The Elusive Frugal Student

I don't know about you, but I am getting a little tired of picking up the National Post or reading in the Economist that students are in more debt now than they've ever been in the last thirty some odd years combined, it's depressing! I'm also a student. Actually, I haven't been a student for nearly ten years, but I'm returning after a long hiatus, and even I started having heart palpitations when I had to think about doling out wads of cash for tuition and books. But after the initial panic, and a quick look-over my finances, I realized that  even though I'm miles away from wealth, I'm rich with financial savvy, and the more planning I managed ahead of time, the less likely I was to become one of those statistics they write about in financial publications.

So here's how to survive those college years. They may be lean, but you'll be the richer for it in the end!

1) Scholarships & Grants

The second you find out that you've been accepted into the university or college you want, start scouring the internet, and your university's financial aid office for scholarships, grants and bursaries. There are literally thousands of scholarships for college students, and this is the kind of money that will keep you out of the poorhouse. This type of financial aid is free, and provided you meet a set of requirements, and provide whatever it is they're asking for, whether it be an essay or project,

2) Student Loans

This is where things get tricky, and where most students go wrong. They apply for a loan, the government hands them a boatload of cash intended for their studies, and students spend it on luxury items like designer clothes, new cars, or vacations, none of which are legitimate school costs. Often, the money is spent long before the first semester comes to an end. Student loans are for costs that are incurred because you are a student.

3) Altering Spending Habits

Like I mentioned above, being student means being lean, and I don't mean physically (although, that's what tends to happen to me when I'm stressed and studying!). Your budget should be lean. You've made the decision to go back to school, and that means that your financial priorities should be different altogether. Those weekly shopping trips to the mall should slow to a trickle, and those seemingly endless nights out at the bars with friends, you can't afford to do that anymore! It's time to trim the fat, and get real about your expenses. You've decided to further your education in an effort to  provide better earning capabilities for yourself, why would you want to sabotage your own efforts?        

Tucking Away for Tuition

I'm sure I've written a post on saving for college before, but there have been some new developments my life that have inspired me to write yet another post. I was recently accepted to an Ivy League university after spending the last year and a half at a smaller college. I received my acceptance letter yesterday and I can hardly contain myself. But after the excitement subsided, I quickly realized that I have a mere four months to come up with a significant sum of money, yikes! With two planned holidays coming up, and a barrage of other expenses about to come my way, how on earth was I going to swing this? Well, luckily for me, this isn't the first time I've landed myself in this predicament, so it's time get creative.

Carefully Construct a Weekly Budget

I'm really careful with my money, but there are certain funds that get lost in on-a-whim purchases like coffee, clothing, a night out at the movies and things of that nature. Because I don't have time to start up an RESP or Education fund, I have to start making drastic changes in my weekly budget. If you're in a similar boat, set aside an afternoon, grab yourself a calculator, a pencil, copies of all your bills and paystubs and scratch out your entire financial existence down on paper. Include everything from your car expenses, rent, utilities, groceries, toiletries, prescriptions and any other expense you anticipate incurring. Factor in debt-repayment if necessary, and an amount that you are able to set aside for your future.

No Vacation - Opt for a Stay-cation instead! 

Unfortunately, I have two specific trips that are planned for the summer, both weddings that I will be attending, and I won't be able to get a refund. But this news will obviously restrict my budget while I'm in destination. If I didn't stand to lose out on a significant amount of money, I would be staying home and enjoying the city in the summer months. Look, everyone needs a break from life, but taking an expensive holiday is not in your budget if you're going back to school, so opt for a unique experience at home. Go camping, take a small roadtrip, explore your hometown!

Grounding My Wheels

Maintaining a vehicle is expensive and with gas prices through the roof, it makes little sense for me to be throwing my money away on fuel when I have a perfectly good bicycle and a city full of bike lanes! It's better for me, and I'll be giving mother nature a break!

On the Hunt for Money

Finally, while I'm busy squirreling my own funds away, I need to go knock on a few doors to see if I can scrounge up some extra money. I'm talking about applying for scholarships and bursaries. I've always had the attitude of take no prisoners! I will apply to absolutely  every single scholarship I can get my hot little hands on, and then some! Here hopes I make it to September without ending up in the poorhouse!

Why Renting Just Makes Cents!

