How we got out of debt at NYCDUMPLINGMAMAS

All of the fashion deals we’ve been dishing out to you guys have been over-whelming and exciting, and in our technological advanced age, it is just so easy to point, click and buy.  Consumption is just way soo easy these days.

So we do want to urge our readers that none of this stuff is really worth putting yourself in debt for.  We know first-hand, for we were in debt (a lot of debt) in our early 20’s.

First, how I DID NOT get out of debt:

  • No fairy godmother with a magic wand that magically erased credit bureau databases (we wish)
  • No hedge-fund sugar daddy.  (we wouldn’t want that anyways)
  • No publishing clearinghouse folks showed up at our door with a 100k check (we can always dream)
  • No we didn’t win the lottery (we’re  dreaming a bit more)

No quick fixes, but just a whole lot of hard work and honesty.

Here is how we did get out of debt: (and no, we’re not talking about mortgage debts – for we will forever be in that for the rest of our lives)

1)      Stop Spending.   I know this sounds simple, but it’s probably the most effective thing you can do.  I mean it, don’t spend a thing.  Don’t make an excuse for spending.  Just stop.  One thing we did was literally dunked our credit card in a tub of water and placed that in the freezer.  So when we decided that we “MUST HAVE” that pair of shoes, we literally had to defrost our credit cards to actually do so.  Trust me, it worked

2)      Admit you have a problem.  Admitting I was broke was probably the 2nd hardest thing after not spending.  Here I was, an college educated woman living in the big apple – unable to pay my bills in full.

3)      Face the facts.  Gather 3 months of bank statements and put all your spendings down on a spreadsheet, and categorize what you’re spending your money on.  I was shocked to discover I was spending north of $100 on things like taxi cabs when the good ole public trains worked just as well.

4)      Let go of the Princess Myth.  Look, so many of us have into what I call the “princess myth”.  We all deserve to have every material thing we’ve ever wanted – a luxury car, designer clothes, rich husband, etc.. I blame the media for shoving this down our throat through shows like MTV’s Sweet Sixteen, etc..  Really think about what would make you happy.  Most likely it’s something that doesn’t cost you a penny.

5)      Create a Needs vs. Wants list. Take your sheet with want you spent during the past three months and place them in either the Needs- things you need to survive, like your car, electricity, gas, and food or Wants- things you could eliminate immediately and still be able to survive like- cable TV, trips to the hair dresser, your BMW, and in my case, a soy latte at my local French coffee shop.

6)      Live below your means.  This is the reason why so many of us are in trouble. Keeping up with the Jones, means you may end up as broke as the Jones. You don’t need a luxury car and in some places you might not need a car period. You don’t need a flat screen TV or, unless you work from home and/or work in a field that requires one, you don’t need a computer- most local libraries have computer rooms with free internet. Take a peek at that needs list and see if there’s a way you can change or reduce the level of the needs. For example, we had two cars and we got rid of the one with the higher insurance and monthly payment.

7)      Remember This Too Shall Pass. Being broke isn’t the end of the world, especially if you’re actively addressing the issue. It’s often in times of great adversity, that great ideas are developed.

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