What I’ve Learned Living Without a Credit Card for Six Years

One of the top New Year’s resolutions is saving more and spending less.  Of course, that means not living beyond your means and tearing up credit cards.  For most people this is easier said than done.  In fact, the average credit card debt per household is $8,400.

Six years ago, I didn’t have the choice.  Because of a really bad divorce, lawyers’ fees wiped out my savings and 401(k).  Add to that the housing crisis in the early 2000’s which had us carrying two mortgages and needing to use credit cards way too often and I was in a really bad financial position.  I was forced to declare bankruptcy.  This meant a bad credit rating and no credit cards.  I’ll be writing in another blog how you can still survive once you’ve declared bankruptcy but here I want to talk about the important life lessons I’ve learned – any my kids have learned as well – about living without credit cards.

You become honest with yourself.  Too many people feel that they need to spend to keep up appearances.  They’re buying clothes, electronics and vacations they simply can afford.  When you don’t have a credit card you no longer can pretend to anyone else or yourself.  If friends ask you to meet up for dinner or a drink just admit you can’t afford it but then suggest getting together for a dinner party at home.  It becomes incredibly freeing to simply admit you don’t have the money to buy something or go somewhere rather than making up excuses.

You become self-sufficient.  Someone to plow the driveway, mow the lawn or blow the leaves is a luxury.  Sure, it can be back breaking work but when you’re finished and can sit back, pop open a beer and realize what you’ve accomplished on your own it’s a pretty great feeling.  Plus, it’s great exercise.  I often refer to my backyard as my private gym and Mother Nature my trainer.

You learn about nice to have vs. need to have. Yes, you can live without Netflix and two bottles of nail polish, a base coat and a top coat is way cheaper than thirty manicures.   A dinner out becomes a once or twice per month treat.  I’ll admit it did upset me when my kids saw all their friends getting tons of expensive gifts for Christmas and birthdays and I couldn’t do the same but when you don’t the money, well, it is what it is.  I’ve come to realize that my kids learned an important lesson, the value of “stuff.”  They’ve often commented to me how they can’t believe how their friends don’t appreciate all the gifts and things they’re given but rather they expect it.  They’re surprised how their friends’ parents will simply add money to their spending accounts as if it’s a never-ending supply.  We’ve had to delay purchases of things until the following month or they’ve saved up for something they really want.  They started babysitting at 13 to earn money for things that I simply couldn’t afford.  I now see that their understanding of budgeting and financial responsibility is the best gift I could have given them.

You figure out what matters most to you – and then how to pay for it. Time together as a family is a priority but with three kids (and two step-kids) a night out at the movies or a trip to an amusement park or even bowling adds up.  A family vacation must be carefully planned out.  Both my daughters do All-Star Cheer, an extremely expensive sport.  But, not only is this what they love, it’s taught them important life skills – self-confidence, leadership, teamwork and tolerance.  It’s something that I want them to be a part of. They know, however, that if this is what they want they need to have skin in the game.  Along with the fundraising I do, the girls fund raise, babysit and put birthday and Christmas money towards the cost.  Bottom line – if you want extras then you need to find extra income.  A seasonal or permanent second job might be required.

It’s still important to give back.  No matter how tight my budget is I find ways to give back.  We turn in our recycling bottles and donate that money. If you can’t give money, give time at a homeless shelter or volunteer with a charity.  Donate clothes to a family who has lost everything in a fire.  There’s always someone out there who has it harder than you and giving back gives you an appreciation for all you have.

Today, after six years, I’ve gotten a credit card.  It actually scares me, and I will only be using it in the case of an emergency.  I know I’ve taught my girls the slippery slope of credit cards – they know how to budget, save and live within their means.  Life’s so much easier without debt.