Just over a decade ago, a year out of high school, I was a young, ambitious woman who made one of the biggest decisions someone can make in their adult life; I wanted to buy a house. I decided to postpone my plans to attend the University of Phoenix and take full advantage of a serious dip in the housing market. My downpayment was a pittance compared to what I would've had to shell out in this hot housing market. If you're reading this, and you live in the United States, you're probably wondering what the heck I'm talking about! Hot housing market..where?! I live in Canada, on the West Coast, in a city where the average house costs about $899,000USD. And if you're trying to work out downpayment calculation in your head, that's a hell of a lot, and not exactly attainable if you're a struggling student trying to make sense of a newly attained degree whilst trying to pay off crippling student loan debt.

I've since gone back to school, and for the last two years, and after selling my house years ago when the market was at its peak, I am now a happy renter. I have to say, if you asked me ten years ago, I never thought I'd utter those words, but the lifestyle that renting has afforded me, has far outweighed the responsibility of being chained to a mortgage. If you are on the cusp of making a decision about whether to buy a home or rent, here are some things you might want to consider:

Coming up with a downpayment. Depending on what type of property you're after, you have to come up with a considerable amount of money to secure your home. In some cases, it can be as much as 25% or as low as 5%, but either way, it's not the kind of money that most people have lying around. If you're a university student starting out in life, it's more important to focus on paying off your debts than to save for a downpayment.

Lengthy mortgage terms keep you locked in. Signing a mortgage document is a lot like getting married. You have made an agreement with the bank stating that you will be responsible for coming up with a substantial payment on a monthly basis for a set number of years until it's paid off. You don't have the luxury of giving notice, throwing your possessions in storage, and taking off for a year away (much like I did). You could always find tenants to occupy your property, but I promise you, it's not an easy process.

There's no landlord to call when something goes awry. If an appliance breaks, or the toilet floods, the only one who has the power to magically fix these problems is that stressed out individual you happen to be staring at in the mirror every morning. As a homeowner, you get to experience the joys of calling the $80 an hour plumber in the middle of the night when your basement is flooding. If you're a tenant, someone else is not only responsible, provided you didn't cause the issue, will provide the necessary professional and foot the bill!

Tips on Buying Your First Home

When I graduated from high school just over a decade ago, I only had one thing on my mind, buy a home. This would have been considered a fairly unusual goal for an 18 year old to work towards, but being a fairly mature young adult, I had already done a significant amount of research into renting versus purchasing. And though I lived in one of the most desirable cities, the condo market had cooled off significantly. It was a buyer's market, and I was on the hunt for some new digs. But way before I made the phone call to a real estate agent, I followed several steps that led me to successful home ownership.

1) Can I Afford This? An alarming number of people are so enamored with the idea of owning a home, they run off to the bank to get pre-approved for a mortgage well before they've had a good look at their budget to see if they can actually afford to take on a mortgage! Your paralegal salary may be enough to keep you in Jimmy Choos, but buying a home is so much more than mortgage payments! If you are contemplating home ownership, you owe it to yourself to work through your budget with a fine tooth comb, leaving absolutely no possible financial roadblock unexplored. After you've paid the rest of your expenses, tucked away some money for retirement, and some for savings, what's left? What's left is what you'll have to work with when you pay for your new home every month. If you don't have this number in the forefront of your mind, you leave yourself open for a rude awakening when the first mortgage payment hits.

2)  Getting Pre-approved. I've always thought of getting pre-approved similar to getting engaged! You go through all the planning of buying a home, but at the end of the day, you still need to close the deal! When you get pre-approved, the bank or lender is essentially letting you know how much you can spend on your new home. In Canada, a mortgage broker will generally calculate your down payment into this pre-approved figure.

3) Thoroughly explore mortgage options. There are any number of allotments of time given to pay off a mortgage. Here in Canada, home buyers generally opt for a 20 or 25 year mortgage. I believe in the USA, a standard mortgage is generally around 30 years. A financial adviser will not only help you determine the best amortization rate, but will explain the benefits and drawbacks of a fixed or variable (adjustable) mortgage. Knowing what you can spend helps narrow down your search, and immediately lets you know what neighbourhoods you can afford!

4) Shop for a real estate agent. Once you get pre-approved, and you're ready to hit the ground running, it's time to find an agent. This can be as tricky as finding a good lawyer! You want to find someone that you feel you can trust. The first thing I did when I started shopping for a new home, was ask friends and family, and found someone fabulous! Going with a larger agency like Remax or Century21 is beneficial because you gain access to individuals with vast property knowledge, and in many cases, specializations. For example, if you are looking at purchasing a property in a particular area, you'll want an agent who's going to know the in's and out's of that neighbourhood.

