Wash credit card debt down the drain!
A habit of acquisition can lead to too much stuff and credit card debt. Over time I conquered my habit of acquisition and, as an added bonus...credit card debt. By embracing Elective Frugality both these problems have been alleviated. It was a long road home to a more balanced and debt-free lifestyle, but it was worth it.
I gradually sank into credit card debt when I retired on 38% of my salary...and my spending habits remained the same.
Credit cards are all too easy to acquire. How many do we really need?
Three credit cards all with high limits and I had used all three lavishly and often. I realized that I already had every thing (!) I needed to be happy and comfortable, and therefore had no good reason to be in so much debt. In fact, I had too many things!
The problem was my longtime habit of acquisition built up and liberally and unceasingly fed for several decades - a habit I had not altered although my circumstances had changed when I retired.
Realizing that my spending habit was needless and getting me deeper in trouble, I decided to do something about it. Immediately!
Looking up the interest rates on my credit cards, I selected the one that had the highest rate...around 29%. Ridiculously, scandalously, criminally high - yet legal! Right?
I was essentially contributing to corporations', CEOs', and shareholders' wealth at the risk of my own!
I started making extra payments on the high interest card while continuing to make the minimum payments on the other two. It took time, several years, in fact, to pay off that first card.
Then, the next card, with about 19% interest was on the chopping block. This card paid down quicker by making extra payments along with the approximate minimum payment I'd been making on it. Finally, the last card - about 13% interest - and this one was paid off in a little over a year. Between five and six years to pay off these cards! And, I'm glad I did, too. It was freeing on a number of levels. Peace of mind being one.
This was over 10 years ago and I've remained committed to leaving credit card debt in the dust!
I've heard that canceling a credit card account negatively affects your credit score, better to simply cut the card up so you won't be tempted use it, but maintain the account. Also, it helps to not use the credit cards while you pay them off!
My absolutely unbreakable rule, now, is to never, never, ever charge more on any card than I can easily and comfortably pay off, in total, at the end of the month in which the item/s were charged. I don't pay interest on anything to anyone! Ever.
Collecting interest on savings accounts, investments, etc., now that's a different story! However, have you noticed that the interest you pay a corporation is vastly higher than interest you earn from corporations? This is no accident!
I remember a time in the long distant past when my savings accounts and CD accounts, money markets, etc. paid reasonable interest. Now? We're lucky if we land an account that pays a fraction of a percent interest.
I also remember when interest on credit cards could be deducted from income taxes. Gradually most of the deductions for "the people" have been eliminated, leaving only abundant perks for multi-millionaires, billionaires, and corporations. This is no accident!
Here's MY conspiracy theory. The rest of the conspiracies - political and otherwise - are merely for the purpose of distracting us from what is really going on!
We vote for our representatives and senators in Washington DC. Okay. But...here's the thing! After we vote them in, they (most, not all) are bought and paid for by corporations and monied special interest groups who wear a path to their doors, offering our elected officials perks and money, and pay for incumbents' campaigns.
Republicans vs Democrats...that's a a distraction, friends. They're both bought and paid for. Whichever side is in majority at any given time, is the one the Big Pockets toady to.
All the political diatribe and partisanship with their two propaganda channels (FOX and MSNBC come to mind along, with a few others) spouting outrage and fear about the "other" side. That's the distraction!
Be suspicious of a "news" channel that doesn't report world or local news, weather, etc. Twenty-four/seven political channels are propaganda. At best they are irritatingly entertaining. And, they're owned by those with a vested interest in whom we vote for.
If we can be made to play politics like a team sport, or to fear and hate the other side, we lose and the Big Pockets win. Sadly, I don't think this will be fixed anytime soon...not as long as there's so much money in the political system.
Big Money $$pays$$ to play in D.C. and legislation is passed to benefit the 1% of the wealthiest in the Nation. As an example...the recent "tax break" that was passed. Don't get me wrong, I'm happy to have my $40 extra dollars a month. The catch is that while my/our tax break will expire, the part of the tax break that benefits the truly rich will not expire. Fair? Hmmmm.....
The rest of us are losing ground either rapidly or gradually. Getting rid of debt gains a little of that ground back. Getting debt-free also brings peace of mind. There's no worry more grinding than wondering where the money will come from to pay bills. Or, to have to work long hours to pay for excess stuff, while simultaneously missing out on time off and vacations, being with family and loved ones, etc.
The good news is that while Washington DC is playing the money game and having a free for all, our local governments are generally ticking along doing their jobs quite nicely. Okay. That's my conspiracy theory in a nutshell and I'm sticking to it!
I now embrace the concept of Elective Frugality. I buy what I truly need when I need it, mostly for cash or using a credit card IF I can pay the entire amount when the statement arrives. And, I've re-evaluated what constitutes a need.
Food. Shelter. Transportation. Security. Comfort. These are needs. Everything else is elective on a graduated scale.
Excess stuff. Stuff I don't use. Won't use. Or, that has an "emotional" appeal is no longer in the "need" category. Therefore, I don't keep it. Someone else needs it or wants. Let it go.
Re-cycling. Re-purposing. Re-using. These are my new rules for acquisition the majority of the time.
The concept of Elective Frugality is a "getting-free-of-debt" strategy that we'll revisit in upcoming posts. Basically, I restrain my spending in most areas so that I can afford to buy the few things I need and really love (these will vary from person to person).
We all need a little luxury from time to time lest life begin to feel...impoverished, grinding, and harsh. The problem arises when we lavish ourselves with needless acquisitions - what I call "hobby shopping" which is based in emotional choices, impressing others, and boredom. Oh, and also by taking marketers' and advertisers' word and exhortations that we need their stuff. Mostly...we don't!
Purchasing what we need, selectively, thoughtfully, feels...just right. And, we maintain our financial freedom from debt! And that feels right, too!
To purchase an item without going into credit card debt and the worry and guilt such debt entails makes that item all the more enjoyable.
There is freedom from credit card debt! The road back to financial freedom from the bondage of credit card debt is hard and takes commitment. But, it's well worth the journey.
It may seem daunting to spend five or even 10 years climbing out of credit card debt, but if a start is made the five or 10 years will pass. Where will each of us be at the end of that time? Still in debt, or even deeper in debt? Or, debt-free?
The only ones that win from credit card debt are the Big Pockets! Why keep feeding the beast that impoverishes us? While they live in their high-rise penthouses and build their "cathedrals" to ego and acquisition, we can find peace of mind.
I have no wish to impoverish the Big Pockets. What's theirs is theirs, but I want to keep more of whats mine, too. I simply have no wish to be eaten alive by the Big Pockets via credit card debt. I just want to live free and happy. Most of us wish for that, too.
Each time you make an extra payment toward a debt-free future - and finally, finally pay down that last credit card - is a celebration, a move toward financial peace, personal plenty, and real security.
The real luxury, that leads to LIFE well-lived, is freedom from credit card debt!
In the next post we'll explore more fully the ideal that is Elective Frugality.
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Abundance is..."flushing" credit card debt...finally...once and for all!
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