And then there was no credit card debt

It was time to get my finances in order. I had been intending to find a debt tracker and payment planner online. I had used one years ago and know how beneficial then can be to help you get out of debt.

And then my friend Jeremy sent us a guest post sharing 5 tips on how to get out of debt. He is an accountant and smart with money. He sent through a debt calculator spread sheet–exactly what I was looking for (MAGIC at work)

All keen to try it out I logged into my bank account to record my debt balances. I knew it wasn’t going to be as bad as several years ago so I was not hiding behind my fingers.

I clicked on the MasterCard account and viola, there in front of me was a zero balance.

What?? How did that happen?

I checked my total net position and it was looking healthy.

Did a money angel pass on by?

On closer inspection I noticed the the money angel was Craig and he had transferred real cash to take out the debt once and for all.

All gone with money still in savings.

We’ve been trying to erase our bad decisions for years now. One credit card at a time. It’s been tough. We’ve had really low salaries for about five years, and the costs of starting our own business lobbed on top.

It has been a bloody scary ride and a painful one.

I’ve learned many lessons. I know how to respect money now. I’ve proved that by paying off three credit cards over the past two years.

Debt is debilitating. It gives you low self-esteem and hinders your ability to live freely. You feel so useless in your ability to manage money that you just kind of give up and let the bills pileup around you.

If you are struggling with debt now, I totally feel your pain. We were in a horrible position. I had no idea how to get out of it, but after looking in my bank account last week I somehow found a way.

By taking small steps, but not letting it consume me, but not feeling bad about my mistakes, rather embracing the lessons, and by putting my focus elsewhere.

It’s so liberating to know the balance I look at now in my bank is all mine. It’s not much but it is mine. And I’ve learned that it is not there to be thrown around willy nilly. It’s there to be managed and respected.

You’ve got to have a get out of debt money plan. Use Jeremy’s debt calculator spread sheet to help.

This is how we got out of debt:

  • Looked at the credit cards with the highest interest rates and started paying them off first.
  • We tackled the small debts. You see the results better which make you feel better.
  • WE had a monthly payment set up to take off the minimum amount plus a little extra.
  • Every bonus that came our way we put on the card: it was these tax returns that really helped us wipe out our credit cards. Do not ever use these bonuses for plasma TV’s, designer wardrobes, or luxury holidays unless you have no debt or financial commitments.
  • Celebrated every pay off. You gotta celebrate so you get more.
  • Did not focus on the debt-obviously as I didn’t even know it was paid off. We set it automatic payments so I wasn’t focused on it.
  • Get lower interest rates if you can. For our last card we moved the balance over to another credit card that had interest free for 6 months. And then Craig wiped it out. That good energy we put into doing something to help reduce the debt, brought the means and confidence to take the sucker down!!
  • Cut back on costs somewhere and transfer that to your debt. We have been living with Craig’s parents. That sacrifice has really helped us to clear our debt.

Money confidence returns

Now I feel so much more confident when it comes to managing money. We have money buckets set up to organize our money. A bucket for tax (with a high savings interest rate) a savings bucket, business expense bucket, everyday expense bucket (we use ING Direct card which gives us 5% cash back on purchases) and a dream bucket.

We also now feel confident to use our credit cards for spending to get our frequent flyer perks. Don’t ever do this if you can’t manage money. I refused to over the past few years as I did not trust myself to pay them off in time. Now I do. We have the management systems in place.

Clear your debt and instead get your money working for you not against you.

I can’t wait for the day you can look in your bank account and be surprised with how clever you have been in paying off your credit card debts.

Your Turn to Share Tips:

How have you cleared your bad debts? Or are you still struggling? Share your tips in order to help others.

posted in: Featured, Magic
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  • Jeremy Branham

    By using the tips I wrote about above! 🙂

    I’ve always hated debt. Against my nature. Nothing wrong with credit cards – IF you know how to manage your money wisely and don’t spend beyond your means.

    Good tip about transferring debt over to interest free cards. Wish I had included that as a tip. You have to be careful not to do that too much or you’ll hurt your credit with too many cards open.


    • Caz Makepeace

      Yes-it is all about knowing how to manage your money. I get so annoyed that it is not taught at schools, it should be high up on the essential curriculum list as it is now a basic need.


      • Jeremy Branham

        Yes and no. I do believe learning basics on how to manage your money should be a skill learned at home. However, the biggest model for kids is going to be the parents. If they don’t know how to manage money, then their kids will just follow their behavior and repeat their patterns. Managing money can become a learned skill but it can also be a learned behavior. I would argue the habits of the parents are more important than what learning those skills in school (I also think that applies to a lot of other areas in life).


  • Sarah

    I was in a similar position Caz about 7 years ago – single mum, renting in sydney, personal loan, not many assets and on mat leave (recipe for disaster) but I focussed on my short term and long term goals – got rid of my credit card, took on work that fit in around my girl and paid off the loan. Moving in with my dad for 6 months set me up for life. Great tips and respectfully delivered x


    • Caz Makepeace

      It’s hard to move back in with the parents but you have to do what you have to do. It’s been a huge help for us. Feels great to not have the burden


  • Kate - CanuckiwiKate

    Woohoo, congrats Caz! I recently did the same, free once and for all! I ended up starting my teaching career $700 in the hole – I had to get NZQA in order to actually get paid the correct amount 4 years ago… and even though the limit was only ever $1000 (thank goodness!) it felt impossible to actually get ahead – everytime it was wiped, something else would pop up and end up on the card.

    We’re 3 weeks away from setting of on long-term travel, and I am so happy to have shed that deadweight! I’ve learned so much just from that little bit of debt. Love the magic!

    Onwards and upwards from here (and our bank account balances, too!)


    • Caz Makepeace

      That’s so awesome Kate! It sounds like you are totally in control of your finances and know how to manage the flow of money. Not long now till your amazing adventures!!


  • Jo (Dexterous Diva)

    Amazing, well done Caz 😉 Financial karma always seems to be something I am “working with” shall we say. Inspiring post, and well done xxx


    • Caz Makepeace

      Thanks Jo! I think it always will be a work in progress for me too. I’m still working on increasing the flow of money in my life


  • Katherine | Kapcha The World

    Great post Caz – you inspired me to sort out my monthly budget. Have it all planned out. Now just to stick to it! lol


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