5) Understanding the offer process. There is nothing more exciting than finding the house of your dreams, but there's nothing more heartbreaking than watching it slip through your fingers as someone outbids you. There is some strategy to putting down an offer, if your real estate agent is good, they'll up your odds. Keep your cool, and for the sake of your health, always be prepared to walk away from the deal. There are hundreds of thousands of houses, and there's no reason to self-destruct financially. Be patient, and you'll get what you want.

The Benefits of Filing Your Taxes Early

Yes, it's only March, but the personal income tax deadline is approaching rather quickly. And it would seem that, despite the fact that most T4 forms or in the States, the W-2 form, are mailed out near the end of January or early February, most tax payers wait to the eleventh hour to file their taxes. Why is that? Believe it or not, there are some serious benefits to filing your taxes early.

1) The month's of January, February and March are much quieter, so whether you're dealing with the IRS or Revenue Canada, you won't run into excessive line-ups at the post-office. It was estimated that in 2010, up to 70% of tax payers were filing their taxes electronically, but that still leaves a whopping 30% who file their taxes through the mail. If you are standing in obscene post-office line-ups in the month of April, you run the risk of your taxes not being filed on time which can lead to penalties.

2) Filing early means you're not worrying about it for the first three months of the year! Listening to my friends complain of sleepless nights and stomach ulcers always made me scratch my head. Whether you owe money or not, why drag it out, and cause yourself more stress?

3) Reduce your risk of filing an inaccurate return! There are few things in life more stressful than a tax audit, and one of the top reasons that individuals or businesses are audited, is because someone has made an error during the filing process. If you are filing your tax return at the last minute, you are far more likely to make an error under the duress of a deadline, than if you were to file with a month or two of breathing room!

4) The faster you apply, if you are owed money, the faster you get your money! If you file early enough, you eliminate the temptation to get an "instant refund" from a third party that will take a huge junk out of your return. File early, beat the rush, and get every penny of your hard earned money to put back in your pocket!

Time to Organize for Tax Season!

It may only be the end of February, but I know that many of you are starting to feel the kind of anxiety that has the potential to drive you to distraction during the waking hours, and refuses to let you get a wink of sleep at night. It's tax time, and you have a mountain of paperwork sitting in the corner mocking you as you pace nervously in front of it. Unless you have an accounting degree, you're going to need to organize this chaos to hand off to someone who's qualified. And the more disorganized you are, the more money they're probably going to charge you, which means less money in your pocket on your return! Stop the procrastinating, turn off the television, turn on some music, and let's get down to business.

1) Schedule some time. Look, this isn't a 5 minute task, you're going to need to invest some serious man-hours into this project. If you have time to meet your friends for drinks, you have time to organize your taxes, so stop procrastinating!

2) Get yourself a filing cabinet, an accordion folder or just a box with dividers. Put someplace that's accessible all year round, so you can add paperwork to it over the course of the tax year.

3) Organize your expenses. Get yourself some accounting software like Quicken or Quickbooks and organize your utility bills, expense receipts, medical bills etc. Not only will you make things easier for your accountant when they starting filling in the boxes, but you'll begin to get a clear picture of your financial year in review! Maybe it's time to make some changes.

4) Are you drowning in receipts (I know I am!) consider investing in a nifty receipt scanner like Neat Receipt  that copies and electronically files receipts. Something to consider, if you have homeowners insurance, you are generally required to produce receipts (or copies) for the items that you need replaced. Neat Receipt is a great option for you!

5) When everything's all neat, organized, and you're ready to present it to your tax accountant, write down a list of questions that you may for them and paperclip it to your tax 2011 folder. Remember, put an efficient filing system in place now, and every tax year ever after will be a piece of cake!

How to Save at The Grocery Store

I live on the West Coast of Canada and I can guarantee you that I pay some of the highest food costs in the country. With the exception of northern populations, where the food is flown in daily and weekly, I know what its like to have sticker shock at the cash register. You have 10 things in your basket, and all of a sudden, your bill is $100! Yikes! In these difficult economic times, families can use all the help they can get to ensure their loved ones get the nutrition they need to take on the world every day. Here are a few tips that I've picked up along the way that have helped me save on my food budget and helped me get the most out of my purchases.

