Ways to avoid debt?

These two approaches worked best for me:

I made $9 or $10/hour during my first two gigs, which was enough to cover living expenses and (usually) pay bills. It wasn't until Gig No. 3 that I was able to keep my bank balance consistently in the black and accrue something resembling savings. Since I got here, I've knocked out a student loan and a car loan.

The credit card is my biggest challenge. I'm looking into a balance transfer to make things a bit easier.

 

But Buck, it's not that difficult.

Here's how you avoid debt (most of it anyway) — Don't spend more than you earn.

I was making less than $20k when I started in this business 12 years ago. I managed to find a place to eat, pay my bills and drink a lot of beer on that. I also managed to save some money. Not much, just $25 per paycheck.

It can be done. It just takes a little discipline. If you don't have the discipline, cut up your credit cards so you aren't tempted.

 

Which is why I haven't had a credit card since my freshman year of college. It took me a couple of years to pay that off and I knew I didn't want to be in that position again.

 

Same here.

I didn't get another CC until I was 30. And then it was an AMEX so I had to pay it off each month.

 

Almost a full page and nobody's mentioned Dave Ramsey's plan?

1) The first and most important step is to make a budget. Write down all of your bills and expenses. If you can't afford it, or it's frivolous, let it go. You need food, gas, a car and shelter. You don't need to spend $200 a month on booze, parts for the '68 Camaro that's rusting in the yard or Pop Tarts, or whatever the hell your hobby of choice is. At least, not for a while.
2) Next, try to squirrel a little bit of money away. Maybe $1,000. Tuck it away as an emergency fund. Don't touch it for anything except urgent things, like when the car breaks down or the furnace blows up.
If you can, think about taking an extra part-time job for a bit. Not forever, just a few months or maybe a year or two until you have the emergency fund in place or you pay off a few debts and feel a little more comfortable. The motto "Live like no one else, so you can live like no one else" comes into play here.
3) Pay off the small bills first. When you pay off that $100 credit card, that's an extra $100 a month you have to pay on the card with a $5,000 balance. If you can pay off your car fairly quickly, that's another couple hundred dollars. Start small and work your way up (the debt snowball).
4) Have a written plan and stick to it. You didn't get into debt overnight. You will not get out of debt overnight. However, you should be able to clear most debt except a house note and maybe the car within 3-5 years.

There's some other steps beyond that, but honestly I'm still on the first couple steps. Dude has some good points. He's got a daily radio call-in show and now a daily TV show on Fox Business Channel. Check him out if you can.

 

That's another part of Ramsey's plan. Get rid of the cards ASAP. Don't buy anything you can't pay cash for. As you get further along, that includes big-ticket items like cars.

 

Agreed. I paid cash for my wife's engagement ring. And no, it didn't come from a gum machine.

It was one hell of a feeling paying all that money in cash, knowing I saved every dime.

 

I did the same thing. I was more relieved that it was mine (or, I suppose, hers) and no one was going to come repossess it. We also paid cash for the wedding, honeymoon and a recent vacation. It's a great feeling knowing those debts aren't going to haunt us for years on end.

 

Don't pay $500 for brakes. Cripes.

The most I've ever paid for brakes was like $250.

 

Don't spend money. Ever.

J/K.

You'd be surprised at the things you do that are sink holes for your money.

Those trips to Starbucks where you're dropping $4 or $5 a pop for that double-triple mocha choco latte with extra caramel and skim milk? Try brewing your own coffee at home and save yourself about $50 every two weeks.

Those pizza orders at $20 a shot, that $6 Big Mac meal add up, too. Pack your own lunch, eat breakfast at home, etc.

Unplug appliances you don't use very often. Do you charge your cell phone only once a week? It doesn't need to be plugged in all the time. Use your toaster four, five times a day? Leave it plugged in.

Do you turn your thermostat up and down? Leave it at one steady temperature.

Make one trip to the store to get one item, followed by another trip to get something else? Consolidate as much as you can or walk when you're close enough.

Look for coupons in your newspaper or other places. Use them.

 

SC and I had a discussion on this a few nights ago when I was stressed about a student loan.

I'm trying to get that paid off so I can eventually get away from the sore on my ass that is US Bank.

 

We had a $10,000 line of credit to draw from for our wedding. We used $3,000 and had it paid back in about four months.

Both our cars are paid for. We have a zero balance on two credit cards (both in her name). The line of credit is paid back in full.

We have two bills each month: Rent. Cable/phone/internet.

It's a terrific feeling.