Frugal Japan
Living frugally in an expensive world

A few weeks ago (when the weather was a bit more bearable), I introduced a rather ambitious topic: debt-proof living. After defining debt-proof living, I promised to revisit the idea with further details later. Well, the time has come. This week will be the second in a series of articles devoted to steps to achieving debt-proof living. Let’s get started!

The first step in becoming debt-proof is the most vital — a change in your attitude. How many times have you been shocked by your high credit card bill or your too-low bank balance? The shock might have spurred you to temporarily mend your ways by paying off a few credit card balances or saving for a few months. But gradually, most people return to their former habits. Sometimes a sudden or unexpected expense, like doctor’s bills or home or auto repair, puts you over the edge, or you may have a gradual lapse in principles, like overspending on a vacation. Regardless, a major lifestyle change is usually required to make any permanent progress toward debt-proof living.

Mary Hunt identifies six fundamental principles behind debt-proof living. The major thrust of these is that we are stewards of the money we are given to use. It is a gift that is ours to manage wisely, not to pilfer away, and that we must never keep or spend all of our money. Unsecured debt is ultimately a hazard to financial well-being — and more money is not the real solution to our problems.

Practically speaking, the change in attitude has to begin with a commitment on your part to do the following:

1) Recognize that money is both a gift and a tool, to be managed and nurtured wisely, through the principle of wise stewardship.

2) Set aside a certain ratio of your income to save, give and use. (Mary Hunt recommends a 10 percent, 10 percent and 80 percent formula, but individual needs should determine this.)

3) Incur no additional new unsecured debt, and work to reduce the debt you have. If you must incur debt, try to pay it off within the month.

4) Realize that the scale of your spending generally grows to meet your income, and that a higher income will only result in more expenses unless you get your spending under control.

There is a lot of heavy-duty information in the two paragraphs above, and it might take some to sink in. If you are serious about learning to live a debt-proof life, I recommend taking a good look at Mary Hunt’s website: http://www.cheapskatemonthly.com. The price of online membership alone should be more than rewarded by the changes you find in your life if you are able to make the serious changes required.

© 2004 Wendy J. Imura.