1) Never shop when you're hungry! This is an old, but very wise tip that my mother taught me before I left home. If you're hungry, you're more likely to throw things in the basket you don't need.

2) Make a list. Don't wing it, give yourself a parameter and stay in it. Stay on budget.

3) Don't buy everything at one store. This was a tough one for me to understand. Doing all my shopping in one grocery store seemed so convenient. I learned very quickly that saving money, and getting a good quality product trumps convenience any day of the week! So for my meat, I always go to a butcher and I purchase my produce from stores that sell produce only. Not only are their prices much lower than the grocery store, but they have a far more varied selection.

4) Stick the outside of the grocery store. I can guarantee you that what you spend on fresh produce, meat and dairy will be dwarfed by all the crap that you're buying from the middle of the store. There will of course be items up the middle of the store that you might need like cereal, soups and pastas, but limit these.

5) Buy whole cuts, rather than pieces. When you buy meat in pieces, grocery stores will mark it up substantially. Learn how to cut up a chicken,  or how to cut up pork chops from pork loins. Not only will you turn singular meals into five or six, but you'll save yourself a boatload of cash.

How to Stage Your Home on a Budget

I bought my first apartment at the tender age of twenty. It was a rare time in the market when rent was more expensive than a mortgage, and the market was teeming with apartments ripe for the taking. I lived in it for three blissful years, and luck struck again! My partner and I were beginning to outgrow our space and the market was simultaneously taking off. It was a buyers market and we would have been crazy not to jump at the opportunity, so we did! We acquired a real estate agent, and had our first meeting. We had taken exceptionally good care of our apartment over the years, and our agent relayed to us that our place didn't require any major work, however, we might want to consider staging it, to ensure our chances of getting quality offers. I had no idea what staging was, but I was about to learn.

Staging is adding or removing pieces to a space to make it looked lived in. When a buyer walks into a space, it's essential that the furniture and home decor they see, helps them visualize themselves living in the space. Apparently, our apartment was in desperate need of some staging, but we were budget constrained, so we had to get creative. Now, you don't need to become an interior designer, but it does help if you have an eye for design. So it's time to marry your creative skills with your ability to make a dollar out of 15 cents.

1) De-clutter and de-personalize. Sometimes, the best things in life are free! Though you may think your family photos are endearing, buyers will walk in and judge, immediately. You want to maximize your bottom line, so getting rid of anything that might put a name to a face is important. You want them to feel like it's their home, not that they're walking through a stranger's home.

2) Colour evokes emotion. This is in expensive, but ingenious way to change the natural flow of the space. With $60 worth of paint, you can take a room from ultra personal, to sell-ready chic.

3) Home Decor. Those gorgeous rooms in House & Home Magazine are brimming with furnishings that probably cost more than your entire house! It's not necessary to blow your budget on fancy vases, luxurious window coverings and silk pillow covers. I can guarantee that no one stepping into your home is not going to buy your home because the pillow covers are the cotton ones that you picked up at the Target sale! If your couches and love seats look like they need a little refreshing, pick up some inexpensive accent pillows from Ikea.

And lastly, don't worry about making it perfect, that is what your real estate agent makes the big bucks for!

How to Save for a Wedding

Your wedding is one of the most important days of your life, and the most stressful! There are a million things that have the potential to go wrong, and even if you're in the hands of the most capable wedding planner in the biz, brides still manage to give themselves a coronary over the smallest details. But before you get to that perfect, stress-filled day, you need the green, the mula, the dollar bills, you need a whole lotta cash to make your Cinderella story come to life. Here are a couple of pointers to help you budget for your big day!

1) Venue - Book ahead! It sounds simple and obvious, but I can't tell you how many women I know who've ruminated over a venue for so long, they've missed a deadline and have to run around looking for an alternate space. Booking ahead also allows brides to negotiate better rates. DON'T BOOK A SATURDAY! This one of the cardinal rules. Saturdays are almost always the most expensive day, and a venue will charge you a premium price. Also consider booking a public place like a park, university, or an art gallery. Think out of the box, be creative, and revel in how much you'll save! 

2) Flowers - If you must have flowers, consider locally grown, native floral arrangements. The best option of course, is to eliminate them  from your wedding entirely and consider going green! There are hundreds of wedding coordinators that provide environmentally friendly weddings.  

