It’s been about three years since I’ve had my last credit card and that can make many people cringe. How do I do it? How am I living like this? Am I not ruining my credit without holding them? I’m going to give you a transparent look into what it really takes to live well without even owning a credit card.
Many of you know me as a real Financial Freedom blogger and mindset advocate. That’s why I always blog about getting out of damaging consumer debt and staying out of debt. It all has to do with our personal habits and Financial Independence we want for ourselves and those around us. Big credit card conglomerates will sugar coat credit card debt and make you believe that debt is a good financial tool. By servicing your debt, you look like a responsible person with your finances. In any case, nothing could actually be further from the truth. Credit card debt can kill your true cash flow by having to pay cc bills with interest every month. Not only that, but many people absolutely ruin their credit when they take on too much debt and can’t keep up with the payments.
My Big Why
I, like so many others, woke up one day with an epiphany. Here I was, three years ago, with a fairly small balance of about $600 on one credit card, yet the payments seemed to be going nowhere. I was even paying more than the minimums yet the balance seemed ‘stuck’ and at the time I had other financial obligations to attend to. It’s only when I changed my mindset from that of less consumerism that there was a real paradigm shift that took place. I started listening to such financial experts as Suze Orman, Dave Ramsey, David Bach, Thomas Stanley and others. Long story short, I destroyed my existing credit card balance in two lump sum payments by decreasing existing variable expenses.
In my case, by cutting down on what I was spending and cutting expenses where possible, it put me in the position where I was able to save approximately 85% of my income at the time. Read my earlier post I, “How got rid of the plastic” for an entertaining view of cutting the plastic out of my life.
So, How Do I Live?
Well, first of all, living without credit cards is not nearly as easy as whipping out the plastic on any whim for any unseen purchase. However, with discipline, I’ve really learned to control those urges of needs vs. wants and I buy a lot more things I really ‘need’ out of necessity and my wants I treat as a reward. Think about how many people that nurture and give in to wants every day. Many people are up to their eyeballs in damaging consumer debt. With cash in hand and a debit card, I make much better financial decisions because every purchase you can ‘feel’ and you have some skin in the game. Credit cards give a lot of false illusions with your finances.
I’m still working on paying off my existing mortgage which because I pay on time and always some towards principal, I will eventually be totally debt free from this as well with good discipline and planning. This also helps me build my credit score and show fiscal responsibility.
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