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.

William Hazelgrove, 49, is a novelist who lives with his children, Clay, Callie and Careen, and dog, Bach, in St. Charles, Ill.

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.