3) Food & Booze - Personally, I think the food is one of the most important aspects of wedding. Food brings people together and if it's good, everyone is in a better mood! There's no need to cheap out on food, you just have to be conscious of where your money is going. If you are serving appetizers, consider the cost difference between having servers versus having the appetizers stationary at a station. As for the main course, consider a meal with ingredients that are local and in-season. If you have an open bar, consider serving only wine, beer and soda, and charge cash for spirits. 

Keeping Teens On Budget

Most of us haven't made the best financial decisions at one point or another in our lives. We've all been guilty of racking up our credit cards a handful of times, or we've purchased something that we really didn't need, or we took that extravagant vacation when we really should have been saving our pennies. And as adults, we have to take ownership of our financial responsibilities (or irresponsibility!), but when we begin having children, we don't have the luxury of throwing caution to the wind. As our children mature, being the little sponges that they are, they become very aware of the correlation between money and responsibility. We don't want our teens making the same mistakes that we did, and we certainly don't want them ever feeling the crippling pressure that debt can create. You don't need to have an accounting degree to teach your children financial responsibility, but if you're struggling with how to set out a plan, here are a few pointers.

1) Sit down with your teen and have an open discussion about what they think their expenses are. They might have a cellphone, or a car, or maybe a membership to a gym. Find out what their financial goals are and educate them about the benefits of putting money away for what they want, rather than spending money on impulse purchases.

2) Don't give your teen a credit card. Just don't. They need to learn that if the money isn't in the bank, it's irresponsible to rely on someone else (the credit card company) to pay for something. If you do decide to give your teen a credit card, make sure it's in your name, and the limit is extremely low, like $300, that way if they "rack it up", it's not financially impossible to pay it off.

3) Teach them to be a  wise consumer. Teenagers love to shop. Especially the girls. They are inundated with ads in magazines, billboards, TV that all tell them to shop, shop, shop! So forget about trying to get that out of their system! The best way to combat their shopping urges, is to teach them how to be the best consumer they can be. Teach them to research products before they buy them!

Do I Really Need Student Loan?

No matter what country you look at, all over the world, college students are crippled by student loan debts so high, it will take the first half of the students working career to pay them off. How is that fair? Who wants to invest time and money into an education, with the intention of gaining a better paying career, only to be saddled with debt? It is estimated that 18 million students attend over 5000 different institutions in the USA today, and have racked up nearly $900 billion in debt! I could not even began to fathom what that number even looks like! Combine that with the volatile employment environment, is it even worth going to school? Of course it is! But students need to start taking better control of their finances and lives! Before you sell your soul to the student loan devil, let's take a gander at the big picture! 

1) Do you have a budget? You've heard this a thousand times, but without a realistic, constructive and workable budget, you are going to be drowning your sorrows in bad tequila in your post-graduate years. You can forget all those big dreams you had for after graduation, if you're in the red, they won't happen. You need to work out a yearly, monthly and weekly budget for the next four years. Unless you're made of money, you don't have the privilege of being extravagant.

2) Can you work? The answer is probably yes! Young students don't have the distractions of child rearing, supporting spouses or mortgage payments, thus, they have more time on their hands to balance their studies, hobbies and a part-time job. Putting in a few hours a week, will give you a break from your studies, allow you to build up a resume, and alleviate the amount of debt you'll face at the end of your studies. 

3) Are you prepared to attend an institution with lower costs? Just because you live 15 minutes away from Harvard doesn't mean that one, you'll be admitted or two, that you'll be able to afford it! It's important to be realistic about the cost of education. Prospective students get caught up in dreams of being at an ivy league institution, rather then researching the more than 3000 institutions across America, that offer equatable program options. It might actually make more sense to move away to go to an affordable institution, rather than going to an expensive one that is closer to home! 

These are all things that you need to consider and research before you approach the government or an institution for money. It is important to take responsibility for both your educational and financial future, don't place it in someone else's hands!  

Hot Wheels - How to Buy a Car the Smart Way

Though there are several scholarships for college students, that still won't necessarily cover all of your tuition, books, living expenses, food, entertainment, the list goes on! So the idea of needing to save up money for a car may be overwhelming. If you are fortunate enough to go to college in New York, Chicago or Boston, though it may not seem as convenient, you have access to a pretty efficient public transportation system. If not, then having your own reliable set of wheels to get to and from school and work, in a safe manner, becomes a necessity. 

