Day 4 of the January Money Diet – Get Serious About Elminating Debt

In case you’ve just joined us, the January Money Diet is a challenge to take a 31-day break from nonessential spending. You can learn more about the money diet here — and jump right in!

Pay off debt at Happy Simple Living blog

What you’re looking at above is the actual piece of paper that hangs in my office, right in front of me where I can see it every day, that shows my outstanding credit card balance: $2,964.

About 18 months ago, I finally got serious about getting out of debt. I had balances on four credit cards, and the total I owed was (I’m a little embarrassed to admit) over $11,000. After making a realistic budget for paying everything off in two years, I decided to follow Dave Ramsey’s Debt Snowball Plan. I focused on aggressively paying down the card with the lowest balance first. Once it was paid off, I cancelled the card. Then I moved to the card with the second-highest balance, paid it off and cancelled it. You get the idea.

Today I have one credit card, which I never use. I carry a debit card instead, which doesn’t allow me to spend money I don’t have. You can probably imagine how motivated I am to pay off that final $2,964.00 and be debt-free.

When I was in financial dire straits in my 20’s, my friend C.J. and I made a deal because we both wanted to get out from a pile of credit card debt we’d racked up. She gave me her credit card for safekeeping, and I gave her mine. If either of us wanted to use the card for a purchase, we had to convince the other that it was worthwhile. Inevitably, the answer was “absolutely not!” or at the least, “wait a few days.” It was a good system, and you might try it if you have a like-minded friend. I’ve even heard of people who freeze their credit cards in a chunk of ice in the freezer so they can’t get to them right away. You may want to take such drastic measures if credit card spending is a temptation.

If you’re still in debt and longing to get out, I encourage you to make a plan for paying off your balances. You may wish to join The Debt Movement, as I have. It’s a 90-day group effort to collectively and significantly reduce debt, with a group goal of paying of $10 million in debt. If it helps you to have a visual reminder, you might consider making a sign like mine to remind you of your commitment.

Homework Assignment #4: What would financial freedom mean for your life? Write a few words in the Comments below about your goals and hopes for getting out of debt. If you’re already debt-free, tell us how you achieved that goal and how it has affected your life.

Here’s to our success. I’m pulling for each and every one of you, and we can do this!


Win a Deluxe Happy Simple Living Gift Basket

In honor of the January Money Diet, I’ll be giving away a gift basket chock-full of home and garden goodies plus several books at the end of the month. On January 31, 2013 I’ll draw one random name from everyone who commented during the month and that lucky person will win the gift basket. I hope you’ll stop by often this month and share your own ideas, thoughts and experiences about taking a 31-day break from nonessential spending.


About Eliza Cross

Eliza Cross is a full-time writer and the author of a dozen books about food and home design. She has been blogging about simplicity and sustainable living since 2006.

Day 4 of the January Money Diet – Get Serious About Elminating Debt

  • Marielle Quint

    wow, great job with your debt, and true, using debit cart is way better 🙂

  • melissa

    We do our best to live below our dual income. We chose a smaller than (norm) home and keep our cars as long as possible. I have a problem with running to the thrift stores since I always find what I need and several other items. I am trying to curb the over spending. We use a credit card for everything and pay it off monthly but I hate that the balance is as high as it gets. We have a 15 year old daughter and I always fall for the I NEEDS! She loves thrifting but it still adds up so fast. Needless to say she isn’t overly excited about this months project but she said that it is a good challenge for her too. It’s too easy to just run out and spend $20 and then realize that when you do that 7 days a week it adds up fast. I have an addiction that I am hoping to get some control over so this month is a detox period for me. My husband just says dont go to the stores. It’s not that easy for me. I think I can, I think I can.

  • Stephanie

    We eliminated debt (apart from our mortgage) using Dave Ramsey’s Debt Snowball. It is a wonderful system. We made our last payment in December 2012, it was a great feeling 🙂 We are now focusing on using the money to overpay the mortgage as that has a huge impact on the amount of interest we will pay over it’s lifetime. All the very best with your debt – it is great to have that visual reminder!

  • The most I had was just over $3,000 in credit card debt, but I believe any amount I have is too much if I can’t pay it off in the same month I use the card. I had two cards, and paid the smallest one first then doubled up and paid as much as my budget would allow until I had the other one paid off. What a freeing feeling it was to have no credit bills in the mail each month after that, hopefully you will feel that soon.

    One note about using a debit card. My son, with the birth of his first child decided not to use his credit card any more and live with only his debit card. he got out of work early one day and decided to do all his Christmas shopping. When finished he called his wife to learn she was exhausted and offered to bring dinner home. To his amazement when he went to pay for dinner the card was declined. The reason, he went over his permitted number of uses per day. Another patron stepped up and paid for his dinner.

  • My husband and I have a car loan to pay off. Though we’ve had the car for less than one year, our goal is to pay off half the loan by the end of 2013. We are re budgeting and strategizing to achieve this. Once it is paid off, we’ll be able to save some of the money that was formerly used for payments in the hope we’ll be able to buy the next car we need without a loan.

  • Bry

    I have one credit card and student loans to pay off, but even so I still expect to have everything paid off in no more than five years. After that I can have all sorts of crazy sustainable fun! 🙂

  • Martha

    Debt free would mean more opportunity for travel and fun. We’re down to the big debt only–the mortgage and that is a big one to conquer. Still we try to save our pennies and throw them at the mortgage.

