic design clients, teaching Saturday school, teaching in an afterschool program, tutoring after school, and me tutoring, teaching homeschool kids Spanish or–currently–writing on the blog, editing, writing for our local newspaper, etc. For others, it might mean sewing or making crafts and selling them, etc. or babysitting others’ kids. I believe we are all gifted differently and can do something to help with the family budget (and the creative part comes in figuring out something so that mom can still stay at home!!).~Erin from The Humbled Homemaker
- My number one “tip” if I can call it that (since we’re still learning) is to get rid of the credit card. We cut ours up 3-4 months ago and it has been a huge help. ~Beth from Red and Honey
- Keep receipts so that when you realize that thing you bought – you REALLY didn’t need – you can take it back. ~Sara from Your Thriving Family
- Build a vision. Dream a dream. Determine your goal. As a married couple, until we have a common vision of what we want to accomplish, nothing else will help. When we decided that no new debt as my husband finishes college was the goal, we became a team and we actually look forward to “budget committee meetings” each week. This is vital for us to continue living with no new debt. ~Kayla from Renown and Crowned
- For us staying out of debt means sacrifice. We don’t have smart phones, cable, or four-course meals. Some months we eat A LOT of beans and rice. We don’t buy snack foods and new clothes. But it’s not a hard sacrifice because we know we are providing our boys with a realistic view of living on a budget and making wise financial decisions. ~Sarah from Simple Life Abundant Life
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- Buy used and plan to sell it when you are done. This works with baby things, maternity clothes, home school curricula, toys and such. Keep your things nice with the intention of selling them later. Pay half price and know you can probably get that in return. ~Carmen from Make Your Medicine
No credit cards. If you don’t spend money you don’t really have, you won’t end up owing any. We don’t have any credit cards and never will, if we have our way! ~Jaimie Ramsey- Make a plan of exactly how you’re going to become debt free. No matter how frugal you are or how much money you save, or even if you have a budget, the extra money is going to disappear unless you make a specific goal and plan. It’s not going to happen by itself! ~Shannon from Growing Slower
- Simplify. Simplify your home, your schooling, your wardrobe, your cooking, your activities, your relationships, your expectations. Simplify your life. It’s cheaper. It’s less complicated. And it’s a whole lot more fun! ~Christy from The Simple Homemaker
- We got disciplined and creative. We weren’t whole foodies then so we shopped loss leaders ONLY in the stores and discount produce racks. We bought NOTHING we didn’t need and we never ate out. Our date night was a cone at McDonald’s. ~Adrienne from Whole New Mom
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- Get rid of the credit cards. If they aren’t an option then you have no other choice then to live debt-free! I think that is especially important for people who don’t live on a super tight budget. It can be easy to just have them and think – Oh, I’ll pay them off every month. But we all know it doesn’t usually work out that way. ~Emily at Live Renewed
- Don’t spend more than you have. Begin by tithing. Then just live within your means and don’t think you need every luxury that everyone else has. ~Karen from The Fruit Of Her Hands
- Remember that everything you have belongs to God. We are just stewards of His finances entrusted to us. ~LeighAnn at Intentional By Grace
- Quit take-out (pack a lunch), and if you’re over 30-something, STOP BUYING COLLECTIBLES LIKE TRANSFORMERS!!! ~ Sarah (threehappypenguins)
- Staycations are inexpensive, and allows you to put money toward debt – or avoid more debt. Plan a large vacation to work towards for when you are debt free. ~ Adelina Priddis
- Embrace the bean! Giving up meat at dinnertime every now and then will save you big on your grocery bill. ~ Corey (sunnyusf)
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- Use cash or don’t buy. Buy secondhand for almost everything, kitchen, house, clothes, toys, tools, etc. ~Deb (berningdebj)
- If you’re using bounty paper towels I found that washing them and reusing them again saves a sheet. When I buy coffee I always try to go when they are having a buy one get one free OR free coffee coupons; I save the coffee in the fridge and add a little bit of water to it each time I drink. I especially go for the strongest coffee like Starbucks and it lasts me a whole week! Energy and perfect tasting coffee the way I want it. Saves so much money on coffee. ~Sarah Noh
- Pay off one bill at a time, beginning with the smallest, and add that amount to the next bill in line. It WILL happen. Many people say to begin with the largest first, but that doesn’t actually work as well. We NEED to feel successful or we will quit. Paying off the smallest bills first gives us the instant gratification that we need to keep us motivated. ~Rae Evans
- Home birth! It is a fraction of the cost of a hospital birth and minimizes the risk of further, costly intervention. I am so glad we are not making payments on our children! Also, breastfeeding and cloth diapering. These kids will have plenty of expenses when they are older, we can’t be spending all of our money on paper for them to poop in now. ~Beth (bethanne709)
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- Don’t spend money you don’t have! Period! Put a reasonable amount away each paycheck (enough to add up but not enough to break you for that period) for emergencies and/or large purchases you know you’ll be making. ~Stacy Westhoff
