I hate this feeling of can't-do

[Kris10Leigh]

We just paid of the credit cards, yeah. But now I'm in this horrible state of limbo. We've been using a credit card for about a year now that gets paid off every month. I always pay off that credit card on pay day and whatever is left over went to the credit cards. We just paid off all the last of the $27,000 last pay day, so right now my bank account is zilch. I hate that this has happened now, at holiday time, when I have some unavoidable expenses. Thanksgiving is mostly taken care of, but odds and ends are going to have to go on the card. Christmas is going to have to go on the card. When all is said and done, my paycheck is going to be eaten up next Friday and there will be another two weeks of no savings.

The word I'm looking for here is "PATIENCE". I have none. It's what got us so far into debt in the first place and it's also what got the cards paid off in the end! It works for good and for evil.

[wincrasher]

So I take it you have no EF at all.

Paying off debt at the expense of EF is foolish. Hopefully you'll reign in your holiday spending and avoid another pile of debt.

Good luck!

[Kris10Leigh]

I wouldn't say foolish, but yes, that is the method I chose to go about it. And considering I paid off $27,000, I'd say it worked for me. We attempted twice to build up an EF, but both times I felt compelled to send all the money to the CC's and couldn't sleep at night thinking about it.

I'm not advocating it...that's just the reality of it. One size does not fit all.

[Broken Arrow]

Well, for better or worse, when I was climbing out of debt, I pretty much threw everything I had, including the kitchen sink, at my credit card debts first. I did keep a little bit in the bank, but not much.

Taking the "highest interest first" method isn't the easiest thing to do in practice, but I don't regret it one bit.

[Kris10Leigh]

Nor do I regret what I did. I had a really hard time having $1000.00 earning 1% interest in my savings account while the CC's ate up 13+%. I know I'm really lucky that no big emergency ever hit, but I was also never maxed out on my cards. I always had sufficient credit, way more than $1000, available on my CC's should I have needed it. Yes, I kicked myself every time the car broke down, or Christmas rolled around (like this year ) or when we had an unexpected appliance break down. But I just put it on the card, sucked it up, and kept going.

And hey...now my debt is gone. The struggle right now is to not accrue any through Christmas. If I do, I do. I know it will be paid in January because I'm expecting a $1000 reimbursement check form DH's work. It's more of a pride thing. Having just freshly paid everything off, I really don't want to have to bend and use the card this one last time. I'd far rather get to put the reimbursement money in my savings account and let it sit there for a change!

Again, it's back to patience.

[Joan.of.the.Arch]

You originally had planned to get rid of the CC in in one year, yet it ended up taking three (I read in your blog). So you found it harder to do than thought. Maybe you have only one third the patience that your originally thought you had. Yet you did do it, so you surely did cultivate at least some patience over those three years! Give yourself some credit! You did good and you can patiently continue to say "no" to spending part of the time, and say "yes" to the future through some savings.

Remember that you can save for many purchases ahead of buying them. Even with Christmas, I hope you will set goals for at least some of your purchases, rather than put them on CC immediately. If you are religious, by the way, remember that Christmas is not a single day, but a "season." You know--the twelve days of Christmas, as in the annoying partridge in a pear tree song? If you are brave enough to expand the days of gift-giving, you can delay some of your purchases till actually after Christmas Day. That might get you to another pay day, not to mention get you into the post Christmas Day sale period.

I know that could be majorly changing the way your family celebrates, but perhaps you can delay just a little of it. If your children are older, they might appreciate receiving a promissory note to go shopping with you to pick out that new coat or video game or whatever.

I really commend you for paying off the CCs. I am glad you will not be among those who find themselves stuck with 30% interest rates. You've done it, and you can continue doing it.

[reallyprettyhappy]

Have you ever been on a diet? Or lost a significant amount of weight? I feel like that compared to your recent experience is pretty similar. It's like you just lost 100 lbs. You feel free and accomplished, but you know that that doesn't mean that you can stop working out now, right? You have to keep taking 1 day at a time, because for better or worse, you are going to be in 'maintenance' mode for a long time, if not for the rest of your life. So if you gain back a pound here or there, it's usually ok, as long as you don't let yourself get back out of control. Unfortunately, it'll take a complete lifestyle change to finally get to where you want to be, not having to rely on the cards ever. And that is going to take some time, so give yourself a break. Just stay on track and if you have to, count every 'calorie' (penny) throughout the holidays to make sure that you're not overindulging. Good luck.

