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
My part-time job is a dead end, but it's all I can find CNNMoney profiles 4 of America's 7 million part-time workers unable to find full-time jobs. More
Cool cars from the LA Auto Show There are some of the standout vehicles on display this year at the Los Angeles Auto Show. More
American Dream homes: Prices in 10 cities How much does the American Dream home cost? From $2 million in Los Altos, Calif., to $65,000 in Cleveland, here's what you'll pay for a 4-bedroom, 2-bath house, according to Coldwell Banker's annual survey. More

Special Offer

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.