For a while I was trying to figure out how in just 5 years living in the US I have managed to acrue a debt close to 40 grand. I should be responsible and say "I screwed up and I was irresponsible". Though I can blame myself I would not want to beat myself about how I screwed up. The only solace I have with this is "Most of the people I know are in the same boat". It is indeed difficult to lead a good life without credit these days, but doing it beyond reason is what brings us to un-bearable amounts like my 40 grand.
With careful planning and sacrificing enjoyment I was able to bring my 40 geez down to 2 geez. In about 2 more months I should be debt free for a while (provided I stay the right course and slow down my spending).
How did I do it? It has come down to basics.
What do I need vs What do I want? "Need" & "Want" are such relative words. For a while I could not differentiate between these 2 words. Example: I thought I needed a "Playstation 2" when I had a regular playstation, when in-truth I wanted one. Similarly with a laptop when I had a good desktop and the list goes on and on.
When I realized I have spent money I did not have via credit cards or other loans I only came to realize with time that I spent more on something than its real cost because I was paying interest on the credit I used to buy it. After some stress-ful calculations on how much money I am loosing in interest I decided to cut off all extra costs.
I also found an interesting thing about the cost of anything. (a) If you could wait atleast 5-6 months prices will fall down below half the original price. (b) If you pay with cash you will save a lot on interest
Since then I have devised a plan to buy stuff. Plan in advance and start stashing money in containers or put them in a savings account to save up to buy. I bought an IPOD, a Digital Camera, a new Laptop, and I took an India trip that cost me more than $7000 all with cash so I pretty much saved $2000 to $3000 on interest if I used credit to buy all the above.
It's better to be patient and wait to buy something you want later than buy something right now and pay more in interest.
With careful planning and sacrificing enjoyment I was able to bring my 40 geez down to 2 geez. In about 2 more months I should be debt free for a while (provided I stay the right course and slow down my spending).
How did I do it? It has come down to basics.
What do I need vs What do I want? "Need" & "Want" are such relative words. For a while I could not differentiate between these 2 words. Example: I thought I needed a "Playstation 2" when I had a regular playstation, when in-truth I wanted one. Similarly with a laptop when I had a good desktop and the list goes on and on.
When I realized I have spent money I did not have via credit cards or other loans I only came to realize with time that I spent more on something than its real cost because I was paying interest on the credit I used to buy it. After some stress-ful calculations on how much money I am loosing in interest I decided to cut off all extra costs.
I also found an interesting thing about the cost of anything. (a) If you could wait atleast 5-6 months prices will fall down below half the original price. (b) If you pay with cash you will save a lot on interest
Since then I have devised a plan to buy stuff. Plan in advance and start stashing money in containers or put them in a savings account to save up to buy. I bought an IPOD, a Digital Camera, a new Laptop, and I took an India trip that cost me more than $7000 all with cash so I pretty much saved $2000 to $3000 on interest if I used credit to buy all the above.
It's better to be patient and wait to buy something you want later than buy something right now and pay more in interest.
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