Top 10 I Learned from Becoming Debt-Free

As promised, here are the top 10 things I learned from hitting my goal of being debt free.

1. Quit going deeper in debt! In other words, the first step to get out of a hole is to stop digging! I know it's common sense, but you wouldn't know it with how some people act. I was that way for a while.

2. Budgets aren't bad. A budget isn't paying your bills and then spending the least money possible. That's no fun, and it's not wonder budgets get a bad reputation if that's what people think they are. A budget, or spending plan if you prefer, is decided how you are going to spend your money before you get it.

3. Things go better if you have someone to talk to. I love spending money on computer stuff. My wife is super-frugal. Together we balance each other out nicely. From what I've heard, this is very common for married couples but you wouldn't know it unless you work TOGETHER to be smart with your money. For those of you who are single, find someone you respect & trust when it comes to finances to talk to.

4. Be out of debt & have an emergency fund before you buy a house. We nearly lost ours when I was laid off because we didn't do this. This is where about half of our credit card debt came from.

5. When buying a house, be sure you have enough money to buy stuff to put in the house. This goes along with item #1.

6. Keeping with the house theme, don't buy more house than you can afford. When we bought our house, the crack-headed rules they have would have let us buy a massively expensive house. If we bought the house they said we could afford, we would have had enough money to pay the house payment, electricity, and enough gas to get to work and back.

7. Things go much better when you have a goal to shoot for.

8. The goal has to have a time limit. Getting debt free went so much faster once we had a set time to hit the goal: Christmas 2007.

9. The goal must be believable. I'm sure we didn't do as well as we could for a while because it just seemed like such a huge deal.

10. It is good to have rewards for hitting goals, just make sure they are in proportion to your achievement and keep you going in the right direction. For example, if your goal is to lose weight, don't celebrate by pigging out at an all-you-can eat buffet. Going out for sushi may a good way to enjoy that - you'd be continuing your habit of eating healthy. Just don't eat too much of it!

When we started trying to get out of debt, I had a goal of paying off our credit cards and write down "buy a new laptop" for the reward. That would have delayed paying off the student loans at least a month!