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Master The CardSay Goodbye to Credit Card Debt ... Forever!
By Joe Paretta
BALBOA PRESSCopyright © 2010 Joseph R. Paretta
All right reserved.
Chapter OneMIND OVER MATTER
"What's the matter?"
How many times have you heard that question? The most common response to that question is "Nothing," which frequently translates to "Leave me alone!"
Now, however, something is "the matter" and most importantly, you are facing it, and not hiding from it. GREAT!!
Maybe this credit card debt has been gnawing at you for a long time. Maybe it has frustrated you, angered you, but you didn't know what to do about it. Fear not! You are NOT helpless!! Others, like me, have climbed out of the debt hole and are now standing solvent ... happy and at peace. You will, too!! This book will show you how.
The first thing to know is that this "climb from debt to freedom" is a psychological one. In fact, it's as much psychological as it is material; for some, it might be EVEN MORE psychological than material. By this, I mean that if you believe that you can be debt free, you will be. If you see yourself as debt free, you will be. Ask yourself what a life of debt freedom looks like just for you. How would you feel? How would you think? How would you act ... on a daily basis? How much different would this life be from the one that you live now? Many people cannot imagine this type of life because all they've known until now is payments, overdue notices, collection calls, and at the very least a paycheck-to-paycheck existence. Of course, this weighs on your mind; it's how you've been conditioned for so long. So with knowledge and a determined effort to rid this toxin known as credit card debt from your life, your mindset will ultimately change from one of poverty to one of prosperity.
As you forge your way, there will be some days when you will feel great, like you are making huge strides toward "Zero Balance Land." And you are, simply because your thoughts are now focused on the positive, proactive steps that are required to reach solvency. Your actions then are "reflections" of your thoughts and when you progress with your goal in mind, there's only one way to go.............FORWARD!
Then there will be other days when you will want to "throw in the towel" and give up. The "unexpected" events of life happen and usually at the "wrong" time (like there's ever a right time for the problems of life). The car breaks down, your child breaks his/ her arm, the water heater springs a leak, and (add your own items here). These are the circumstances that will test your endurance to see how "serious" you really are about getting out and staying out of credit card debt. This can happen at any time: as soon as you decide to begin your journey to freedom, when you have made a significant dent in your indebtedness, when you are nearing total freedom from debt or at any other point along the way. In other words, be ready every day to face this challenge. I'm not saying to expect it every day. You don't want to taint your voyage with negative thoughts, just like you wouldn't want to fear getting lost every mile of the way along a cross-country trip. However, be prepared. What will you do when these things happen? How will you respond? It's not a question of if these challenges occur; the question is, "How will you act when they occur?" It is a choice — will you be proactive or reactive? Will you remain victorious and positive and consider alternatives to encounter this unforeseen occurrence, or will you be a victim whose negativity blocks you from envisioning creative solutions to these events, solutions that will help you to avoid debt and keep you on the road to affluence?
Again, it is a choice.
Trust me, expect both types of days along the way. There will even be days when you will not think about your debt at all. Imagine! It might be hard to believe now, especially if you are a frequent card user who habitually "swipes" it for everything from a twenty-five-cent pack of gum to a $2,500 vacation. But yes, there will be times when your credit cards will NOT weigh on you. You will not think about using them, and you will not think about your outstanding balances. When this happens, you'll know that you are starting to get a handle on your card use, your overall spending, and simultaneously your debt load. You are reforming your habits. You'll realize that those little pieces of plastic are not necessary appendages. They are simply little annoyances which now have a gradually diminishing effect on your life. AWESOME!! That's a step in the right direction.
Let's have some fun as we embark on this journey together.
Yes, let's make it a game — dare I say a "Mind Game?" The "Mind Game," however, has positive results. You are the only player; you make all the rules. There are no losers and only one winner....................YOU!!
In this game, you must first change your mind about credit card debt. Until now, you may have thought that you had to use your credit card many times during the course of the week or the month in order to make ends meet ... or to survive. It doesn't need to be that way.
So the first "rule" is to think about how you use credit cards. It's possible that that "swiping motion" you've been making at cash registers all over town has become a "reflex action." It has become such a habit that you don't hear the trumpets blare or the chorus chant "CHARGE IT!" as that piece of plastic runs through that "friendly" device, which ultimately pushes you deeper and deeper into "the abyss." It has become a "mindless" habit. Now that will change.
