Smart SpendingSmart Spending

'Room to breathe has no price tag'

Finally becoming free of debt is a huge emotional relief.

By Donna_Freedman Oct 1, 2009 3:12AM

A month ago today, I became debt-free – made the last payment to a relative who had lent me some money. This loan had allowed me to throw a big chunk of cash against credit card debt accrued during divorce proceedings. (Lawyers bill by the hour, you know.) 

Once the credit card was paid in full, I started repaying the family loan. As money came in through diligence or chance, I’d let it build to $300 and then write a check. I'm not sure why $300 became the magic number; it just sounded good.

Now I'm debt-free: no student loans (I'm blessed with a scholarship), no car payment (please let it last another six or seven years), no credit card debt (and there won't be any more).

It feels about how you'd think it would: pretty darned great.

'A perpetual grin'
This relative wasn’t dunning me. But it bothered me to owe money. Some people count sheep; at night I would lie in bed counting ways to stretch available funds to reach the next $300. 

Reading some postings from a Smart Spending message board thread, I found others who have recently come to share this worldview. 

A reader posting as "luba30" changed her life in just six months. "I had no savings, no budget, no retirement, living paycheck to paycheck," she wrote.

So she created a realistic budget that prioritizes retirement funding and a savings account, while allowing for some discretionary spending for her and her husband. Currently they have more than $2,500 in retirement funds and thousands more in savings. And luba30 has "a perpetual grin." 

Another reader, "Pepperdoo," hit the wall seven months ago. It happened when she paid a few bills -- not all of them -- and realized she and her husband had $25 left. For two weeks. 

Pepperdoo started keeping track of every penny spent. She and her husband packed lunches and ate all other meals at home, allowing themselves $40 for groceries every week. Pepperdoo also combed the Smart Spending message board for tips on economizing, and threw whatever she saved at vehicle loans. Their car and truck are now paid off and the "extra" $500 per month goes into savings.

"Room to breathe has no price tag," Pepperdoo wrote. "It's hard to make the changes at first, but once you do you'll see results."

The choices we make
Without that family loan, I still would have paid off my credit card debt, eventually. But I would likely have paid several hundred dollars in interest charges. I also would have fretted, a lot.

Now it's my job to continue to live below my means. Not only will that keep me out of debt, it will allow me to put aside some money. I'm building an emergency fund, and recently started a Roth IRA to augment the retirement benefits I accrued during 17 years of newspapering. And some day I'd like to have mortgage debt like everybody else.

My efforts are neither unique nor remarkable. Plenty of people out there have been standing up under much heavier debt loads. A reader named "Kalikala1980" is paying down a credit card balance, a car note and a grad-school loan. To get there sooner, the reader has cut back on all unnecessary spending, while still faithfully funding a retirement account.

"It's all about the choices you make and how much you want to be debt-free," Kalikala wrote. 

So if you're working to pay down debt, keep at it. If you backslide, start over. And if you think you'll never get out of debt? Please try it anyway. Get personal-finance books from the library, contact the National Foundation for Credit Counseling,  read the MSN Money message boards for tips and support. 

Kalikala phrased it quite nicely: "While paying off debt is painful, the freedom of being debt-free is indeed priceless."

As we say in New Jersey, I'll testify to that in court.

Published Nov. 14, 2007


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