Debt-Free Forever by Gail Vaz-Oxlade (the beginning after the end read novel .TXT) 📕

trip interruption or cancellation coverage. And then there are all the free flights you can accumulate just by signing up for the right card.

GAIL’S TIPS

Here’s a way to get more warranty without shelling out for an extended service contract. Since some credit cards offer to extend most manufacturers’ warranties for a full year, just by paying for your new purchase with one of these cards, you get an extra year of coverage. You have to be vigilant about keeping all the paperwork so you can collect. You’ll likely need the store receipt, the credit card statement showing the purchase, the manufacturer’s warranty and the repair quote. Check your credit card agreement to see if your credit card offers extended warranty coverage, or Google your card and look at the benefits.

6. Travelling with a credit card beats the bejesus out of pulling money out of foreign ATMs and racking up huge fees. I travel with a couple of hundred in cash and then use my credit card for absolutely everything I can.

7. Using a credit card and paying it off in full every month is one of the best ways to build a great credit rating.

Credit cards aren’t for everyone. According to the Stats Man, the country’s outstanding credit card balance has more than tripled, to almost $40 billion, in the last 10 years. So while credit cards can be a terrific tool for the people who have the discipline to use them to advantage, there are a lot of folks out there who have fallen into debt traps using credit cards.

GAIL’S TIPS

The best way to use a credit card without falling into a debt trap is to only spend money on the card that you know you can pay off when the bill comes in. That means keeping track of how much you’re spending every time you whip out the card. Keep a notebook with a running balance of what’s in your bank account. Each time you use your credit card, deduct the amount you have spent—as if you’d done a debit—from your notebook. Then, when the bill comes in, you’ll have all the transactions already debited from your balance, so the money’s there to pay off the bill.

DEBT-FREE FOREVER

For a long time Canadians have been racking up debt at a wicked clip. Spurred on by easy access to credit and a desire to at least appear successful, people have spent thousands of dollars they have yet to earn. If you’re reading this book, you are likely one of these people.

But there is a new movement afoot, a movement to get out of debt and stay out of debt. If you are determined to be part of the Debt-Free Forever success story, you need only make that goal a priority and then take action. Whenever you need a reminder of the path to follow, come back to this book and these eight steps for a refresher.

STEP 1: TAKE STOCK OF YOUR DEBT SITUATION

This may take an hour or 12, but having a written plan means you are way more likely to get to where you want to be. Use what you learned in Chapter 2 to figure out where you are.

STEP 2: STOP USING YOUR CREDIT

If you pay $100 off your line of credit and then go out and spend $75 on another credit card, you’re playing a game you will eventually lose. Put away all the credit. It’s time to start living on what you make.

STEP 3: PRIORITIZE YOUR DEBT AND CALCULATE YOUR PAYMENTS

In Chapter 5 you learned to list what you owe by interest rate with the most expensive (the highest rate) at the top of the list. And you learned to calculate the minimum payment on each debt—what you have to pay to keep current and not bruise your credit history. Then you figured out how much to repay to get out of the hole. Now it comes time to put your money where your mouth is.

You already know it’s going to cost you $300 a month in minimum payments to keep your credit history in tact. But if you want to get that credit card paid off in six months, you’re going to have to slap much more against that sucker to make it go away. It is at this point that you prove how serious you are about becoming debt-free.

STEP 4: DON’T FALL INTO THE TRAP OF IGNORING GOOD DEBT

Some people seem to think that because some debt is “good” debt, it’s okay to keep it hanging around forever. Which brings us to your student loan, if you have one. Decide you want to be done with that debt in five years or less and decide where you’re going to get the money: if you want to be debt-free, you have to find the money to pay off the debt. It may mean going over your budget with a paring knife. It may mean finding a way to make more money. You’ll do whatever it takes.

STEP 5: MAKE YOUR DEBT REPAYMENTS AUTOMATIC

Set up an auto pay for each debt you’re working to pay off, taking the guesswork out of it and making a firm commitment to the process. Initially you’ll pay the minimum required on all the debt. On your most expensive debt, you’ll auto pay the amount you came up with to have the debt gone by the date you established when you set your goal.

STEP 6: CHART YOUR PROGRESS

Create a chart that shows how much you owe and your progress to Debt-Free Forever. You can use boxes. You can use a thermometer graphic. Whatever works for you. Each time your auto pay goes through, colour in one of your boxes or move your marker up the thermometer so you can see the progress you’re making. This visual representation of your success will pay huge dividends in terms of keeping you motivated.

STEP 7: VOW TO BE DEBT-FREE FOREVER

Once you’re out of debt,