Courtney and Michael Wacker had $US83,000 in debt with a 32 per cent interest rate. That's not the kind of debt you get out of easily, but they managed to nonetheless. They started by seeking help from an organisation called CredAbility (formely the Consumer Credit Counseling Service of Greater Atlanta) and were able to get the 32 per cent interest rate cut to 3%. Obviously this was an enormous help, but it still left them with a monthly payment of $US1456 they'd have to make over a little more than five years. That's like renting a one-bedroom apartment in Los Angeles in addition to everything else.
How did they cope? Obviously their spending habits had to change dramatically, but one smart choice they made was to switch to a cash-only policy. The problem with credit cards and debit cards is that it's hard to control your spending when you're not constantly aware of how much money you have. The Wackers said using only cash was pretty tough for the first year, as it requires a bit of forethought to make sure you have enough money on hand when you need to pay for simple things like gas and food, but after that it became habitual and more manageable.
Changing a learned behaviour can take time, and curbing your spending isn't easy, but if you force yourself to work with only what you've got it'll be a lot harder to overspend.
Photo by J Rosenfeld