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Learning to Live Without Debt, Doesn't Mean Learning to Live Without

by Diane Conlinn, November 6, 2000

Learning to live without debt doesn't mean learning to live without. I tried to live without for years. I cut corners in every way possible. I cut coupons, went to sales, baked my own bread, cut firewood (heated with wood from dead and down trees). I even ground my own grain and churned my own butter. I made my own mayonnaise from scratch, bought honey in bulk and used that for sweetening. I had gardens, went to the fields for gleaning vegetables, and fruit. I was frantic with cutting those corners to cut a buck.

Yet, after all was said and done, I did pay off my bills twice, and then got back into debt again.
The reasons were different each time. The first time was foolishness, buying lots of things on time, with the new credit of a young person gets right out of college. But, the second time was car repair, house repair, unemployment, etc. The third time was medical bills, more unemployment, etc., more car repair. In spite of all my frugality, I went right back into debt.

Why did I go back into debt? #1 I didn't know how to live within my means in a way that honors my needs. #2 I didn't save for contingencies. #3 I blew my windfalls on minor things. #4 I didn't keep up my insurance. #5 I didn't actively pursue new sources of money.

I have written several articles on how to live within ones means and repay ones debts. But, the first thing one must do is meeting one's needs. I have found out that when I live like I'm in the poor house, I buy like I'm in the poor house, and when I do get any money, I don't know how to handle it.

I don't know how many times to say this. But, take care of yourself and your family first, before your creditors. Set reasonable amounts for your food, shelter, clothing, leisure, and other needs. Take care of your immediate needs first.
Pay for your food before you pay your creditor. Don't pay your creditor before you pay your utilities. These are your first needs. I am not advocating not telling your creditors what you are doing. If you see my article, "How to deal with Creditors", you will see that I advocate keeping your creditors informed on a monthly basis on your status. And each time you get a windfall, to divide it 1/3, 1/3, 1/3. One third to the past, debts and other obligations, 1/3 to the present, to present day needs, and 1/3 to the future, place that money in a contingency fund, to take care of yourself should unemployment or some other serious disaster happen.

Don't let that contingency money get trickled away by minor disasters, or pay the creditors out of the contingency money. That money is to pay your living expenses, if your situation seriously changes, or if your car breaks down suddenly.

We think we don't need insurance. Insurance can take care of many needs. I have found that I must have at a minimum, health insurance, car insurance, and pet insurance. I have an HMO, and regularly use it. I also have a before tax health spending plan into which I put money to reimburse my health expenses, which saves on taxes. If you don't have one, check with your employer, or do some searching on the net for one you can join independently. Car insurance seems unnecessary to many of us, until you get into an accident, or you come out to the parking lot, and the side of your car has been left bashed in. Or a rock gets thrown into your windshield. If necessary, relocate yourself to where you don't need a car, since a car isn't a necessity. I went without a car for several years and saved a lot of money on car payments, and transportation expenses. But, I have a car now, in fact, I just bought a new one.

Buy pet insurance for your pets. Pet insurance is very easy to purchase when the pets are young. My insurance covers basic health and shots for my young cat. And if my cat were to get really ill, it pays 80% of the larger expenses. This could really save my sanity, and my pocket book.

Additionally, when you do make planned purchases, buy good quality items. There is a reason cheap is cheap. Things don't last as long. Knowledge helps in this department. Learn what good quality is. Learn what good leather, good fabric is. One thing I learned to do was to have clothes made by a tailor in order to get the best quality clothes I can. I also take my new clothes to a tailor to have them fitted, so I don't have mistakes in my closet. Having new clothes made is the same or less costly than buying good quality clothes in the stores. And if you find a good tailor, you get first quality clothing.

Last but not least, do not say a no to money. Opportunities come by our way every day, not get rich schemes, but real opportunities to make more money, and we shoot ourselves in the foot. Let me give some examples of things I've said no to, which I should have said yes. I was offered a job making some commercials singing popular music. I said no, because I sing only classical music. A big beep, that was saying no to money. A friend asked me to do some extra typing to help them out at their work. I said no, because it wasn't enough money an hour. Another beep, because I needed more money at that time just to meet my utilities expenses. I decided to stay at my job because it helped others. Another beep, I could have explored other opportunities that paid more money yet still my met my desire to help others. After a long painful time, I finally did go out and look for a new job and found one that did meet this requirement. But, saying no to new opportunity really is saying no to money.

I'm sure you have other examples of which you can think. So, next time you are about to open your mouth to say no, think about what would happen if you said yes. Saying yes, by the way does not mean incurring new unsecured debt. That is more credit card debt, borrowing from family or friends, playing credit card roulette, moving your charges from one credit card to the next. Trying to beat your check to the bank, etc.

Leave the credit cards, the check book at home, and just take the right amount of cash with you. Pay cash for everything you can. I personally do not have a checking account. I haven't had one for four years. I use money orders to pay my bills and my rent. The peace of mind it has saved me, not to mention bounced check charges, has been enormous. I have my paycheck deposited straight into my savings account. I always know my balance to the penny. I'm not suggesting you get rid of your checking account, but if you can't handle it, then please consider it, at least for a time.

Well, the end of my rant for today. This is a continuing article in Learning to Live without Debt.

Thanks again.