Drop Kick the Debt Devil

Perhaps you've heard of these brilliant people who pay their credit card bills in full each month. They are like mythical creatures--Bigfoot, the Loch Ness Monster, and People Who Have No Debt.

If you don't yet have mythical status, fear not. You're like most Americans. And quite frankly, feeling fearful about debt doesn't fix it. It only stresses us, giving a host of problems that very likely don't do anything to decrease debt and may actually only make it worse.

Fix It & Forget It

To relieve some of the stress associated with debt, sit down with your monthly budget and figure out how much you can realistically pay. It's important that the word "realistically" play out in budgeting. You must have a fierce commitment to put every last dime toward debt. If you know that you're more than likely to get that massage and will just end up charging it because you've given all your cash to the bill, by all means set aside some funds to play with so that you won't end up simply adding more to your credit card at the end of the month because you ran out of cash.

Once you've figured the parameters of your budget, check out the amazing Debt Repayment Plan from Bankrate.com. The program asks you to enter debt amount, interest rates, minimum payments and if you have any extra cash that you can put toward your debt. It then creates a payment plan for you. I was shocked by how it took something so overwhelming (I have student loan, auto and credit card debt) and made it seem manageable. To see the debt on paper, with an easy payment plan was actually calming. Can you imagine? Calmed by looking at debt! In reality, it's watching debt dwindle that soothes the soul.

Once you have your soothing plan in place, start an automatic payment schedule from your online banking center and forget about it. There's no need to stress or worry, because you're drop kicking the debt devil every month, automatically. If you don't want to completely push it out of your mind, put up a wall chart and note how each month, the amount owed continues to decline. After awhile, you can begin to move more money into savings and watch that line rise. It may become your favorite piece of art.

Freeze It

I'm sure you've heard this trick before--freeze your credit cards. Just put them in a container of water and stick them in the freezer. Thawing them will take too much time and will provide you a chance to rethink that crazy purchase.

Personally, I think this tactic is ridiculous. I tried it back in college. Being a resourceful gal, I simply ran the ice block under some hot water and was out the door for a useless shopping spree in no time. Perhaps the ice will perform a Jedi mind trick on some folks. It didn't help my compulsive behavior back in the day.

Another suggestion is to cut up all your cards. That's a great idea--until you have to rent a car or purchase a plane ticket. And if I refer to my college self again, I recall doing that dandy trick and then using the account number off of my bill to order something online.

But the concept remains the same, whether you douse your cards in ice and scissors or not. The point is to create some barrier between you and the spending behavior. For me, seeing a visual of the debt I have stops me in my tracks. I have a wall chart I created by following the plan in Your Money or Your Life. Your Money or Your Life is by far the best book for frugal living in print. It addresses the larger social and environmental implications of our choices and asks us to carefully examine our spending behavior in relation to our values. It also suggests putting up a wall chart that notes income, debt and savings. Seeing cold hard numbers has done more for me than the freezer ever could.

Get Help

Perhaps you've reached the end of your debt rope and are about to hang. Once again, fear not! The non-profit organization Consumer Credit Counseling Services can help you. Make sure that you choose a credit counseling organization that does not require large fees or makes promises of your debt disappearing without any effort.

Be prepared. If you decide to consolidate your debt and begin a repayment plan with a CCCS program, you will be asked to cut up your credit cards and will be booted out of the program if you use them. But for those deep in debt with no way out, it is an excellent service. They will negotiate with your creditors for you (legitimate branches have already developed partnerships with credit card agencies) which will often result in a reduction in interest rates, sometimes reducing rates to zero.

However, if you have a stellar credit rating, joining such a repayment program may damage your credit report. That doesn't mean you shouldn't ask for help. It may be a good idea to seek debt counseling services even with good credit, as they may be able to offer other suggestions. Call credit card companies and ask for a reduced rate. Threaten to move your balance to a company that has given you a better offer. It may take a few calls, but be persistent. They want your money and will work with you to get it.

Generate Income

Obviously, the more money you can put toward your debt, the faster you'll see it disappear. If you have an iron will, you may choose to take a second job to knock out debt in record time. If you do this, please tell me about it. You are like a god to me, and I must know the power of your ways.

For the lazy among us who would rather get a hot cattle prod in the eye than work more, there are other ways to find extra cash. Cutting back in areas where you currently overspend is probably the easiest. You can pick through this blog to find ways in which to cut spending.

Before you reach out to purchase that new item, ask yourself the following questions:

1. Do I need it? It's important not to confuse want with need. It's also important to note that it's perfectly fine to have wants. But if debt is keeping you awake at night, make sure the want of this new object is greater than your want for peace of mind.

2. What is the true cost of this gadget? This question has two parts: what is the environmental and social cost of this item, and how long will I have to work to pay for it? Purchasing a facial or massage from someone who uses eco-friendly products produced locally doesn't have near the impact that a new plastic gadget made by a nine year old in India has. And although you may think you make certain amount per hour at your job, remember all the costs associated with working. Figure out your real hourly wage by including the time it takes to get ready for and commute to work. Don't forget to include the cost of gas, specialized "work clothes," meals on the run and other hidden costs. After you've gathered all the figures, determine your actual hourly wage. Is that gadget worth working that many hours to own?

3. Do I already own something that will do the job? You can make your own skin care products from pantry items or cut up an old t-shirt for cleaning rags instead of buying something to take care of those needs. Get creative and see if you can use what you already own.

If you've asked yourself all those questions and still want to buy the item, wait. Find what amount of time works for you. If in a store, I need 10 minutes. If it's an online purchase, I need 24 hours. Other folks' "sanity regaining time" may be shorter or longer. The point is simply to step away so that the shine of the new gem doesn't distort your view. If after the break you decide you still want it, by all means, buy it.

The media bombards us with stories about how in debt we are. It's not a lie. I just don't think we need to be afraid of it. Quite frankly, the culture of fear we're steeped in these days is wearing me out. Credit cards can be extremely useful tools and we need not treat them as if they are our masters. With persistence and mindfulness, we can all eventually reach the stage of becoming mythical creatures who pay our credit card bills in full each month.