2 of 5
BACKNEXT
Brooke MacDonald
Brooke MacDonald
Brooke MacDonald, 28, is an account executive at a public relations firm in Annapolis, Md.
Went cash-only: 1.5 years ago

My challenge: Managing unexpected expenses

After I got my first job out of college, I bought a house and a car and the expenses added up quickly. I was in an embarrassing amount of debt and would dread going to the mailbox. The bills would arrive and I would feel sick. But I still wanted to go out with my friends and buy fancy things for my house.

I eventually had an "Ah ha!" moment and decided I couldn't continue living that way. I wasn't in such a bad position that I was getting calls from my creditors, but I enrolled into a debt-management program. They helped me lower my interest rates and space out the due dates.

I went cold turkey one day and instead of using credit cards, I started to charge all my purchases on a debit card. I've cut my debt by about 20% in the last year and a half, and I expect to be completely debt free in another two years.

I really budget everything out, because I know planning ahead is my path to financial freedom. But sometime it can get sticky. It's cruddy when you have a big car service bill or want to travel.

My solution: I pay all my regular monthly bills and put some money into saving, and then see what I have leftover to do what I want with, which is usually about $600 each month.

I've known that I want to go to Los Angeles for the holidays for seven months, so I started saving for a hotel, a rental car and everything else back then.

For more spontaneous buys, I have a different system. If I decide I want to buy something, like a new outfit that costs $75, I set money aside for it for at least a week. If I decide it's still important to me after that period of time, I buy it.

NEXT: John Wilder

Last updated December 08 2009: 7:38 AM ET
Email | Print | Share  |  RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
More Galleries
Tech's highest paid women Silicon Valley isn't known for its diversity, but it is home to a handful of highly paid female executives. More
9 reasons to be hopeful about women in tech These startups are working to leverage technology to level the playing field for minorities and women in tech. More
10 best states to retire in Forget Florida. Residents of these states are happy, safe, and have good health care -- all for the right price. More

Special Offer