To gain control of your spending, I highly recommend that you track your spending in writing. You want to make yourself accountable for every penny you spend. This may sound tedious at first, but like any habit, it will become second-nature once you get used to it. And whereas your habitual credit card use caused harsh consequences in your life, listing your cash purchases will be empowering because you will see immediately where your cash is going. It "hurts" a little when you spend cash; your wallet or pocketbook feels a little lighter. When we use cash, we actually have to part with something, and many of us don't like parting with our money. But this is really the only way to break our "reliance" on credit cards. So, writing down your purchases and their costs gets you thinking about what you buy and why you buy. This was the first proactive step I took once I decided that I was sick and tired of credit card debt.
So, here's my suggestion:
For two weeks (14 days), list everything that you buy and the exact cost of the item. I mean everything — to the penny. Don't round up or down. Be exact. Remember, we're replacing unproductive habits with productive ones, and you want an exact picture of what your spending looks like. So, be precise and accurate.
When should you start this practice? My answer is: "The sooner, the better!"
Some people are ready to start right away; others need a couple of days to get mentally prepared for this shift in consciousness and to prime themselves for jotting down all of their purchases. Decide for yourself when you want to start, but please do this. Once I got used to writing down what I bought and its cost, I started to like the process. I always had a pen on me anyway, so now I just had to get used to carrying around a little spiral notepad. Don't rely on your memory — you have a lot going on in your life between work, home, and other activities. As soon as you have paid for your items, write them all down. Don't worry about what other people might be thinking — they're probably in debt, too! The only difference is — YOU are getting out. Them? Probably not (at least not until they start making positive strides — like YOU!).
By focusing on cash payments and being diligent in listing my purchases, I saw that I could get through the day without using my credit card. I also started to cut out some unnecessary expenditures, like an extra cup of coffee or a bag of pretzels. I felt better about myself in the process.
Here is a look at one of my (partial) spending lists:
Monday, June 5
Breakfast (Egg on a roll and coffee) = $2.85
Gas = $5.00
Dinner (Turkey Hero) = $2.15
Tuesday, June 6
Breakfast (Pancakes and coffee) = $4.50
Lunch (2 slices of pizza and soda) = $3.24
Laundry = $8.00
Wednesday, June 7
Coffee = .85
Miscellaneous (Lottery) = $1.00
Lunch (Turkey & Swiss on rye, chips, coffee) = $5.62
Entertainment (Movies) = $8.00
Thursday, June 8
Breakfast (Bagel & Coffee) = $1.50
Newspaper = .50
Gas = $7.00
Groceries = $15.45
And the list continued in similar fashion. After several days of listing my expenses, I realized a few things: 1) it was easy to take a few seconds to write down these purchases, 2) I liked how it felt to "be aware" of my purchases, and 3) I spent a significant amount of money eating out. That has been reduced over the years, not eliminated (I do like to eat out occasionally), but now I keep a closer eye on this component of my spending.
Yes, you do need to go shopping for the essentials and it's OK to buy the occasional (please highlight, underline or put stars around that word) treat while you march towards your zero balances. I encourage you to treat yourself once in a while (not to a new jet-ski but to something small) so as to avoid falling prey to a poverty mentality. Now, you will think about how you will pay for things.
Keep this in mind — Nobody can get out of credit card debt by using their credit cards.
In essence, you will be trading one habit for another. You will get into a "cash habit" while breaking the "plastic habit."
NOTE — Not all habits are bad. By getting on a steady cash "diet," you will likely reduce your spending. You will think more carefully about your purchases than if you buy "on credit" and in relatively short order, your credit card debt will be reduced too, just as one's waistline reduces when he or she stays away from the junk food and makes a conscious effort to exercise — little things like taking the stairs at work instead of the elevator. You have to think about how you eat. You have to think about how you spend.
Once you start thinking actively about what you buy and how you pay for it, you will start gaining control of your spending habits. This realization will be empowering and you'll believe that you really can and will get out of debt.
You Win The Game!! It truly is a case of "Mind Over Matter."
Chapter TwoBLACK AND WHITE
OK, so you're "in the red." What does that mean? You're in debt.
No, no, I'm not condemning you. Remember, I used to be in debt, too. I was once where you are now. And as I wrote in the introduction of this book, I will help you get out of debt.
However, in order to reach "Zero Balance Land," we must face facts. No one ever got out of debt using "the Ostrich Method" — that is, sticking his or her head in the sand and hoping the problem simply goes away. That might be "fantasy land," but this is real life.
But you already know that — so let's move on.
You must know exactly how much credit card debt you have presently ... to the penny.
Studies show that most people with significant balances on their cards have little or no idea how much they owe. They estimate, they guess, they deny, but they don't know.