  • Deborah Gore

    Being debit free would mean knowing that when it came time to retire in 10 to 15 years, that I could live very comfortably on my pension.

  • Bobbie

    My mortgage is my last debt. After years of working at it, everything else is finally paid. Somehow, the mortgage just seems overwhelming, but I have resolved to work on paying extra on it each month this year. Being debt free would mean I could retire early and work as a volunteer for a cause I’m passionate about.

  • Peter

    I too stopped using credit cards. I miss getting the points that the cards gave – I often bought new books with those points on my Amazon Card, but the freedom I feel now is totally worth it. I love that you have that paper hanging in your office – visually seeing it would keep me motivated!

  • I like the idea of not buying the extras. Meals out, coffee at CBTL, a toy or two from the dollar bin at Target. I think, in our case, we nickel and dime ourselves to death. Then when something big happens, like our heater goes out during one of the coldest winters in a long time (don’t worry for us too much we live in SoCal) we don’t have the money there to replace it right away. So I guess financial freedom to me would mean being able to have money when the big and necessary items go on the blink and they either need to be fixed or replaced.

  • Thanks to all of you for sharing such honest responses. We may be at different stages, but we all share the same goal. We CAN take control of our finances and enjoy the peace that comes from living within our means.


  • Christina

    I would like to be debt free. We have a son going to graduate next year. He needs a car. We have six kids who need food, clothes, shelter and more. Lol. With every extra bonus or holiday pay, that will go towards paying off the smallest to the biggest cards, then those cards will not be used, hopefully. I think we are going to be more aware of our purchases. Consume less. No little tokens or trinkets, or unnecessary expenses. In the long run, you may feel great buying that one thing, but in the end, it feels better to be debt free then have accumulated too much.

  • april

    we try not to keep a cc balance that we can’t pay off each month. looming over us is our first car loan and the money we also “borrowed” from our kids to buy a nice car. (nice for us being newer than 10 years old and having less then 100,000 miles). my husband is always wanting to pay it off fast but paying more then we have means we take it out of the grocery budget – my expenses. we make the minimum payments on it, pay extra to the student loans, and pay minimum to the mortgage. i have this dreadful feeling that we’ll pay off the car loan(s) and end up with the other car (our family car and so more expensive to replace) breaking down and in need of replacement. if i could rewind the clocks, i never would have bought the nicer car. . . . this debt is killing me.

  • CJ Holloway

    I am the friend that Eliza traded cards with and I haven’t had a charge card in over 5 years. I recently purchased a home and that along with some college loans are the only debts I have. There is such joy and peace in knowing that I live within my means.Recently my daughter said that it is one of the things she admires most in me is the fact that I have self control! You can do it!

  • Victoria S Andrews

    My husband and I made the decision to pay off the house when we refinanced to get a lower interest rate and found that after paying for 9 years on a 30 year loan, we had almost nothing off the loan. We just committed to putting extra towards the house payment, first $200, then $300, then $500 extra a month. Our refinance was for 15 years and we paid the house off in 7 1/2 years! We also have a pact that no car we own ever cost more than $4000. Of course my husband can work on cars so that does make it easier when we get old cars. I know that getting an old car is not possible for some, but it has made our personal property tax very low! We also do not buy anything on the credit card that cannot be paid off each month. That alone has saved us plenty. We still are working to save. That has been the hardest for us.

  • Molly_MacD

    Being free from debt ( mainly our mortgage) would mean being able to farm full time instead of work at a office job

  • GC

    We have a debt payoff plan in place already. I would warn against cancelling paid off credit cards as it truly adversely affects your credit rating….hard to believe-eh?

    Paying it off is great, but if you cancel the card it leaves you with a low ratio number (your debt against your available credit number) that lowers FICO scores down significantly. Of course, we all plan to never have debt again, so maybe it doesn’t matter. However, with medical bills as high as they are anymore, and less and less insurance companies paying all of the charges, it is very likely a major illness could cause one to charge again…sad, but true.

  • We have a mortgage and a small loan on our RV. Our first goal is to avoid any additional debt. Our second goal is to pay off the RV loan. Our third and biggest goal is to pay down our mortgage.

    To be completely out of debt – including the mortgage – would mean freedom to do more homesteading, less work away from home, more travel, etc. We’d work toward our own goals instead of chasing dollars.

  • Anja

    I used Credit Cards until July 2010, at that point I had debts of about £5.500 (CC, store credit, backdated council tax). I was getting no where on my way to a frugal life. I physically cut my crdit card in halfto stop using it.
    I then calculated the max amount I could pay off every month and did that. For a year I lived on the basics but after that year I was debt freee (I posted about it at that time

    I have been debt free ever since July 2011.

    If I want something I save for it until I can afford it or don’t buy it at all.
    Since moving to Germany in August 2012 I own one credit card, as I can’t use my German debit card for some internet purchases. The credit card I have is a pay as you go card, which means, I put money on it and can only use what I have put on, that way I don’t build up debt

  • Joyce

    My husband has always wanted to remain debt free. Although we did incur some debt when our children were younger, the only debt we currently have is our car. It feel wonderful. You are doing great with yours. I would love to win the basket. Thanks for having the give away.

  • Goldeneer

    I love your idea of exchanging your credit card with a trusted friend in order to keep both of you accountable.
    My method to keep myself motivated to pay off the mortgage is to keep a list on my fridge showing how many payments I have left.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>