- Cook meals at home, using real food bought on sale as much as possible. Buy in season foods which have been processed as little as possible to make your meals from, and you can eat healthier and cheaper than eating out anywhere. ~Vicki Fisher
- We bought used cars, and we’ve been driving them forever! My ’01 Chevy Venture’s been paid off since 2004 has 211,000 miles on it. Hubs’ ’99 4Runner has 190,000 miles on it, bought outright in 2008. As my Dad always says, “an occasional repair is cheaper than a monthly payment.” ~Amy Jones
- Add 1/12 to each monthly mortgage payment i.e. if your payment is $1,000 pay $1,100 (extra $100 towards principal). Cut years & thousands of dollars off your mortgage. ~Debbie Duffy
- We like Dave Ramsey’s debt free snowball. You make minimum monthly payments on all debts but using any extra money to focus on paying off the smallest balance first and once you’ve paid that debt off you apply the minimum payment that you were paying on that bill to the next smallest debt and so on creating a snowball effect. ~Rechelle Washington
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- When you get a raise at work, either up your retirement contribution by that percentage, add that amount to your debt repayment or set up a direct deposit for that amount of money to automatically go into your savings account. You lived without that money before – keep doing it! ~Alicia (aliciawithay)
- Don’t try to keep up with the Jones; it will make you go in debt. I have never felt that need to compete with others. ~Joan (jfgems)
- Work twice as hard and spend half as much as everyone else. ~James Gentner
- Live on a envelope budget! Simple & straight forward! ~Stacy (fausett8)
If that list doesn’t give you at least a few ways to live more frugally, go back and read it again! But I’m sure these aren’t all of them. What tips do you have for living debt free? And if you need some clear, simple to follow direction on how to get out of debt, check out my book. Make 2014 the year you kill your debt and live free!
I have a different opinion on using credit cards. I understand paying cash when a family is just starting out and not good at following a budget but once you are disciplined you are missing out on the rewards credit cards offer. We live debt free also but I put every penny we spend on my credit card and PAY IT IN FULL EVERY MONTH! Between a good sign up bonus and the accumulation of points, our family travels internationally one week a year for free! It has been something we never expected to afford on one salary. However, the trick is to know your budget and PAY IN FULL EVERY MONTH!
That’s great! However, please realize that you are the exception to the rule. 🙂 Most people are not that disciplined and when trying to play the system, they end up getting in over their head. They are one crisis away from ruin – and that’s scary. So, that’s one of the main reasons we don’t advocate use of credit cards – we’ve seen too much bad stuff happen.
Instead of paying $1,000 a month house payment, TRY to pay 500 every two weeks. A 30 Year mortgage will be cut to approx 17 years. Your bank can figure this for you. They don’t seem to like to let you know unless you ask.
I pay a lot more on my mortgage payment each month. As of now, my next payment is due in April for $17. 34 🙂
Of course, I pay every month so the balance goes down. I owe only $25,000 and change on my house now. If I can swing it, I’ll pay it down even more. The sooner I get rid of my mortgage, the better off we’ll be. I have one credit card and if I use it (which is only once or twice a month) I pay off the balance each month. Gotta keep the miles adding up..we are planning to go to Hawaii or Alaska soon. It is really nice to have just a couple of bills..mtg. and the one card. I don’t consider the utilities as actual bills, they are just part of living expenses. Even though we do try to not run the furnace as much unless it gets really cold. I have a electric fireplace that uses much less electricity than the furnace. Amazingly, that really keeps the living room warm.
Several years ago I was quite a bit in debt and I decided to get rid of it as soon as possible. I don’t make a ton of money, but I also don’t spend a lot on frivolous things. However, it IS nice to feel like if I want to buy a new outfit or new shoes or go out to dinner, we can without the stress of not being able to pay the bills.
Oooh, oooh! I see my tip! :o) Loved reading all of these – great tips! Need me some motivation! <3
Thanks for the list – awesome timing! We’re pretty good with our finances (we don’t spend more than we make, only debt is student loans and mortgage, both of which we’re working on) but we had a bad run last year when I had a really difficult pregnancy, multiple hospitalizations and missed a lot of work, so we need to get back on track and build our savings. These tips are helpful.
Also, I’ll admit to being totally excited about my tip being included. I’ll have to add “Contributor to Humorous Homemaking” on my resume! 😉
Ha, ha! 🙂
All of these tips are great, but I just wonder how do you purchase things online without using credit cards? I use credit cards online to purchase items I can’t get locally. I live in a very rural area. I would have to travel 75 to 100 miles to find stores that carry the products I need. I also use credit cards to purchase our homeschool curricula online. Thanks for the great post!
We live in a rural area as well – and I use my debit card online several days a week. 🙂
This post couldn’t have had better timing! Thank you so much for all of these wonderful tips. Hubby and I have decided to get out of credit card debt this year. After so many years of living paycheck to paycheck we have finally been able to settle on a budget that will allow us to dig ourselves out.
