It’s the number one item on my Life List and I’m uber serious about it. I listen to and cry with each and every caller who call’s in to the Dave Ramsey Show and shouts “WE’RE DEBT FREE!”, there’s just something about that kind of freedom.
We’re currently in Financial Peace University and loving it (I am a geek, I love this stuff) and Aaron’s working on his enthusiasm. However, from the first class we realized there were a couple tricks of the trade that we had learned along the way that weren’t common knowledge.
Like for instance, if you have medical debt, it does not affect your credit score. So, yes, you should pay it off but working out a long term payment plan (with no interest, they don’t charge interest) is very easy to do, most of the time. And often, if you have a large sum and have saved a quarter to half of it – you can call and tell them you have X amount and would like to settle the bill immediately with cash. They love that word. Cash.
We did this a few times when we were going through the hospital fiasco after our second child’s birth. Little did we know when we found out we were pregnant that we weren’t carrying maternity coverage. A little over 15,000 later we have a healthy baby and no hospital bills. From that debt, WE ARE FREE!
If you have credit cards you can generally get a lower interest rate just by calling the number on the back of your card and asking for one. Some times even to as low as 9%. Just ask!! Even if you’re behind or have HUGE monthly bills. If you can tell them that you’re working on a plan to pay the card off, they’re generally willing to work with you – at the end of the day, they just want their money. Be nice. It pays, to be nice.
Credit Unions have the best rates, typically speaking, if you need a loan.
Our current debt is a car payment and the loss we took on our home when we sold it. We’re very fortunate not to have credit cards, we cut them up years ago and never went back. I generally don’t even carry my debit card. It’s sits in a block of ice in the freezer. We typically pay with cash. (We try really hard, any way.)
There are months when I’m lazy and don’t get around to getting to the bank to get cash for our envelopes but I try really hard to do this, it makes the budgeting easier for us. It keeps us accountable.
We also use Google Docs to share our budget back and forth and we have a “general” budget that we look at and fill in every single month.
It’s easy, and it gets easier.
Other tips? Ideas? Tricks of the trade? How have you been creative in your saving or spending to get out of debt or save up quickly for a purchase you knew was coming (say Christmas??) ???