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One Year After Paying Off Credit Card Debt

one year after paying off credit cardsWe’ve had so much going on for the last couple of months that I actually forgot our one year anniversary of freedom from credit card debt. We paid off the last of our $30,000 credit card balance in  on November 27, 2012 and haven’t looked back. In past years, we were able to pay off credit cards, but ran them back up within a few months. What happend this time that kept us out of debt?

You Can’t Stay Out of Debt if You Don’t Have Goals

We never stayed out of debt in the past because paying off Visa and Mastercard meant lots of available credit to buy more things. We didn’t have a purpose for our money. To keep free from credit card debt, you have to know how much you make, how much you need to spend for necessities, and what your short and long term goals are. If you know what you want to do with your money outside of shopping to cure boredom, it’s easy to plan how to get there.

When you don’t have a purpose for your money, it’s easy to spend it on silly things. Now I know exactly how much I have to save each month to max out retirement contribution and our HSA account. We also have goals of paying off our house and buying more rental properties. I don’t want new shoes when I see the bigger picture of being able to work less or retire early.

You Can’t Stay Out of Debt If You Follow the Herd

Society encourages debt. You can finance anything and bring it home today. Most people think about if they can afford a monthly payment rather than how the purchase will affect their future. People want things they see others have. We are often judged on how we appear and what people think we should be driving or wearing. If you want to stay in debt, there are plenty of people to help keep you there.

I know frugal people, but the real community I’ve found that I hold myself accountable to is online. If you don’t have friends and family members who share your goals, find some new ones. I’m not saying to cut out everyone in your life, but you can’t let others take you down with them. Learn to follow the right set of Joneses.

You Can’t Expect Your Children to Stay Out of Debt if You Don’t

Maybe this is the bigger reason we are going to stay out of debt. Having a child is a motivation like no other. While it is possible to not follow in the footsteps of your parents, like Laurie said recently, we do inherit many of our behaviors that make it harder to change.

If your parents smoke, you are more likely to smoke. If your parents are violent, you are more likely to be violent. If your parents made lots of money mistakes, you are more likely to make money mistakes. No one wants their children to struggle with the same issues that caused problems for them, but you can’t tell kids to do as I say not as I do. If you do something you don’t want your child to repeat, stop doing it. I want to be debt free and be smart with money so my daughter will have the tools to follow that path rather than setting her up for financial failure.

What You Can Do To Stay Out Of Credit Card Debt

There are lots of can’ts in this post, and I always like to keep it positive, so here is my advice for staying out of credit card debt.

  1. Make paying off credit card debt your focus. IT CAN BE DONE
  2. When you have six months left to debt payoff, make goals for a year, five years, and ten years.
  3. Be your own person, and don’t jump back in with people who will make you want to waste money.
  4. Take some time to think about how good it feels to be out of debt. This is reason enough to never buy things you can’t afford.
  5. Spend money. Yes, it’s OK to spend money on things you value and that bring you happiness. Just make sure you have money to pay for them before you buy.

I have to say that 2013 has been one of my best years, and I look forward to every day, even the days when bills arrive because I know I will be able to pay all of them without going into debt. I’d love to hear from others who have been debt free for a while or from those in debt about your plans for when you do pay everything off.

When is your deb free day? What is the goal for your money after that?

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About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

54 comments

  1. Congrats again on paying off all of your credit card debt! I’ve got an auto loan that I’m looking forward to paying off this year. It will be nice to have an extra +$400 in my pocket every month.
    MMD recently posted..Getting Serious About Building Up My Multiple Streams of Income in 2014My Profile

  2. Great post! We’ve got a ton of student loan debt to pay off, and we are looking at 2016 before we get it all paid off. After that we plan to do more investment in real estate- we have two rental properties but would like to have more!
    Dee @ Color Me Frugal recently posted..8 Ways to Save Money in the ShowerMy Profile

  3. I’m glad to see that you included “You Can’t Expect Your Children to Stay Out of Debt if You Don’t” in you post. This is exactly why we’re including our kids in the process of getting out of debt. They know that we’ve made mistakes and see the consequences. Hopefully that will give them a unique perspective on how financial irresponsibility can affect the rest of your life! Congrats to you on your one year anniversary!!!
    Travis @debtchronicles recently posted..Date Night With Gourmet Meal, Movie, and More for $15?!?!?My Profile

  4. This stopped me in my tracks -> “You Can’t Expect Your Children to Stay Out of Debt if You Don’t.” I don’t even have kids yet but it’s so important to pass along good habits, and I absolutely believe that if you don’t get out of debt yourselves your children will pick up the habit. Great reminder, Kim!
    DC @ Young Adult Money recently posted..How I am getting a free $400 for travel in the New YearMy Profile

    • Kids certainly keep you in line. I got a lot of “because I said so” when I was a kid, so I’m trying not to do that, although after about 500 questions sometimes that’s all you want to say.

