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Debt free in 2011 – a serious commitment

If there is anything worthy of a commitment, it is building our wealth for the next generation.
 Carlee McCullough

During the holidays, many of us overspent for Christmas and made New Year’s resolutions that we’ll forget in a month.  But now is the time to get serious about “On Our Way to Wealthy in 2011.” If there is anything worthy of a commitment, it is building our wealth for the next generation.

Let’s do something different that will impact a lifetime.  Starting today as a team, let’s commit to debt-free living.  Periodically during the year we’ll check in to see how it’s going and to keep each other motivated. Below is our blueprint for success.


Calculate your total debt

In order to pay it down, we need to know exactly how much we owe. Make a spreadsheet including amount of debt and interest rates. We’ll update it monthly. At the end of 2011, our goal is to have zero balances on our spreadsheet.

Create and live by a budget

The basic formula for the budget should be this: the money coming in should be higher than the amount going out.

Do not incur any more debt

Have you ever had a paper cut?  Remember the pain? Well, adding more debt on top of debt is like adding a mound of salt to an open wound.

Live by cash only

From now on, if we don’t have the cash, we don’t buy it.

Cut spending immediately

We need money to pay down our debts.  So we’re looking to lower any spending we can. Start by contacting our homeowner’s and auto insurance companies in hopes of lowering our payments. Consider ways to lower utility bills.  Eat out less by brown-bagging lunches.  It may seem extreme, but it will pay off later when we are debt free.

Create savings and an emergency fund

As we pay off the debt, remember to place some in savings for those unexpected emergencies that come up. Remember the emergency fund is only for REAL emergencies such as car repairs or medical expenses.

Eliminate vices

Clearly, vices are expensive.  Starbucks, shopping, cocktails, and gambling are all examples of vices. Most of us have at least one vice.  As we move to a debt-free zone, consider giving up your vice three weeks out of a month if you cannot go cold turkey.  Calculate the savings and apply it to debt.

Pay off credit cards

While paying off credit cards don’t close out the accounts because it could affect your credit score.  Pay off the cards with the lowest balances or the highest interest rates. Then place the card out of your reach and sight. The feeling of accomplishment will make you feel good when you pay one off. Then on to the next one!

Consolidate balances

Call every credit card company and ask if they will lower your interest rate.  Transfer balances to the card with the lower interest rate and pay off the higher interest rate cards. Avoid balance transfer fees when possible.

Automatic payments

Many companies allow you to pay automatically. You can even set the amount greater than the minimum. This is great because it will guarantee the bill is paid on time and eliminate late fees, which can be as high as half of the minimum payment. Make sure you have enough money in the bank to cover the bills at that time of the month.

Raise your income

Increased income is crucial to our “getting out of debt” goal. More money coming in will mean more money going toward debts.

Lower major recurring expenses

Your largest bill is probably your house and/or car. Consider a roommate to lower expenses for a while. If you are renting, consider moving to a less expensive place. Also, if you move closer to work, your gasoline and car expenses won’t be so great. In addition, consider paying more on the car note to guarantee a faster payoff.

Build a “Get Out of Debt Team”

Are you on Facebook, Twitter, MySpace, and other social networking sites? Tell your friends that you are getting out of debt in 2011 and need their support and encouragement.  Friends and family will keep you focused when they see you get out of hand.

Remember we are serious about getting out of debt in 2011. Hopefully we can all be On Our Way to Wealthy together.

(Please send your questions to Carlee McCullough, Esq., Contract Compliance Officer, City of Memphis-Office of Contract Compliance, 125 N. Main St., Suite 546, Memphis, TN 38103 or e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. .)


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