Now, unless you have parents with a great deal of expendable income just lying around, you have savings, or you're a trust-fund baby, you can't just march down to the Mercedes dealership and take your pick! Buying a car requires a great deal of time, research and if you're smart about it, you'll invite as many friends and family members who have experience with the buying process, to be involved to ensure you make the right decision.

Cars are an investment that never give back. They are a complete money pit, and lose value so fast, it'll make your head spin! Unless you're purchasing a 1927 Model T Ford, you'll be lucky if you get half of what you paid for it when the time comes to throw it on Craigslist. So it's important to examine what kind of car you'll need, to make sure you're not wasting your money.

1) What is the climate you live in, how is the car being used for and how far will you be traveling with it? This will help you determine what type of car and what brand is going to meet your needs. If you live in a Seattle where it rains 9 months of the year, buying a convertible is ridiculous! And if you live somewhere where you'll be sitting in traffic, buying a gas-guzzling Cadillac Escalade is just going to eat up all your cash. If your commute is relatively quick, it's perfectly acceptable to purchase an older vehicle, as they tend to have better short distance mileage. If it's far, consider a barely-used or new vehicle.

2) Approach family members who might be trying to get rid of a vehicle. Not only are they more likely to give you a better deal on a vehicle, but they'll be more up front about the history of the car. They'll let you know if the vehicle's been in any accidents, or what work has recently been done, and what work is likely needed in the future.

3) Check out websites like consumer report websites to research which vehicles perform better. They'll educated the buyer on reliability, fuel mileage, car safety overall consumer satisfaction. It's important to weigh the pros and cons of purchasing a particular brand of car. Students shouldn't have to worry about driving a lemon. Their time should be preoccupied with getting good grades, being successful and having fun!

Going Broke Isn't Cute

It's only a few weeks after Christmas and you are probably starting to feel the effects of your pre-holiday spending frenzy. I've got some news for you, the hangover only gets worse from here on out if you don't nip this in the bud today! The average Canadian shopper racked up their cards to the tune of  $1200 for Christmas gifts alone. This figure is exclusive of all the holiday parties, swollen grocery shops and goodies for neighbours, friends and colleagues! What happened to the recession?

 Well it appears that Canadians have more credit to spend now than they have had in the last thirty years, and it's frightening. America is fairing worse in this delicate economic climate with the USA credit load in the high billions. So with this in mind, why does it feel like everyone can spend like their millionaires? Well, for one, retail stores were egging consumers on with deals like "buy-one get-one free" and sales that went up to as much as 90% off! (Sort of makes you question whether the assumed value of some of these consumer goods is a just representation of what it costs to produce them!).  Retailers rely on impulse buys and a lack of rationalization on the behalf of the consumer.

So after you've raided the Gap's shelves dry and you've snagged as many pairs of Nine West your closet can hold, you tell yourself it's all justified, because it was on sale. Right? WRONG! Ask yourself why you think it's okay not to pay your lighting bill, or your cell phone bill, services you take advantage of regularly, but you've decided they are no longer priorities, but a new Kate Spade handbag is? Give your head a shake. If you can't afford to pay your utilities, feed yourself, and clothe yourself, modestly, you have no business blowing money that isn't yours on items of luxury.
If you don't want to be paying off your holiday thrills from 2011 in 2013, it's time for a gear change.

1) Stick the credit cards in a yogurt bucket, pour some ice in and place it in the freezer. You are done with those babies until you are free and clear of your credit card debt.

2) Make a weekly or monthly budget ands start tracking your expenditures. It's time to separate your needs from your wants. And no, getting your hair done twice a month, is not a need. Get real! Since you have no plastic to save your behind, you will have to learn to discipline yourself not to blow copious amounts of cash. There are number of fabulous budgeting tools online that can help you determine what your household expenses are. We often forget about little things that sneak up on us like pricey prescriptions, or an unforeseen car repair.

3) Set goals, and be realistic! Look, if you're making  $10 and hour, and you're in $15,000 in debt, you're not going to be able to pay off your debt and buy a masarati all in one year (unless you win at Bingo!) Don't set the bar so high that you'll want to give up half way through. Give yourself a reasonable target and a modest reward at the end so you feel like you've accomplished something. There's nothing more liberating than feeling debt free, with no fear of looking over your shoulder to repay someone you owe money to. And save the plastic for emergencies, not some off-the-cuff shopping spree that will have you financially crippled for the rest of the year!