  5. We paid off our last debt a few years ago and it felt great! Now we’re just left with mortgage debt which seems like it will go on until the end of time. I can’t wait to pay our house off too.
    Holly@ClubThrifty recently posted..Credit Card Rewards: My 2013-2014 PlansMy Profile

  6. Kim, this is one of the most motivating posts I’ve read this year. I just love what you said about following the right set of Joneses. I also LOVE what you said about not telling your kids “do as I say and not as I do”. This is been one of the rules that has motivated us to stay on track with our budget and debt payoff plan. Not sure quite what our debt payoff date is yet, but after that, our goal is to save, give and save and give some more. :-)
    Laurie @thefrugalfarmer recently posted..How to Get out of Debt: Beware of the Self-Justified Pity PartyMy Profile

  7. Excellent post Kim! Congrats on your debt free anniversary! I think having kids really makes you want to be a better person and a better role model for them. I definitely agree that kids model their parents behavior and “do as I say and not as I do” is hypocritical and never works. I know someone who likes to buy cool new things for himself…and his teenage daughter is the same way. No matter how much he tells her that she can’t have everything that her friends have, his lecture falls on deaf ears…most likely because she sees his behavior.
    Andrew@LivingRichCheaply recently posted..Do You Judge Someone’s Financial Worth By The “Cover”?My Profile

    • I tell myself all the time that if I do XYZ, I can’t complain if my child does it too. I don’t really have any terrible habits, but it makes you think about the things you buy, eat, and do to keep healthy.

  8. That sounds awesome! I cannot wait until I can celebrate something similar to this.
    Alicia @ Financial Diffraction recently posted..Christmas on a Budget.My Profile

  9. Great post Kim! As others have said, the point about not being able to expect your kids to stay out of debt if you can’t is such an important one. Kids, especially at your daughter’s age, are such sponges. We see it with our daughter and she is starting to form basic ideas about money and we had a discussion with her about it this weekend actually when she wanted something. Congrats on the milestone! :)
    John S @ Frugal Rules recently posted..6 Fun and Frugal Christmas Traditions to Start This YearMy Profile

  10. It is really a great feeling being credit card debt. Congrats on getting there!! Hope next year is a great one for you.

  11. Nice work Kim! I remember mine was back in July 2012. It was a great day for me and my goals where then and now to grow my wealth. I am slowly doing that and I still use my credit card for every purchase. I just pay it off each month, so I don’t incur interest.
    Grayson @ Debt Roundup recently posted..Why I Hate Holiday ShoppingMy Profile

    • We use our credit cards for as much as we can, but like you, we pay them off every month. I never intend to pay a penny in credit card interest again.

  12. Love, love this post, Kim! I agree one of the biggest reasons people go back into debt after they just get themselves out of it, is because they lack goals. Without purpose, you have no reason to say “no”. To me, once you give your money purpose, it becomes so much easier to say “no” without feeling deprived, which is also important. No one wants to feel deprived and when we do, it makes it even harder to say “no” the next time we see something we want. And, of course, you know that I wholeheartedly agree that kids learn from their parents, which is why we need to be good financial role models. Kids are always observing us, even when we don’t realize it. You’re setting a great example for your daughter, Kim!
    Shannon @ The Heavy Purse recently posted..Giving and Gratitude Make Christmas Truly MagicalMy Profile

  13. Setting a good example for your kids is a great point, that’s perspective I don’t have yet. My parents’ influence on me is the only reason I’ve been able to avoid a deep hole of debt!
    FI Pilgrim recently posted..Would You Become Self Employed For Less Money?My Profile

  14. We paid off everything except our mortgage this summer and man did it feel good!

    Now we’re focusing more on after tax investing in index funds. =)
    Mrs PoP @ Planting Our Pennies recently posted..Pimp The PoP’s Garage – Part 4 – Get Rich By Enduring ChaosMy Profile

