Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Living on a cash-only diet

Credit card reform kicks in Feb. 22, but it won't matter to these 5 readers. They cut up their cards and are going debt free. They share how they did it.

1 of 5
BACKNEXT
William Hazelgrove
William Hazelgrove
William Hazelgrove, 49, is a novelist who lives with his children, Clay, Callie and Careen, and dog, Bach, in St. Charles, Ill.
Went cash-only: 4 months ago

My challenge: Tracking purchases

We were the quintessential American family: We were carrying $22,000 of debt. We would reach for our credit cards constantly, and eventually our interest rates went through the roof and our credit lines got restricted. We realized if ever wanted to live within our means, we'd have to switch to using cash only.

It's been a sobering reality check since we come from a long line of people who relied on credit. We're paying off our debt and realize it's going to take a while to adjust, but already we feel more empowered. We own everything we buy, and we don't feel like we're skating on the edge of a cliff.

We use debit cards, so we're constantly afraid of going over the balance because you can get slapped with service fees. Not all charges hit immediately so you're constantly wondering if you've accounted for everything.

My solution: I try to keep my debit card balance above $100 at all times, and I keep a cushion of $5,000 in an account for emergencies. I keep every receipt and enter the purchase into Quicken. I download the debit card transactions online and check them with the receipts.

I think through the downturn, more and more people are realizing they don't have a safety net. We're all pretty much a few steps away from the guy who just lost his house. We're our own line of defense.

We have a priority order for our expenses: mortgage first, utilities second, then food and medical bills. We've spaced out our due dates with the different bill collectors so we have some breathing room.


NEXT: Brooke MacDonald
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
Five most expensive cars sold at Pebble Beach These classic cars went for seven figure sums at the world's premier classic car event. More
Seats that move! Rain! Movie-watching goes beyond 3D How can movie theaters compete when many prefer to watch streaming video from their own comfy couches? Some hope a new interactive technology will lure audiences with immersive effects. More
15 cool cars for sale at Pebble Beach While these events are best known for seven-figure classics, just about everything crosses the block at Pebble Beach. More

Special Offer