Cash Keeps You out of Debt
By Drew Johnson on Monday, October 1st, 2007 :: 2:31 pmCategory: Financial News
Credit card debt, according to some sources, is the bane of the modern American consumer. If you believe the media, Americans are drowning in high-interest unsecured debt. It eats a large portion of our monthly income and prevents us from building up long-term savings.
Moreover, this glut of debt has spawned several cottage industries: get-rich-quick scammers buying up millions of old debts for pennies on the dollar, who then turn around and make a profit by collecting from consumers who have written off their old debt; debt consolidation lenders offering loans to help consumers shuffle their debt from one place to another, only to realize it hasn’t decreased at all; bankruptcy lawyers who justify their astronomical rates by the new complicated bankruptcy laws.
Debt is big business, and it’s making a small minority of the population very, very rich. The rest of us have to figure out how to deal with our debt problems. I’ve started to find a way to begin to deal with my own credit card woes; namely, I’m trying to use them less.
This is not ground-breaking stuff, so don’t expect a silver bullet or some quick scheme to eliminate your debt right away. No, my solution is simple, some would call it old school.
- I hide my credit cards. Not where I can’t find them, but I put them out of my sight. If I see them every day, I’ll be more tempted to use them.
- I get cash out of the ATM a few times a week. I only get enough to cover my expenses for a few days. If I run out of cash, I don’t use my debit card and I certainly don’t use my credit card.
- I write down every dollar I spend. This helps me keep to a budget, but also, at the end of the month I examine my spending patterns to find where I can cut back. If I see myself spending too much in any one area, I find a way to reduce that expenditure.
So, these three steps help me curb my spending and avoid accumulating more debt. I’ve found most other methods are just a band-aid, and true debt reform comes from changing habits.
Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management, Credit Management and more.
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