There have been a couple times in my life where I was drowning in credit card debt.  The first time was a result of major medical issues and bills and adopting three special needs children with many needs.  We were far younger than we are today and I don’t think the spending would have changed – we would do whatever we have to for our family; but how we get out of debt has changed significantly.  Back then (30 years ago) we had no idea where to begin.  We did eventually get out of debt but without a real plan and it was hard, painful and honestly, I am surprised our marriage survived it.  That was one of the most stressful periods of our lives.

Once we could see that we were getting out of debt I took some classes, and vowed two things – I would never let us get into that situation again BUT if we did, I was going to make sure I had the skills and ability to get us out of it.  Now you know it happened again.  We are a multigenerational household with so many special needs and try as we may – sometimes things get out of control and fast.  The difference this time is that we have the knowledge to not panic, to move forward and get out of it.

Have a Plan – Tuck Associates

So how do we do it?  First and foremost – have a plan.  Don’t just say “I am going to pay off my debt in 36 months”.  We can all say that – but how do you make it happen?  Without a plan I can assure you it will never happen.  I always have a plan to pay off debt and a plan to save money/make money.  Both are essential.  For example – If my plan is to pay off the first credit card by paying an additional $150 per month and I can do that, great.  But what if that is my plan and this month I don’t have that $150?  Then I make sure I come up with the $150 by selling my freelance services, virtual assistance, selling things on Facebook Marketplace, etc… I make sure I can meet that goal however I have to do it.  If for some reason those don’t make it possible then I spend less on groceries, travel, etc… I have a plan for every scenario and so far, I have been able to 100% stick to my plan.  Some months I end up being very active on Facebook Marketplace – such as when I needed to buy a few things for the kids for school.  I was not going to reduce my $150 extra – not a possibility.  I just sold more.

Organize

Track everything – track spending, income, etc… Every single thing… Keep all receipts and log them.  There are free bookkeeping programs out there as well as Excel.  You don’t need to spend a dime.  When you track everything you can see trends, where you can make changes and how best you can meet your goal.

Pay Yourself

No matter what my “pay off debt” goals are, I always make sure I find a way to pay myself first.  You can do one, all or some combination in between.  I have a Digit, Dobot, StashInvest, Acorns accounts and more.  They all skim a little bit off my bank account in one way or another so when I have a need that catches me by surprise – I don’t panic.  I have all these rainy day accounts that have allowed me to painlessly pay myself while also working to pay off my credit card debt.  Additionally, I have a couple online bank accounts that automatically take small sums from my pay every payday.  Easy peasy.  While you are paying yourself – make sure you also save something, anything for your retirement.

Save Anywhere You Can – Tuck Associates

This one can take alot of effort or very little effort.  Depends how much you want to save and how much time you have.  You can save with coupons, rebate apps, sales, etc…

Smart Strategies With Credit Cards

When you are trying to get out of credit card debt, sometimes desperate times call for desperate measures.  There is a progression of alternatives most people go through in trying to find ways to drive that credit card debt problem down and get it under control.  At first just trying to pay them off month to month seems reasonable.  But as the debts mount up, more creative measures are often tried.

• Family

If that is one of the sources of credit card abuse in your family, its time for the family to get together and have a discussion.  Each member of the family must understand that there is such a thing as fiscal responsibility and if credit card abuse is done by any one member of the family, the privilege of that credit card is going to be taken away.

Make sure your kids are aware that you paying their bills is a  privilege and that they are very lucky to be able to start their adult lives with a sponsor like this.  Then give them three jobs they must complete to show they are worthy of this privilege.

While you are working on strategies for the family’s credit card debt – teach them about theirs.  We use FamZoo to give the kids their own debit cards and make them responsible for their own income and spending.  This is a debit card NOT a credit card and works great to teach kids responsibility.

• No More Spending – Tuck Associates

While you are trying to get out of your credit card debt – don’t create any more debt!  This is actually easier than you’d think.  Feel free to freeze some of your credit cards – make them less easy to access.  I choose to keep only one credit card in my wallet to use in case of emergencies.  I placed all others in a separate wallet that I stashed in my bedroom.  Now it has been a year since I have even looked for this wallet and now don’t even know where it is – which makes it really easy to not spend.  There can be credit card incentives such as points and cash back that will save you money in the long run but they take discipline to keep your spending habits in check.  There are things to watch for when using credit card points – stay in control.

• Speak to Credit Card Companies

You’d be surprised how many will offer you some benefit if you just call.  For example they may offer a reduced interest rate for a period of time, reduced rate if you transfer some debt (may be a really good option) etc… Negotiate your interest rate, payment, settlement amount and payment date.

• Personal Loan

Take out a personal loan to pay off that credit card debt.  You can lower a 19% credit card rate to 6% for example.

• Commit

Commit to paying off your credit card debt and don’t let anything get in your way.  When debt isn’t out of control you may see a blouse you like and figure – ah, it is just $30 and I really love it…. But when committing to credit card debt – don’t even consider it – AT ALL!  Anything you think you “need”, think again, and again… Give yourself 24 hours to see if it is something you really want, need etc..  Keep in mind if you really want it – you can have it but do not let it get in the way of your payoff strategy.  For me that means – do I really want to work that much harder at freelance, selling on Facebook Marketplace etc…  That is often more than enough deterrent.

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These simple habits if done over a period of months will make a huge difference and will allow you to experience success quickly and free you from the credit card cycle.