5 Things I have Learned from NOT Relying on Credit

Many of you probably read my goals for getting out of debt in the next 5 years, but if you didn’t I suggest that you read it first right here. I plan to not have any debt, pay for my first house in cash, and be ready to for any emergency in the next 5-10 years, but most of it is happening in the next 1-2.

While paying off all of my debt, I have learned a lot of things including budgeting, savings, a little investing, as well as how to not rely on credit.

I was a little different growing up though. When I got a paper route, my money went into savings and I got to keep part of it. When I started working at McDonald’s almost 1/2 of every paycheck when to savings and I could use the rest for whatever I wanted. Through college, I used more savings than I put in there some months, but I was never worried because I had enough put away that I didn’t really need to work, plus I had my drill paychecks and GI Bill that helped out tremendously in the first year of college.

Throughout all of my jobs, my parents never encouraged me to get a credit card. I know GASSPP! I have no credit what-so-ever. This tends to be such a terrible thing for people today, but I guess my outlook is that you don’t really need credit if you don’t need a loan. Since I plan to buy my first house in cash, I don’t suspect that credit will really be a problem for me.

Here are the 5 main things that I have learned from not relying on credit:

1. Saying No

If you know my mom and I, you know that this is not really one of our strengths. I have gotten better at saying, I really don’t need that today, but maybe I will put some of my cash aside for that next time I have some extra money. I always have a small wishlist of things I want to buy when I have some extra money. It isn’t that I don’t have money sitting in savings, but it is based on how I have my savings set up. (More to follow in my next post on How I Plan for Savings).

Money is not the point. Discipline and knowing that I really don’t need it right now, is my point.

2. Working on my Budget

I love crunching numbers and seeing what could be. I love setting goals. I have put a little time each week to thinking about where money is going and focus on putting it in the right places.

My budget isn’t perfect, but it works for me. I plan on doing a post about my budgeting techniques coming up very soon, but the way my budget works is I put aside money every month for anything that I EVER spend money on.

3. Planning Ahead

Some months are harder than others and it seems by the end of the month I am ready for the next month to start so I give myself permission to spend money and do stuff again, but it never fails that I spend it too quickly and I am running out of money.

There was one month that because of the way the pay periods and my annual training fell, I knew I wouldn’t be getting the second paycheck of the month (which usually goes towards rent) but I had figured that out ahead of time and put money aside from the first check and my AT check so that when it came time to get that check I had the money set aside and it didn’t phase me too much.

I also put aside money in savings every month for holidays because I don’t get a “Christmas” bonus, so I budget for it all year around instead of trying to go without things for the month of December.

4. Doing Free Things

I have to say, this is the one I am the worst about. Usually I just avoid doing things in general, but I am getting better about this one. I have gone to the lake, gone to some of the free festivals that Lincoln has to offer, and walked around the mall with friends without any money (this one only works if you have control enough not to buy anything.)

It is one of my goals to get better at this in the next few years. I want to be better at picnic-ing and playing in the park instead of insisting on expensive date ideas and nights out.

5. Being Content with the Things I Have

I currently live in a two bedroom apartment that my parents think are sketchy, but I pay around $600 a month for all of my bills total. I bought the cheapest queen size bed the store had. I have my parents old couches, stains (that I put there) and all. I don’t have cable. I drive a less than new car, but I gets me to and from work and doesn’t cost me too much in gas to go home.

My things aren’t perfect but they are nice enough for me to manage. I don’t eat steak every week, but I definitely don’t go hungry. (even though 80% of my meals are leftovers).

Of the 5 things that I learned, I have to say that I am glad that my parents encouraged me to live without a credit card. I don’t have one now, even though I have thought about it for the rewards. I can financially leave within my means and that is not something that most families are able to say anymore.

What are things that you would learn or have learned from not using loans are credit? 

Please share your story with me!