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Tightwad Tidbits for Frugal Living  

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Debt Repayment

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Frugal people do not waste money paying interest.  If you want to live a lifestyle of thrift, you must stop using your credit cards.  You don't have to carry around a bunch of cash.  Just use a debit card instead of a credit car. 

You will never pay off your credit cards if you only make the minimum payment.  Minimum credit card payment as set up so that you will never pay off the balance.  The credit card companies want you to keep charging.  The only way you will ever get rid of the balance is to ignore the suggested payment and pay as make as high a payment as you can towards your bill.

When you are working to pay off credit card debt, and have several credit cards, there are two ways that you can work on the balances. 

The "snowball" method is to pay off the credit card with the lowest balance first.  Minimum payments are made on all other credit cards.  Every resource possible is given to the one credit card to get rid of the balance.  When it is paid off, the money that was going to pay off that card is applied to the card with the next lowest balance, and again you only pay minimum payments on other credit cards.  The idea is to attack one card at a time with vengeance.  This method is thought to work the best, because it gives more encouragement as each card is paid off.

The second line of thought is to pay off the card with the highest interest rate first, and then when that card is paid off, to work on the next card with the highest interest rate. 

Financial experts disagree on which method to use.  While the second method may save more money,  you are more likely to stay on course with the "snowball" method.

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Frugal footnotes:

Here is some additional frugal advice to pay off debt.

- Learn to find just as much pleasure in paying down debt as buying new things.
- Don't fall into the "all or nothing" trap.  Don't become discouraged that you can't pay it
all off tomorrow.  Head in the right direction, and you will eventually get there.
- There are situations where debt is impossible to repay.  If you have to declare bankruptcy, clean up the mess, and get on with your life and learn from it.








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