Tuesday, July 07, 2009

Credit Card Delinquencies at Record High!!!

So I just read this story on MSNBC which talks about how the delinquency rate on credit cards is the highest since it was first tracked in 1974...OMG!!!

Since our brush with over-in-debtedness, we've made great strides to eliminate all credit card debt. I have to say that this current economy made me even more determined to get ahead in that area as well as our other debt. We no longer want to be burdened with debt. It just seems that it prevents us from making decisions or taking advantage of opportunities. That's not to say that once we're free of debt we're going to quit working and live a life of leisure, but the ability to be flexible is certainly enhanced by reducing debt and increasing savings.

So how did we do it? We chipped away at it painfully slowly. We closed our business and went back to working full time. We cut expenses. We packed our lunch more often. We ate out less. We bought cheaper and less food. We traveled less. We conserved gas. We paid for the necessities and put whatever was left on the most expensive debt. We checked our bank balance every day. We tracked our net worth. We tracked/graphed our debt. We regularly maintained our vehicles so they would last longer. We took advantage of balance transfer offers. We stopped focusing on "things".

Was it easy? NO WAY! Was it worth it? ABSOLUTELY!

As I've said before, Trent from The Simple Dollar has been through this, conquered it, and now makes a living giving advice about it. He has created 10 postings about his progression from indebtedness to solvency. All are worth a read but #9 The Road to Recovery is the one that I find most relevant.

What is really boils down to, it taking PERSONAL RESPONSIBILITY to change. Change what you're doing, talk to your family about your concerns so they can support you. Use the situation as a lesson for everyone. Dispose of the guilt about the situation (you can't change the past) and channel that into change. Brainstorm with your spouse about ways to make things better. MrLacubrious and I frequently discussed the state we were in. Blaming each other was not the answer. We decided on a plan and agreed that the goal was reasonable and made it happen. It was much easier being on the same page. Did we slip up from time to time? OF COURSE, but we didn't beat ourselves up, we just got right back on track.

The positive reinforcement from making progress on your debt is addicting. Post a chart on the fridge showing where you started and update it monthly for a visual reminder of the progress you've made. We kept our debt info in a spreadsheet that we could open up anytime we thought about the situation. #1 It would keep us from spending on "wants" and #2 It made us appreciate the progress we were making.

So, all you folks with credit card debt....What change will you make starting this week to put a few extra dollars toward that debt? It can be done!

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