Hello Mo’ Money readers! This is my first guest post, and I’m so excited to introduce to you my friend Jon, a great writer, photographer and Robot in Disguise blogger, who said yes to sharing his debt story and how he’s on his way to becoming debt-free. Take it away Jon!

Like most of us, when I was in my early twenties I got a credit card. It felt like a gift from the money gods. I was so excited to finally be able to get things I couldn’t actually afford. I felt like I just got free money and pushed the possible consequences aside. I would use the card, pay the minimum each month and they still kept raising my limits. “Hooray”, I thought “I’m so rich I can get whatever I want”. I didn’t really think about the 18% interest rate or that my minimum payments just covered that percentage. Basically, I was a credit card companies dream.

After ten years of good times spending “someone else’s money” I sat down one day and really looked at my finances. I wrote everything down and worked out how long it would take me to pay what I owed off by still doing what I was doing. It hit me like a bad hangover. I owed a lot of money. And I owed way too much money for someone who didn’t make very much to begin with. Two options came to mind: I could keep doing what I was doing and never pay it off and live in a quicksand pit of debt, or grow up, cut the cord, and start paying this debt off.

So, I pulled up my pants and I cancelled my credit card, which I believe is the most important step to paying off consumer debt. It was a humbling and sobering experience to realize how much money I spent on stuff that I didn’t really need. Paying this off meant I couldn’t rely on my credit card to bail me out anymore. I had to use the wage I was making to get by and nothing else. This seemed like a complicated and daunting task, and to be completely honest kind of depressing. So where to start? I took a good look at the things in my life I needed to change and came up with five things to focus. Here we go:

1. Consolidate Your Debt

I went to the bank to talk to a financial advisor and got a consolidation loan. This gave me a lower interest rate and a manageable monthly payment. Once I did that I lowered my interest rate by 8% which is going to save me hundreds in the long run. I would also suggest putting $25-50 automatic withdrawal into a RRSP or a Tax Free Saving Account. It’s important to pay yourself first while paying everyone else off too.

2. Lower Your Bills

I looked at all of my monthly bills. Cable bill, cell phone bill, and any other monthly expenditure I had. These are easy to change. I went to my cell phone provider and knocked my bill down by $20 a month by lowering my data and getting rid of a couple features that I felt I could live without. I called my cable provider and looked at channels that I didn’t really watch and chopped them down, saving me another $15 a month. Right there I started saving $35 a month. Fitness memberships are a big one too. A lot of us have them and don’t really use them, so see if you’re in that category and maybe look into cancelling it. If you can’t get out of your contract, then maybe it’s time to actually use it (easier said than done, I know). If you can cancel it, you can still work out by watching some Youtube videos on home exercises and following their at home work out tips.  I mean, unless you are trying to get huge, you’ll realize that you don’t really need to go to a gym. Doing this can save you $30-$50 a month.

3. Brown Bag It and Cook at Home

This is the biggest one for me. Eating at restaurants and getting take out is something I love to do. I know how to cook but I get lazy. Once I started looking at what I was spending at restaurants I was kind of shocked. Buying my lunch was $7-$15 per day, and doing that 5 times a week would add up to $50+ which is ridiculous. If you factor in dinners then we’re looking at double that. I can cut lunch costs by over half just by brown bagging it.  This seems like a no brainer but, harder to do than it would seem. It can easily get boring so try to get creative. There are tons of websites to give you different ideas, so do a little research. I would also buy my morning coffee at Tim Horton’s everyday and worked it out that one large coffee a day works out to $60 a month. So I’ve started drinking my coffee at work where it’s free. I do treat myself to buying lunches and dinners once a week. I can still enjoy the restaurant experience and it makes it more fun to not go as much as I did. Just don’t pick the most expensive places to eat when you do have a cheat day. If you’re a drinker, just find the places with good drink specials and limit yourself to one or two, or drink at home first.

4. Sell Stuff You Don’t Need

I took a good look at the stuff I’d bought over the years and asked myself “Do I really need all this stuff?” I went through everything that I wasn’t using and selected things that I could sell and went on an Ebay and Craigslist binge. I posted a bunch of stuff for sale and made some cash as well as de-cluttered my place. I put the money I made directly towards my debt so that the money was out of sight and out of mind. I’ll be honest, it’s a bit of a pain to sell things online, but making some extra cash made it worth it.

5. Walk, Bus or Bike

If you have a car then I don’t have to tell you that they are pure money pits. The amount of money that cars use up is pretty ridiculous. I’m not suggesting selling your car, but if you feel that you can get by without it you’ll save so much money instantly. If you decide that you can’t live without it, try to use it only when you have to. Walk to the store, take the bus more, bike when it’s nice out. It might also be worth looking into car share programs if you only need a car for a few hours. Zip Car is $65 a year for the first year and $90 a year after that. That works out to 0.17 cents a day or 0.24 cents a year. Mind you, you still have to pay for the hourly rates and gas, but it’s still cheaper than owning your own vehicle.

As it turns out, getting your finances in order isn’t that complicated of a process, but rather a long-lasting one. But at the end of the day, I feel better about myself, I have a better sense of direction in my life and finally some realistic financial goals. Of course, all of my suggestions can be temporary. Once that debt is gone, the money you used to pay down debt with will be all yours, so you can eat out a bit more, buy a new car, or get a few more TV channels if you want. Right now I’m paying back $400 a month on my bank loan, but soon that money will be all mine, and for right now that’s enough motivation for me to keep on track until I am completely debt-free.

 -Jon Cranny

You can follow Jon’s tumblr blog at robotindisguise.tumblr.com, follow him on twitter at @JonCranny. Thanks again for sharing Jon! - Mo’ Houses

(Image: mhGx4Vm/rgbstock)