by Anirudh Sharma

Created on: January 19, 2009   Last Updated: May 28, 2009

My grandfather didn't have a credit card. In fact, he didn't have any debit card, or membership card, and the best part is he didn't have any debt. He was a hard working man who worked even till the day he died in his seventies. He dealt with all business in cash.

At the end of each day, he would sit on a comfortable lounge chair and list all his expenses in a tiny pocket-sized notebook. He would then take money out from his "money box" locked up in his drawer for the next day. He then made small piles for different needs; this much to grandma for groceries and stuff, that much for cash flow in his shot, this much for the children (he had a habit of giving all children a coin of equal denomination every day to buy an ice-lolly or candy each), and that much for charity.

He was, in short, the credit card companies' nightmare. I am sure, if you dig enough, you will find your grandpa or great-grandpa that did the same. I believe, the only way to get out of the vicious credit card (read debt card) trap is the "grandpa-way". This is no rocket science but needs a little bit of discipline.

To start with, prepare a list of all bills you need to pay this should include your monthly expenses. List down every single thing, right from the $3 coffee on the way to work, utilities bill, broadband fee, groceries, childcare, lunch allowances and so on. And diligently include all credit card payments to be made to the list.

So far you have done a great job with the list. Now go to your bank and open an additional savings account. Every month (or fortnight or week) as the salary gets in the bank, keep only the money you need for your expenses as per the list in your primary account and transfer all "extra" money to the new account. Use the debit card for your primary account to pay your bills. Don't feel stymied and go ahead and buy whatever you desire but only use the debit card.

If you don't have any extra money, go back to the writing board with your list and chop some of the money allotted (don't chop any of your daily carving objects if you want to be successful in your trimming rather try cutting down on brands rather than essentials) to spare some cash for your "extra" money.

When you have at least two month's salary in the extra money (the day will come as it did for me, don't worry) any extra money you have, pay towards the credit card with the least amount of outstanding. And there you will embark on your journey towards a debt-free life.

Finally, you may reward yourself each time you finish paying one credit card but remember to pay by your debit card!

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