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Learn how to stay debt free

Updated on October 12, 2010

Staying debt free

Once you have let yourself accumulate debts, it is much harder to free yourself from that situation. Do not use your credit card too much over the festive season. Every year people let their credit cards blow right out of proportion, then suffer for it afterwards. Beware, you will pay dearly for those moments of weakness.

Dealing with the debts first: If you have any credit cards, cut them up because you will be tempted to buy more. Several debts need consolidating into one. Then you will incur one lot of interest charges instead of several.

To do this, go to the banks, and ask for the best personal loan, they can offer you with the least charges. Read the small print. Do not be afraid to ask at several banks and compare the different deals.

Get it in writing what they are offering. Ask for different opinions. With the decision made, let them organize payment of all the debts. Do not have the money put into your bank with the intension of paying them out your self, as you could be tempted to spend again and you cannot afford that.

Paying the loan: You can go two ways with this; organize a direct debit, then its automatically taken out of your account. This way you know it is paid.

On the other hand, you can pay it manually, if you can trust yourself to make the payment on time.

One Credit card

It is a good idea to have one credit card if you use your head and use it correctly.  You buy something, then pay it back before the due date.  That way it cost you nothing and it gives you a few extra weeks to pay for it.  This will also help give you a good credit rating.

Now you need to make a budget and stick to it:

You need to write down everything you have to pay for the next twelve months. This means everything. write down every little incidentals, that you may have forgotten. Kid's birthday parties, dentist, pharmacy, school fees. Don't forget the housing loan or rent, insurances, vehicle licenses etc.

You might not know the exact amount, but jot down a rough estimate, allow more to be of the safe side. Add this up.

Divide this total by 52 if paid weekly or by 12 if paid monthly. You will now have an idea as to how much your weekly or monthly expenses will be. Bank this money into a savings account and only draw out the expenses as they become due. This way you will always have enough to pay your bills as they come in.

Before you go shopping, check out the specials, make a list of everything you need and stick to it, DO NOT, be tempted to buy extras. Where possible, buy extras of the specials if you will be saving on the overall article.

When cooking, make enough for two nights and freeze one, do the same the next night, to change the flavor you could curry it or similar.

If you need extra money, why not make some type of craft. You could take this opportunity to clean out your cupboards and have a garage sale. Get rid of those things that you never use, and sell your crafts. Buy second hand, its amazing what a little coat of paint will do. Check out the other garage sales. If you are good at bartering, you could buy things at one and resell it to make a profit.

Make your house loan payment every week if possible, this will not only pay the loan quicker, but reduce the overall cost as well. Instead of spending your tax refund, pay it straight off your loan.

The only way to stay debt free is to work at it and pay cash for things. Do not use a credit card; that makes the banks richer.



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    • Eileen Hughes profile image

      Eileen Hughes 7 years ago from Northam Western Australia

      John,congratulations for successfully becoming debt free I wish more people could do the same as you have. good onya.. well done

    • profile image

      John Cameron 7 years ago

      I am debt free now. It feels great. One important thing is to get help from professionals. I don't won't reveal my personal problem, and I also visited sites like and, but I had to realize I need to pay for my own in-person help, so I decided to see my doctor. I am debt free since a year ago now, and I feel good with myself and family.

    • Eileen Hughes profile image

      Eileen Hughes 8 years ago from Northam Western Australia

      Beats me, Yes they just dont seem to understand what they are doing. Getting into debt.

    • BeatsMe profile image

      BeatsMe 8 years ago

      Nice advice. Somehow, for some people, staying out of debt seems like hard work. And credit cards can really tempt you to buy things you don't really need. :)

    • Eileen Hughes profile image

      Eileen Hughes 8 years ago from Northam Western Australia

      no more mortgage, Very true, people just do not think that they are in so deep. Until it if often too late. Thanks for stopping by

    • profile image

      No more mortgage or other debt 8 years ago

      Stopping the use of the credit cards and getting on track with budgeting are crucial. Taking responsibility for your debts and working to pay them down instead of walking away from them is admirable.

      There are a lot of homeowners that are underwater walking away from their debts and their mortgage which just contributes to the problems.

      Good tips like the ones here will help those that are responsible and want to protect their credit while doing what they should be. Good job.

    • Eileen Hughes profile image

      Eileen Hughes 8 years ago from Northam Western Australia

      abigail33, How true, yes some just take it as a way of life and cannot see there way out of debt and do not even bother to try. thanks for stopping by

    • abigail33 profile image

      Abigail 8 years ago from Dallas, TX

      Staying debt free is a mindset, and you have to make up your mind no matter what that you are not going to borrow money from any source. The borrower is slave to the lender, so do be a slave, and don't borrow.

    • Eileen Hughes profile image

      Eileen Hughes 8 years ago from Northam Western Australia

      Bridgett, thanks very much for pointing that out. Its hard to think of everything, we need all the help we can get thanks for that help.

    • Brigitte Synesael profile image

      Brigitte Synesael 8 years ago from Surrey, British Columbia

      Excellent article Eileen. There's only one thing I would add. When making your decision as to the loan to pay off your cards make sure you can make a lump sum payment or pay it off at any time without penalty. That way you can put an extra $50 or $100 towards it when you can. It'll make a big difference in paying it off faster. Not all loans will allow you to do that. Thanks for sharing.

    • Eileen Hughes profile image

      Eileen Hughes 8 years ago from Northam Western Australia

      no more mortgage blogger, to true, I write articles to help the people that cannot control their debts mainly.

      I use one credit card to pay things. Then pay it back before it costs me anything. Have always done that and then no charges.

    • profile image

      No More Mortgage Blogger 8 years ago

      Things to know about cutting up your cards if you want to maintain a good credit score and history. It helps you if you have more than one card to cycle them and use each one every 3-4 months for gas or groceries. If you go 6 months or more you risk the account going inactive which can hurt your score. If you cancel accounts understand that history is around 15% of your overall score so you can take a hit to your score.

      Eliminating your debt is awesome and helps you get back to building your retirement fund. Limiting your use of credit is wise and if you do it properly you can mitigate hits to your credit.

    • profile image

      Jennifer 8 years ago

      I'm debt free for four months now, and I'm loving it. Although I have one credit card, I rarely use it, and even then only to put gas in my scooter. As a general rule I pay cash for everything, with the exception of gas, because in British Columbia we have a law requiring pre-payment at gas stations, so it's a convenience thing for me more then anything.

      I stopped using multiple credit cards, especially the store specific ones. One credit card is more then enough for emergencies. The card is not kept in my wallet, rather in a secure place so this stops me from impulse buying.

    • Eileen Hughes profile image

      Eileen Hughes 10 years ago from Northam Western Australia

      Very good idea, I needed it for business, now getting out and dumping my cheque account too.

    • MrMarmalade profile image

      MrMarmalade 10 years ago from Sydney

      i cut credit cards out many years ago. Val has debit card and do not have any card