[buildmybudget]

I don't think you should concern yourself too much with one holiday season. In fact, if struggling through a couple rounds of gift giving is all it takes for you to successfully make it out from under $27k in CC debt, I would say you are a genius(and not foolish). It seems like a pretty small problem that you have--one that you can overcome by making homemade gifts, finding ways to get free gifts, or simply by telling your loved ones that you can't afford any gifts this year and you'll make it up to them next year.

The only way to make sure you stay out of debt is to STOP using the card. You will always find reasons to buy stuff(ie: the holidays) so you must draw the line somewhere. If you can't afford it, don't buy it!

[wincrasher]

I'm not denegrating the fact you paid off so much. Believe me, I know the feeling.

But what I am saying is that you need to proceed from now on with some sense of reducing risk. By cutting it so close, you end up in this cycle of running up debt, then working it down - over and over. You never know when life will throw you a curve ball - like hiking your interest rates, cutting your limits or cancelling your cards altogether. Couple that with a job loss, medical emergency or major car repair and all your hard work is erased in a flash.

[kork13]

Congrats on taking out the debt, no matter the means. It's a notable accomplishment.

For the upcoming holiday season, three things that can help you keep any new debt to a minimum:

1) Cut back. Ask yourself if you really need to give a gift, or multiple gifts, to the individual in question. Perhaps limit yourself to one small, reasonable, meaningful gift to immediate family only--I'm sure that cousins, nephews, and the postman will survive without the gesture of a gift. Also, get creative and give homemade gifts--baked goods, hand-crafts, and so on. I frequently give framed copies of my photography as gifts. And do you really need the big, elaborate dinners, or dinners out? Every dollar you don't spend is a dollar (with interest) that you don't have to pay back.

2) Go to cash only for a while. Credit cards are great, and very convenient, but shouldn't be used if you won't be able to pay everything off. Put the credit cards in your safe and leave them there. Pay cash for everything in the next couple months, and if you don't have the cash for it, then don't buy it. Also, remember that what you buy now might prevent you from buying something else later.

3) Downsize. Some things just have to be bought, but try to spend as little on it as possible. Buy comparable but less expensive items. Store-brands for holiday dinners, the smaller/less gorgeous Christmas tree (or go cut one yourself for even less), the 8-lb turkey instead of the 15-lb.

It's difficult, but not at all impossible. If you focus on accumulating as little new debt as possible (hopefully none at all) over the holiday season, you can do it. Best of luck, and happy holidays! Remember that in the end, it's about family and friends, memories and time together. The gifts, big dinners, and all the fru-fru is just icing on the cake.

[highsavings]

Technically, you do not have to spend money this season. You do have a choice, and you could think of gifts that you can make and are less expensive if you must. Just pretend you don't even have your credit card, and it is not an option...

[jasonnoguchi]

One lousy holiday for a lifetime of great holidays, I think this is a better deal than having half-hearted holidays for the rest of your life.

[BudgetHowTo]

Do you have any kids? Kids wouldn't understand it if you didn't open gifts on Christmas when they had in the past years. If you do not have kids or they are older, I suggest waiting for after-Christmas sales. The items that are overstocked go for super cheap.

If you are not stuck on tradition, this would be a majorly frugal idea and you would have and keep your savings.

[Kris10Leigh]

I do have kids, so yes, Christmas must come off without a hitch. Though they are still at the age where the quantity of the presents is more important than the quality. So we can purchase many less expensive gifts like balls, puzzles, etc. My husband and I are only doing stocking stuffers this year since we just bought a house. The stocking stuffers are a must because those are from Santa. We're doing real practical stocking stuffers though, like luxury shampoo or body wash we wouldn't normally buy and batteries.

Mostly I'm just complaining. We're absolutely fine and quite fortunate. I just don't want to use the cards and I'm not a last minute shopper. I pretty much won't set foot in a store after Thanksgiving because I can't stand the crowds.

[jasonnoguchi]

Remember to cut up the cards and close them with your providers! This is the most important step to take now that you have paid them off. Cards lying around are like drugs laying around for ex-drug addicts... its too easy to pick them up and start using again.