From $45,000 in Debt to a Cash-Only Life

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Veruca Salt , the infamously spoiled little girl in the wildly popular book (and movie) " Charlie and the Chocolate Factory ," wants everything, and she wants it now . The trouble is, that a simple personification of a superficial and greedy fictional child has become the mantra of far too many folks in America today. As a matter of fact, I have run across more than my fair share of Veruca Salt's over the years, myself included.

The Trouble with Financing
I have seen the nation's secret Veruca rear her ugly head each time I have watched a client buy a house that maxed out their budget -against my advice. I have seen it in the faces of people who purchased cars from me despite the fact that those vehicles came with excessive payments and astronomical interest rates. I have observed the grounds of buying it now, and buying it on credit from computer monitors to speedboats and beyond. And while some people might argue that banks cause all this trouble by offering financing to begin with, I disagree. In my experience, it isn't financing that's the problem, it's your inner Veruca.

My Turning Point
At one point in my life, I was $45,000 in debt, excluding my mortgage. I had financed a car that came with an excessive payment and interest rate, because I wanted it now. I bought expensive items on credit cards -- that I had no business buying in the first place -- because I wanted it all. However, it wasn't until I started looking at the numbers and feeling the stress from my collective debt that I realized how much I was behaving like a spoiled rotten little girl.

I Amortized … Everything
My wakeup call came when I amortized my debt. I looked at how long I was paying for the things I wanted now, but I also looked into the financial crystal ball of days to come an realized how much I was actually paying for those things over time.

How Much?
I was paying over three to four times more than what the item was originally "worth", thanks to my inner, unquenchable Veruca. Things had to change, and change they did. When I lost my job five years ago, there was no money to continue paying those creditors. It was time to freeze my assets and unload my debt.


The Payoff
When I lost my job, there wasn't enough money to pay my Visas, my Mastercards or my American Express bills anymore. I was barely scraping by after taking a pay cut for my new job, and I was making one-third of what I was used to. My only choice was to settle my debts, one by one and negotiate a lower payoff on each. It took some time -- three years, in fact -- but I can finally come to the table and say I am debt free and cash rules. I was able to settle all of my debt for almost one half ($25,000) of what I owed. And while my credit suffered its share of bumps and bruises because of the debt settlements, I know that credit can always be rehabilitated.


Cash is King
In my world nowadays, cash is king. If the cash is not in my bank account and if the "thing" I want is not in my budget, my whatever-it-is isn't getting bought. The simple act of "sleeping on things" and delaying instant gratification has saved me more money in comparison-shopping and avoiding impulse buys than what a million golden geese could lay for me in a lifetime.

Today, I still want it all, but I know "it all" can wait. I put my inner Veruca to bed, and found out that my life was a lot more like a candy store than I ever could have imagined -- golden tickets and all -- because, these days I'm in control of my money, instead of letting my money being in control of me.



More from this contributor:
Should Freezing Student Loan Rates Be Up for Debate?
Is the Post Office Bill Just Another Bailout?
The 4 Places I Don't Swipe My Debit Card Anymore

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