and ramblings on everything in between
A few years ago I bought into the whole money makeover thing that made Dave Ramsey famous. He was so convincing. He was so certain.
As I dug myself out of $14,000 in student loan debt, I held onto my credit card as a safety net. I had $1,000 in a savings account for emergencies (baby step #1) but that didn’t feel like enough. I stopped using my card in January 2012 and told myself that if I could go a year without charging anything, then I would be ready to cancel it.
January 2013 rolled around and the card had stayed hidden in my drawer all year, never seeing the light of day or a cash register. I made my final student loan payment and cancelled my credit card on the same day last January. It was thrilling and nerve-racking all at once.
One year later, I honestly haven’t regretted my decision once. Not once. There’s never been a moment when I’ve thought, “Man, I wish I still had that credit card,” or been financially caught between a rock and a hard place that I couldn’t get out of without credit.
As my savings account grew each month with the payments I had been making toward my loan, I started to feel more secure. Like Dave Ramsey says in his book, emergencies tend to not be emergencies anymore when you’re prepared for them.
It wasn’t a smooth year with no financial surprises, either. I unexpectedly had to replace a $200 electronic, my car needed a few repairs and new brakes and tires, and I had some health issues that cost many doctor and specialist co-pays. Despite those things, I’ve been able to continue to grow my savings each month.
Maybe you’ve been thinking about giving up credit but feel scared. I was scared, too, yet I have been pleasantly surprised by how doable life is without it. Yes, I understand it negatively impacts your credit score but I’m not worried about that. The point of becoming debt free is to stay debt free and credit scores are moot in a debt-free life.
Once you train yourself to put off purchases until you can pay cash for them, it’s amazing how few things you really need. Instead of throwing a cute candle or dress or coffee table in my cart at Target, I walk past it and out of the store without it. And you know what? I never think about it again once I leave the store. Life goes on just fine without it. Now I believe it’s more important to have financial freedom than to have stuff.
Living without credit requires a whole new mindset, but I’m here to say it’s achievable. Like I said in my post a year ago, we all have different ideas on this topic, and what works for me might not work for you. I respect that. But if you’ve ever wondered “What if?” consider looking into these resources to help you get started. Yes, it might feel uncertain and undoable, but it’s a new year and the perfect time to jump into a life-changing resolution, right? :) The future you will thank you for it.