Frequently, debtors fall into one of three particular categories. One group approximates the amount owed (these people are often too low or even too high in their estimations.) Upon learning the actual amount owed, they realize that they'd "better do better" than take a "wild guess" about their balances.
Members of a second group, when asked how much they owe, look like the proverbial deer in the headlights as utter panic sets in upon hearing this question. Some even act as if a value judgment is being passed on them, or like the police have been called to "take them away" like criminals. NOTE — there is no debtor's prison. These people are scared, maybe guilty, because they don't know how much they owe. They use their cards "blindly" and have a vague idea that maybe they are approaching their credit limits on certain cards. Prior to the collapse of the financial industry in 2008, in these cases, a short phone call usually raised their available credit. Banks were only too happy to give these people more credit when they were making only the minimum payment and occasionally incurring the $29 or $35 late fee. The longer banks can keep you in debt, the happier they are. Banks are enablers in this case — credit is the "drug." If they see that you're "hooked," meaning you're a frequent "user" who seems unable to go without a "fix," they tempt you further, sometimes subtly, sometimes overtly.
So the question, "How much do you owe?" should serve as a wakeup call to people in this category.
A third group (the great minority) is composed of people who are able to say with certainty the amount that they owe. These people know, almost always to the penny, what their balances are and to whom this money is owed. This is not a "lucky guess." They keep close records, file their statements carefully, and pay their balances on time month after month. Regularly, they talk with their spouses, partners, children, or other trusted people about their finances. This creates an accountability factor which helps discipline these people to pay their bills.
In short, these people are "in the know." They take the time to maintain a handle on their finances and spending habits. It's no coincidence that they carry little or no debt most of the time, barring the unforeseen emergency. It's not because they are better than everyone else, or they make a six-figure salary. They've simply prioritized their finances and paid attention, instead of interest.
Our goal is to be a part of that third group. With the appropriate mindset and determined actions, you can be a part of that group.... if you truly want to be.
Now remember that in Chapter One, we established that getting out of debt is a game that you will win, so let's take our first proactive step in making this victory a reality. Likely, you've heard the statement "Knowledge is power." That is partly true. Yes, you need knowledge (or know-how) to get out of credit card debt, or to do nearly anything in life.
But without action, knowledge sits in your head, seeking an outlet. Knowledge is like water in a faucet. If you want a glass of water, simply knowing that water is in the faucet will not quench your thirst. You need to grab a glass, put it under the spigot, and turn the knob in order for the water to come out (and, oh yes, don't forget to drink).
Action steps are mandatory in order to arrive at your desired destination, whether it is to hydrate yourself or to eliminate your debt. So let's alter the statement to read "Applied knowledge is power." This foreshadows Chapter Five, but it's important to set out here that there will be some work involved when it comes to reaching solvency. But a little hard work is a good thing!
For now, though, our first step is to know what you owe on each and every card. So go to your wallet, purse, pocketbook, file cabinets, wherever you keep your cards. Gather and count how many cards you have and write their names on a piece of paper, in no particular order. This is just an inventory to make sure that every card has been accounted for.
Once you have done that, then take out your latest statements for each of these cards. You may find these where you keep your cards or they may be elsewhere. Just take your time and look for them. Frequently when we get overwhelmed by debt or try to deny its existence, we scatter our statements or put them where we cannot readily get to them. This is the "out of sight, out of mind" mentality in which we hope that our debts simply go away. That won't happen. However, the good news is that once we make up our minds to cut into our debts, our efforts/actions become concentrated and we replace the aforementioned "Ostrich Method" with "Eagle's Wings." You are ready to soar! Positive results follow. We install a system that allows us to easily oversee our statements. This means keeping them all in one easy-to-reach location.
Excerpted from Master The Card by Joe Paretta Copyright © 2010 by Joseph R. Paretta. Excerpted by permission of BALBOA PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Chapter 1 MIND OVER MATTER....................1
Chapter 2 BLACK AND WHITE....................11
Chapter 3 STOP!....................21
Chapter 4 LET THE SAVINGS BEGIN!....................27
Chapter 5 CHIP, CHIP, CHIP AWAY....................37
Chapter 6 GIVE ....................47
Chapter 7 ... AND "TAKE"?....................55
Chapter 8 WHAT DO YOU WANT TO DO WITH YOUR LIFE?....................63
Chapter 9 NOW, THE END IS NEAR ....................75
Chapter 10 "A FINAL WORD"....................79
ABOUT THE AUTHOR....................93