Get Out Of Debt
Stay Home With Your Kids

Want to read a nasty four-letter word? Debt! Want to never hear that word again? Ok then, get out of debt!

There is good debt and bad debt. Bad debt is a stay at home mom’s enemy! If you want to be a stay at home mom, debt can be the deal breaker. If you would be able to afford to stay at home and the only thing that is holding you back is your bad debt load … frustrating, to say the least!

Get out of debt!

The Difference Between Good Debt and Bad Debt Good debt normally means you purchased something with credit that either holds its value or increases in value, or hold some other value for you. For example a student loan, a mortgage, a vehicle. When you purchase something on credit whose value continues to decrease, that is bad debt. For example, the take-out dinner from last night, or that BratZ doll your daughter just had to have.

Bad debt is something people don’t think of. It’s like they just will it to be good debt; ‘I needed that 62” high-definition LCD flat screen TV!’ Aha. Sure you did, because Grey’s Anatomy just isn’t the same unless you can see every pore. ;-)

Get out of debt!

The thing is, you have to think about what you’re purchasing, when you’re purchasing it. If its something you don’t need this instant; if you can wait a month or two and save to pay cash for it; then save and pay cash. Who knows, by then, maybe it’ll be on sale - even better! If that TV was on sale and you purchased it on credit, but you carry a balance on your credit card, then you just paid full price for your TV. Actually, you probably paid more! Think before you swipe – if you don’t need it, then defer and purchase it once you have the cash.

And of course, good debt can sometimes be bad.

Say what?! Yep. Good debt isn’t good when you’re struggling to pay the payments. You need a vehicle, I totally agree. To get the groceries, to ferry the kids to soccer practice and piano lessons – a vehicle just makes life easier. However, you probably don’t need the Lexus SUV with all the bells and whistles! Or perhaps you wanted a bigger house and the bank said ‘Oh! You can ‘afford’ a $600,000.00 dollar mortgage!’ Of course they said that. THEY MAKE MONEY OFF OF YOU! They’re not being nice, or generous, they’re making money – its business. Purchase what you can afford comfortably.

Get out of debt!

When you’re struggling with your bills and just getting by, it’s stressful and, usually, unnecessary. We are all guilty of trying to keep up with the Jones’. I’m guilty of it. You’re guilty of it. We’re all guilty of it. It’s ok to admit it! Now come to grips with it and move on, rise above it. If you really want that Lexus LX470, fine. Make it a goal. Save for it. Strive for it – get it! Until then, be happy with your secondhand Chevrolet Venture and stay out of debt. It’s a perfectly good vehicle. It does the trick and that’s all you need.

Now that you know the difference between good and bad debt lets move on to getting rid of debt, good or bad. Lets face it: no matter how we label it, all debt is bad. I’m sure you’d rather put the $1000 mortgage payment in your pocket rather than give it to the bank. So how do we get out of debt?

Get out of debt!

For debt that seems insurmountable…well…it’s easy to get overwhelmed and frustrated and just give up. Don’t! You can get out of debt. You just have to have a plan.

The Stay At Home Mom Get Out of Debt Plan

Step No. 1 - Stop Creating Debt I have a credit card and I use it regularly. However, when I purchase something I send in a payment for it right away. I don’t let it linger in limbo – I get rid of it! See? No debt. The trick is to not buy something using your credit card unless there is money in the bank to pay for it. That way when you get home, simply send it the payment. However, it is important to know one’s self. So, if you don’t trust yourself in the above scenario, don’t use a credit card. Stay out of debt, get out of debt!

Step No. 2 – Make A Plan Get out all of you debt creators – credit card statements, gas cards and department store card statements, even your car and house statements if you want to include them.

Make a list of them and their total amounts. Then divide the total amounts by the cards’ minimum monthly payments. Doing this will tell you how long it’ll take you to pay them off if you just paid the minimum – SHOCKING isn’t?!

Now list debt creators by how long it’ll take you to pay them off, in increasing order, regardless of interest rate. That is, if it’ll take you 3 years to pay off your VISA and 15 years to pay off your mortgage and 7 years to pay off your vehicle, list the VISA first, then the vehicle and then the mortgage.

Step No. 3 – Work The Plan Now pay the monthly minimum on each debt creator, except for the debt creator that is in the No. 1 position – pay it’s minimum plus whatever extra you can afford, even if it’s only $20, it makes a difference! Keep doing this month after month until the No. 1 debt creator is paid off. Congrats! :-D You're on your way to...get out of debt!

Now take the amount that you were paying on the just paid off No. 1 debt creator, plus whatever extra and put it towards the balance of the No. 2 debt creator, along with the minimum payment for the No. 2 debt creator.* And so on and so forth, until you no longer have any debt creators!

*(After reading the above, I’m a bit confused myself. ;-) So here’s an example. Lets say you have a VISA whose minimum payment is $87.00 per month; a vehicle payment whose minimum payment is $363.00 per month; and a mortgage payment that is $998.00 per month. You have decided that you can spare an extra thirty-five dollars per month to put towards the VISA payment. So month after month you have been applying $122.00 to your VISA bill. Last month you finally paid the last $122.00 toward your VISA bill. This month’s bills come in the mail, what do you think you should do with that extra $122.00? That’s right! You put it toward your vehicle payment. So now instead of paying $363.00 per month you’ll be paying $485.00 and it’ll be paid off that much quicker. Good for you! Once your vehicle is paid off, move the extra $485.00 to the mortgage payment, so you’ll be paying $1,483.00 instead of $998.00 and now your mortgage will be paid off sooner too. You are closer to getting to where you want to be...get out of debt!)

Step No. 4 – Re-Build Your Credit Rating When you’ve paid off a credit card, don’t close the account. Keep it open and use it on a regular basis, but paid it off right away. This helps your credit rating stay in good standing, or brings it up from where it was if it wasn’t so good. When you get out of debt your credit rating goes up!

Step No. 5 – Celebrate! That’s right - celebrate! You deserve it. Congratulations! I don’t mean go out and ruin all the good work you’ve done, but a nice dinner in a fancy restaurant or perhaps a new spring outfit, is a perfect reward. And now that you know ‘how’ to spend, it’s not going to break the bank and it will give you something to look forward to. When you get out of debt you can celebrate more freely!

Debt Resources You’re trying to get out of debt so you don’t want to be spending more. ;-) Therefore, the resources below are either free or you should be able to find them at your local library.

David Bach – Finish Rich

I recommend any resources by David Bach. He has a clear, concise way of dealing with debt, to get out of debt and creating wealth, and best of all – he doesn’t talk down to you.

America’s Debt Diet

Mr. Bach has also partnered with Oprah, Jean Chatzy and Glinda Bridgforth to bring you America’s Debt Diet. There you will find so many helpful resources, tips and techniques to bring you up from drowning and help you get out of debt!

If debt is a problem for you and you want to get out of debt, I urge you to visit the above websites.

Besides the websites listed above I also suggest you read Mr. Bach’s books. I’ve checked at my local library and was able to find all of his titles listed there. Of course you may be placed on a waiting list, but you won’t have to pay for the book! ;-)

There are plenty of resources out there, either on the ‘Net or in print form, with ideas, tricks and techniques to help you get out of debt. If Mr. Bach’s style of writing isn’t for you, simple go to Google and do a search pertaining to your personal situation and something is sure to come up.

As always if you’re having a hard time, please contact me through the contact form and I’ll help you in any way that I can.

And remember, debt is something that has to be discussed openly, accurately and logically in relationships. Otherwise it can be the deal breaker there as well. So work together and get out of debt!

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