Here’s a tip: try your hardest to stay out of the stores, (like department stores and malls especially) unless it’s a grocery store [where you make a list prior and stick to it] – this will reduce your urge to buy things you don’t need with impulse buys. If you are looking for something specific like shoes or etc. that you might not want to buy secondhand do your research for sales on that item to save money.
Great tips!! Thanks for the post.
I am 55 years old and I do not have any debt except for a home equity loan left over from my late husband’s business. I believe God has given me wisdom and a clear plan regarding my finances. My first mortgage on a $200k house, 2 vehicles (2008 and 2009) are all paid for. When talk of finances comes up and I tell how I pay on my loan people are like WHAT?!? I am very disciplined with this. I pay on the home equity loan EVERY DAY. The credit union adds interest every day so it makes sense to pay it the same way. Not all banks or credit unions allow you to pay this way but mine does so I take advantage of it by paying it every morning online. I multiplied the monthly payment by 13 (for an extra payment each year) and divided it by 365 days so I would know how much to pay each day. It came out to about $28.08. 1-1-13 I bumped it up to $28.50 per day and paid that amount. As of 1-1-14 I bumped it up another 50 cents per day so now I am paying $29, $1 per day extra. That does not sound like much and it is easy to do financially. And it sure is exciting when I see the principle dropping DAILY. And, in the long run I am paying way less interest overall. This $65,000 loan will be paid off in about 7 years (my goal is 5 years) instead of the original 10 by paying it the way I do. And, I plan to bump up the daily amount when I get my next raise, July 1st. Hope this gives you something to think about regarding any loan. God bless. P.S. I check this site DAILY also. :~)
I’m so excited for this new year! Y’all know our story, how we have a lot of debt, live with my inlaws, and have a car note we can’t afford. I can’t stress enough the importance of tithing! It hasn’t gotten us out of debt…( God didn’t put us in debt!), but I believe that because we have always tithed, God has NEVER let us go without what we NEED! (By tithing, I mean 10% of gross) Often when my husband works overtime or I clean a house for extra money, we aren’t able to put that money on debt because we need it for gas or groceries…but God always provides! Three years ago our debt totaled more than $60,000!! Right now, we’re at $23,000. It’s our year to be debt free! My husband and I are working harder together to make it happen! I can’t thank y’all enough, Barry and Stacy, for all of your help and encouragement.
Hahahahaha, I can’t believe my comment made it to your list! 🙂
One other thing that might help our financial situation and get out of renting is to look into land buying. Houses around here are (at the cheapest) 7-8 times our family income per year. So we thought that perhaps we could take out a loan or line of credit (at the cheapest interest we can find… we can’t get a mortgage for buying land), buy a cheap piece of land, get a septic bed & well built there, and throw on a cheap ($5000) trailer (errr.., politically correct term is “mini-home”). Hopefully the entire loan will be about 1.6 times our yearly income. Then we want to pay it off as fast as we can, and then save money to build a house. And we can rent out (and fix up) the trailer to our in-laws when they retire. 🙂
At least, that is my thought. I’m tired of wasting money on rent! And yet, we don’t want to enslave ourselves to buying a home we can’t afford!
Thank you for this post! After dealing with some difficult circumstances, we have recently just completed our first hurdle of getting on top of things enough again to pay everything on time. That in and of itself feels good. We have now set a goal for this year that is challenging yet not so huge that we set ourselves up for failure: $1000 in savings and 1/3 of our debt paid off by the end of the year. The great thing about goal setting is that as long as you work hard, you are going to come out a winner one way or another. If we meet this financial goal we will be extremely happy. If we exceed the goal we will be ecstatic! But even if we don’t quite make the goal mark, we will still be way ahead of where we would be had we not purposed to do it in the first place, and that is still a win in my opinion! ~Candy
Our mortgage is 1,045, with everything wrapped in(taxes and insurance). Would it make that much difference in the long run to round it up to 1,100?? We have had the house a little over 4 years, and it is a 30 year mortgage.
Absolutely! That’s $55 per month or $660 per year and you’ll be avoiding interest on that with each payment. I just emailed you an amortization schedule Barry made plus instructions how to use it. That will tell you (within reason) how much you’ll save over the course of your loan…but it will be a LOT.
Stacy, is it possible for you to email me the amortization schedule as well? Do you need any particulars, or will it be a general schedule that will apply to any mortgage/debt schedule?
Thanks so much for your and Barry’s insightful articles on the subject. They are most helpful!
blessings to you both,
Christi
Sure thing. I just had Barry send it your way. Instructions included.
Oh, I would love one also!! We love Dave Ramsey here at our house. Even went through his program. Best thing ever!! We had our oldest son go through it when we were homeschooling him. To this day he is proud of the fact that he and his wife have no credit cards. I just started a new job to help get us out debit and have a 10 yr or less plan to pay off our house. This mortgage schedule would help so much. Thank you.
On its way!
can I send my email address to get this schedule you speak of?
On its way to you…I have your email address from your comment profile.
Thank you so much for your wisdom and insight! We are on our last debt….the mortgage! When my husband lost his job back in May, we had to stop putting extra on the principle, but not having any other debt also made it manageable to live on our income! God is good!