Amazingly enough, many third and fourth generation americans (I am fourth generation; my great grandparents came from Ireland and Italy and Germany in the late 1800s) did not have their values of thrift passed onto them by their parents and have had to learn it ourselves, all the while fighting against the influence of one of the greatest consumption-inducing cultures of the world–the mass media advertising and consumption culture.

“Immigrant’s” suggestion to only buy absolute necessities for one year is a fantastic prescription that will effectively kill any tendency to spend money on unnecessary stuff that you cannot afford (and if you aren’t on track to provide for your long term financial requirements including retirement, you really can’t afford to spend that money. But someone will always be happy to sell you something to take some of that cash for themselves.)

Maybe I’m missing something, but something about these figures doesn’t make sense, particularly when contrastedw ith your epiphany that you had when you came home and all the bills added up to more cash than you were going to have for two weeks and you went up and sat with your infant son and decided to make a change. Or perhaps I am confusing two different time periods in your life that you have written about separately.

I guess it’s immaterial as the message remains the same–if you have resources available to you, you can focus your efforts and achieve financial goals if you take it step by step and work at it consistently.

Much thanks for your works.

I’ve never owned a new car in my life, in the last decade I’ve bought few really nice new clothes, I own no jewelry, I’ve never owned a house … I just don’t think after a lifetime of hard work and frugality I should have to deny myself those things I do love. Life is too short.

So I find my own ways to get those zero balances.

My problem is a tiny income, period. Almost all of my credit card debt is due to paying for necessities my paycheck just doesn’t cover. I was working abroad where I made good money and twice paid off large credit card bills that way. Now I’m back here making peanuts.

Time to go back to Asia! I’ll have to use my cards again for the initial expenses, increasing the debt temporarily. But by this time next year ALL of my debt will be once again paid off, just like before, and I’ll finish the second year with savings in five figures. How about that?

Sometimes you have to look outside the box (border) for answers.

This is not a good way to get out of debt. US Copyright Law provides for a reward of up to $25,000 per instance of infraction, that would add to debt. I hope Matt reads this.

One thing that helped me rein in my spending: using a cash envelope wallet system for the spending categories I do “out and about.” I figured out the right amount of money per pay period that I needed to fill my envelopes: food, gas, entertainment, and blow, and that’s it. It makes me pay attention to my spending and once an envelope is empty, that’s it, game over until next payday.

Everyone will have different amounts that will work for them, but for me it’s $100 food, $100 gas, $80 entertainment, and $80 blow. Usually I’ll have a little money left at the end of the period, and sometimes a lot. This last period I ended up with $230 left over out of the $360! So I put that in an envelope in a safe place at home, as a back-up emergency cash stash, or to put into the savings account, or to set aside for some upcoming business/recreational travels. I usually drive a lot more in the summer, to the lake to go rowing, so it could be the booster gas money envelope. It’s nice to have “cushion.”

I just have $6400 of student loans left, and I have $7500 in savings while I weather some uncertainties in life–finishing cancer treatment, making sure the medical bills get paid, seeing if there’s going to be layoffs in a pinched-budget time in our state. A paid off debt can’t pay the bills if I need some survival money to tide me through to the next job. This savings is sleep-well-at-night money. Nothing is as comforting as a steaming hot pile of cash.

When I feel my situation is secure again, I’ll pull the trigger on that student loan, because twenty years of debt slavery is quite enough, thankyouverymuch!!!

Best of luck to everyone as they continue the journey to FREEDOM!!!

It’s hard to break those habits. I have been eating out for years and blown TENS OF THOUSANDS eating at restaurants but I can’t seem to stop.

There was a post about that very topic a week or two ago. Look through the archives.

An interesting topic for discussion would be how to bring some balance to the process for those who get so “into it” that they are forgetting that there are sometimes reasons to spend money.

My problem is I think spending ANY money is “bad.” So I catch my reflection in the mirror and notice that my business suit is all frayed in the elbows, or that my blouse has a stain I didn’t notice under normal lighting.

My debt was from surviving in between jobs, NOT from buying DVDs or toys. I am still wearing clothes I bought 10 years ago. But I have been throwing thing away as they become truly too bad for even me to wear them, and not replacing them.

This is hard.

I bought clothes last night. I cannot remember the last time I bought clothes. I needed turtlenecks and they are on deep discount now.

I spent $25 for four high-quality articles of clothing. It still felt “wasteful” and “unfrugal” and wrong.

I am sick of walking around in beat-up clothing. I am sick of living in a house that needs repairs and I’m afraid to spend any money.

Trent I am really not trying to take one iota of credit away from you — you did a great thing and a difficult thing when you decided to turn things around.

But it DOES help when you already HAVE the clothes and the toys. I do the thrift store thing, trust me. Where I live it is usually better to wait until the malls do the sales at the end of season. I could pay $12 for a used turtleneck at a thrift store, or $10 for a brand new one at the end of season.

Anyway, just needed to vent a bit. I feel like I cannot get ahead.

In addition to making minor changes to your lifestyle and habits, make a minor change to how you physically spend your money with a reloadable prepaid debit card, like the UPside Visa card. Unlike a debit card from your bank (which many allow overdrafts, getting you into even more debt), you are only able to spend what you put on the card. You are able to fund the card periodically or automatically with allowance schedules, from family, friends and employers. And with multiple plans to choose from, you can find a card that fits you and/or your family’s lifestyle, as you can get the card for yourself or one for family members that are either already in need of debt-help or you would like to teach healthy financial living to, like your kids (as young as 13 years of age).
You can check it at http://www.upsidecard.com/?sponsorship=ecairn3

Thanks
Kari

Just Thanks again….I do appreciate your articles ofcourse some more than others. Keep up the Good Work.
Caroline

Sometimes it can be as simple as deciding you’ll only eat out twice a week instead of five times. Maybe you need cable because of piss poor reception, so you go with the basic package instead of all premium channels. Maybe you’ve just never realized that you’re spending two hundred dollars every week when you go out shopping with your friends or each time you golf and hang out with your buddy’s afterwards. Just being aware of what you’re spending and why can allow you to cut back on some of these things without eliminating them. That difference can add up over time.

On the savings side, while starting big helps, start with something so you have something. I started each child’s college fund with $20 a paycheck when they were born and have raised it $5 a year and usually added $5 if I got a raise or promotion. My oldest is going to have $25,000 in her account when she starts in a year or two. Will it pay for all of her college? Probably not, but will it ease the burden? Hell yeah! If I’d have been intimidated by the 120K tags of projected college costs, I would have never started or continued to save, but the goal was to save what I felt I could, and I have. So if you get a raise, put a full percent or two towards savings or debt so you don’t really start to count on it to “live”. After a dozen years you’ll be surprised how much you’re saving, even if it isn’t the 15-20% figure everyone recommends, even if it doesn’t mean you fit some curve allowing you to retire with 80% of your savings. If you never start, you’ll never have anything.

Finally, don’t be discouraged when you hit bumps. My networth has gone up an down like a yo-yo over the years based on the decisions my wife and I have made, some good, some bad. But because of the focus on getting ahead, the general trend has been up.

I’ve been in a bad debt situation twice in my life. The first time ($30,000), I was just young and irresponsible. The second time($50,000), I failed at an entrepreneurial venture, and my wife came into our marriage with a lot of debt.

One of the key elements to my success both times was making my debt reduction plan easy to execute, and making it visible. You need to know where you are, where you are going, and you want to be able to see and celebrate the small successes along the way.

Keep it up — you’re awesome!