Credit Card Debt Free At Last!

September 28th, 2007

After a year and a half of hard work to pay off my credit cards I am finally making the last payment this morning. My only remaining debt is school loans at 3.5% interest and a car loan at 4.5%. Getting out of debt has been one of my primary goals, and I’m really excited to have achieved it.

So how did I eliminate my credit card debt?

To be honest the single biggest factor in paying off my credit cards was making a significant (to me) amount of money. Slightly less than two years ago I was just out of a masters program and was making a paltry salary as a part time adjunct faculty to a state college in Massachusetts. But in January of 2006 I moved to New Mexico for a great job doing economic analysis and began making significantly more.

I can’t directly take credit for that, but I can take credit for not allowing my lifestyle to expand to meet my income. I’ve done a number of things to fight the desire to buy things that have cut my expenses pretty drastically:

Living with roommates. Though I didn’t really know anyone in Albuquerque, I always moved into places with roommates. This was less enjoyable than living alone until my girlfriend and I got a place together, which is the best of both worlds.
Resisting big ticket items. I’ve succumbed to an Ipod shuffle and a first gen Ipod nano, but have resisted buying an Xbox 360, a Playstation 3, a big flat screen TV and a speaker system (I really wish I was playing Halo 3 though). I haven’t upgraded my Toyota Corolla to a more expensive car with a bigger monthly payment.
Cutting back on small luxuries. I’ve been less successful at this. My chai consumption is still out of this world, and I typically spend more money per month eating out than I do buying groceries. I’ve made improvements, but I could do even better.
Tracking my expenses. Tracking your money does have any direct money-saving effects, but it put me in a much better position to know how much I was spending on different things. What I saw initially appalled me and provided me with much of my motivation to reduce expenses. Aside from living with roommates, this has been the most important factor.
Discussing finances. I’ve gotten some good ideas and motivation from personal finance blogs like The Simple Dollar, Digerati Life and Get Rich Slowly, but I’ve also talked a lot more about money and finance with family and friends, sharing ideas and providing further motivation to reduce spending.

The Story of Frugality

I’ve talked a lot in the past month about metaphors and how the stories we tell about ourselves affect many of our decisions. A big part of my journey to being credit card debt free has been re-aligning my view of myself to be more frugal and fiscally conservative. This is probably a natural progression as I get older, but I’m much happier with a story about myself as a frugal simple living advocate than I was with the self-story of a consumption-driven post-college kid.

-zot

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