  15. Such a great post Kim! It really is easy to get caught up in what other people are doing and have it negatively affect your budget.
    Tonya@Budget and the Beach recently posted..BATB TV: 12 Days of BudgetsMy Profile

  16. Yes I do believe that the parents are the rule models of their kids. If you’re doing the wrong action then expect earlier that your child will follow your wrong behavior too.
    Teffany @ Critical Financial recently posted..Coming Soon To A Doorstep Near You: Amazon Drone DroppingsMy Profile

  17. Congrats on making it a year! I 100% agree on the importance of big-picture goals. The other nice part about getting those big things handled first is that it gives you more freedom with the rest of your money. Hopefully not to rack up debt, but to be able to enjoy it guilt-free.
    Matt Becker recently posted..How to Know When You Need Life InsuranceMy Profile

    • I still feel a bit odd about spending money because it brings back memories of the debt, but I really don’t ever see us getting into trouble again unless something crazy happens.

  18. One year! How cool is that???? We have very little debt, but what we have is pretty much on hold until my kids graduate from college. At that point, then we’ll pay off the houses. That’ll wipe our slate clean.

    • Twins in college would certainly be a challenge, but I have no doubt you’ve been planning for years. Clean slate sounds really good.

  19. Congrats, Kim! Staying out of the cycle of debt seems to be almost as difficult as digging out in the first place.
    I also couldn’t agree more about it setting an example for kids. Your daughter is lucky to have you as a financial role model, and will likely learn how to better handle her money early on because of the examples you’re setting.
    Broke Millennial recently posted..Sales Lessons from the StreetsMy Profile

  20. Congratulations for being free of credit card debt. I love that you pointed out that one of the things that holds you back is societal norms – we are definitely a nation of consumers, so you will have to break from the pack and do your own thing if you want to stop yourself from drowning in debt. It may be hard, but the end result is so worth it and you are a living testament to that!
    Laura @ RichmondSavers.com recently posted..Travel Rewards: Two Free Boston to Dublin Round-Trip Flights with One Credit Card SignupMy Profile

  21. Hey Kim, congrats on the full year of debt freedom! 30k is a lot to work through! Personally, I don’t have a debt free day. I’ve never had a butt load of credit card debt, and I attribute that to one major thing you mentioned, goals! I have goals for saving, investing, starting new businesses and more. If I was to get into debt, it would kill my goals!
    JRod with CNA Finance recently posted..Financial Lessons I Wish I Could Teach My 25 Year Old SelfMy Profile

  22. The best type of credit card is the one where you don’t know the interest rate. What I mean by that is if you’re paying it off every month and never carry a balance. Use the rewards to free travel or cash back to enrich your own finances.
    Charles@gettingarichlife recently posted..How I Was Able To Buy Property 4.5….Breaking The Real Estate MythMy Profile

  23. Yay for one year debt free! I don’t remember my actual debt-free anniversary, I should look that up just for curiousity’s sake. Like you said it’s really important to continue to have financial goals, so you don’t slip back into debt, or lose your focus on the future. Right now our focus is saving money for a rental property we hope to buy sometime next year.
    KK @ Student Debt Survivor recently posted..Bad Retirement AdviceMy Profile

  24. When you’re six months away from being CC debt free, it can be easy to get tired of it all. Writing up some goals at that time is the perfect way to keep your eyes on the prize!
    Lisa E. @ Lisa Vs. The Loans recently posted..Frugal and Eco-Friendly DIY Gift BowsMy Profile

  25. I like it when you said we need to have goals if we want to be debt free. Your tips on how to stay out of debt are all good but they are not applicable to those who simply cannot afford to pay anymore  even if they want to. I was in that boat several years back but I was able to fight my $63k debt without filing for bankruptcy.
    Mel Thompson recently posted..Why Debt Collectors Threats Of A Court Summons Show Their WeaknessMy Profile

  26. I just hate interest. I can’t imagine keeping a balance on a credit card because I don’t want to part with my money for that convenience. Interest adds up! I understand when times are tough and you have to use the credit card but in my current state, I always pay off my card each month.

  27. That’s awesome! Our debt free (goal) date is September 20, 2016 for total debt. But I want our credit card debt wiped out by my 25th birthday (June 5, 2014!). Can’t wait to get it paid off so we can invest like crazy, plan a couple of international trips, and start saving for a house.
    Erin @ Gen Y Finances recently posted..Foreign Transactions Fees?My Profile

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