Comments on: Survival Debt – What’s That?

By: Jake Blake

Jake Blake — Sun, 14 Jan 2007 17:45:32 +0000

It is great to see that there are people out ther working hard to get there financial house in order. Keep up the great work!

http://www.millionsinthemaking.blogspot.com

By: Jack

Jack — Thu, 11 Jan 2007 17:24:54 +0000

Congrats! I wanted to share my story with you because it is stories like these that have enabled me to reach my 2006 goals. I knocked out $36,000 in non-mtg. debt and put just under $18,000 towards my portfolio with a household net income under $100K. I now have only 5K left in non-mtg. debt which, I am knocking out next month. I will say it was a tough 2006, but worth it. Also, my 2007 goal it to contribute 5K a month towards my portfolio which, I will be on track with that starting March 1st. What works for me is that I plan out my whole years expenses and income in an excel spreadsheet. Just like a successful “corporate business” you ALWAYS know what “household business” income and expenses are coming in and going out…ALWAYS!Talk about taking the stress of money out of your life. I hope someone is inspired by my story. Good Luck!

By: Nancy

Nancy — Thu, 11 Jan 2007 06:23:22 +0000

Your blog rocks, and I’m blown away that you knocked your debt down by almost $14K last year. About 15 years ago I was about where you’re at, and it took me a lot longer … but I got there! Not totally debt free but entirely manageable. One thing that has really helped is focusing on the big picture – ie., net worth. (when I started, that wasn’t so great either!) Even now, when I have a temporary cash-crunch, reminding myself of my overall net worth helps prevent a spending spree in favour of keeping on an overall good course. For the record, when it came to choosing between reducing debt or investing (in Canada, it’s RRSPs – equivalent of… is it KO1s?…) I opted to invest. It may not have technically been the better move, but it just felt better, more inspiring, to see stuff in the Assets column. Kinda put the Liabilities column into perspective.
Cheers to your 2007!

By: Tricia

Tricia — Tue, 09 Jan 2007 05:10:21 +0000

anon – I don’t think there is anything wrong with charging groceries if you can turn around and pay it off. I would do that to get rewards if we didn’t have so much debt. The problem is when you have to charge the groceries and you can’t turn around and pay it off. It’s almost as if credit cards have turn into a way to meet budgets when there isn’t enough income.

By: anon

anon — Tue, 09 Jan 2007 01:49:04 +0000

What’s wrong with charging for groceries as long as you keep the spending within budget? My family budgets $120/month for groceries so we try to stick to $30/weekly trip. We pay with credit to get the credit card rewards, then pay the balance off in full at the end of the month. Takes discipline but we manage to stick with it.

By: Karen

Karen — Mon, 08 Jan 2007 22:03:10 +0000

There is a difference between spending your grocery money on frivolous purchases and having to charge necessities and finding yourself in a bind because you did not save for emergencies, and well, life happened. Credit card companies know exactly what they are doing by extending more credit than customers can afford. The grocery (or diapers, or other necessity) money is spent on credit card payments and interest, sometimes in the “loan shark” category. Credit card companies are not your friends. No one should be granted credit limits that there is no way they can repay. And preying on college students? Criminal.

By: Anonymous

Anonymous — Mon, 08 Jan 2007 21:44:59 +0000

Thanks so much for posting this. I have been living off of my home equity line of credit for several months now due to being laid off. In addition to having to deal with the stress of my job search, I am also dealing with the financial crisis I’m in. I’m scared. Of losing my home and never getting out of debt.

But reading that you were able to reduce your debt by $13k in one year gives me a bit of hope.

By: Get Rich Slowly » Carnival of Personal Finance: Financial Superheroes Edition

Mon, 08 Jan 2007 20:01:04 +0000

[...] Tricia at Blogging Away Debt writes about the nightmare of survival debt, the type of debt some people incur just to meet basic needs. She’s been there before, and she writes about her experiences. [...]

By: Maria

Maria — Mon, 08 Jan 2007 19:35:05 +0000

The title “Survival Debt” says it all. You do what you have to survive but when you find yourself not able to buy groceries because you have used your cash on clothes or entertainment, something is definately wrong.
Once we get back to what is really important, the basic necessities of life, the other stuff is viewed as ‘wants’ and not ‘needs,’ then we are able to stop surviving and start thriving.

By: Anonymous

Anonymous — Mon, 08 Jan 2007 19:24:19 +0000

It’s all about what works for you. For most people, there is a discipline imposed by carrying cash and never spending what they don’t have. My problem was that I didn’t keep track of all of the little cash purchases. There would be a drink here, lunch there, a newpaper from the newsstand. And after a few days, I couldn’t say where it all went, but I needed more cash for purchases that were actually important, like the groceries.

These days, I use credit cards, but I use them the way you describe. If I don’t have the money right now to pay off the debt in full, I don’t charge it. However, now I have a record of exactly what I’m spending, how often and where. I suspect for most people, that’s what a debit card could do for them.

One of life’s lessons is to not spend money you don’t have or can’t afford to spend. Use the tools that make that work for you.