What’s the biggest drawback of using a credit card? You can’t monitor your spending habits. Because you’re basically paying cashless, you don’t feel the brunt of charging huge amounts on these tiny pieces of plastic. It is easy to fall into the trap of shopping as taking home the products you have been eyeing is as easy as swiping. However, you don’t realize just how this becomes a habit until you see the bill.
Incurring $30,000 in Debt
Things get worse when you can’t settle monthly dues in full, leaving behind balances that accumulate through time. Plus, these tiny purchases’ interest may seem low in hindsight but add them all and they balloon on top of your bill. Business Insider’s Ashley Abramson recounted the moment she and her husband incurred a debt of $30,000 in three years because of mindless spending using their credit cards.
It can be easy to get trapped into the magic spell of a credit card
After a chronic illness stopped her from freelancing, they resorted to credit cards. This resulted in over $1,000 in payments each month – quite a sum that’s burdensome for them although they make it a point to make a lot of sacrifices to fix the mess. However, the couple has recently paid $10,000 of their debts in just three months, bringing down the total amount to just $20,000. Here’s how they did it:
One Vehicle
It can be a hassle to commute, especially when you’re running late, but it’s one of the sacrifices you’re going to have to make to lessen the expenses. The couple just lives with one car, which is not easy for them because their residence is in a suburban area. You might think that a car is better than none at all but for the pair, their location was a big hindrance because it’s not walkable to their workplace.
The family only uses one vehicle
The writer’s husband walks for a mile to a park-and-ride stop and hops on a bus to his work. That’s not only saving gas, but it also promotes exercise along the way. Although it entails a lot of work, the couple tries, as much as possible, to align their schedules and make it a point that one stays with their two kids at home when one is out. Speaking of their children, the eldest also takes the bus, so pick-ups are not that complicated.
They pay $350 per month for the van, $50 for the insurance, and $200 for gas. Ashley estimated their savings to about $600 to $700 a month that can go to the payment for the credit card debt.
One Income
Dining out and unplanned trips were set aside
Being a freelancer, money doesn’t come regularly, especially when you’re dealing with different clients. So for Ashley, the family had been living off her husband’s income that arrives on time. Once her payments are deposited, these go straight to their credit card debts.
But this wasn’t easy at all for the family who admittedly was used to living a lifestyle they can’t afford. Because of their strategy, dining out, buying more than what is needed, and unexpected trips had to take a backseat for now.
