Thats true, its all relative to the situation you are in. And if its a small budget (and i mean small) it should effect your financial plan of paying off debt. The key is to find free entertainment and it gives you a different perspective on how to live your life.

Rob101 wrote: You should be an extremist when it comes to debt. This means that you should be paying off your debts with extreme sacrifices. Consider a whole year of no vacations, no restaurants and no clubs or weekend entertainment that costs money. Make susbtantial sacrifices for substantial results.

The problem is that I know a few families that have lived like that for several years and are still sinking under debt. Medical expenses especially can wipe a family out, but there are also things like sudden unemployment, closure of major employers making several family members redundant at once, and other accidents. Many debt counsellors do advise people to allow a small entertainment budget because otherwise they try to sneak treats to ease stress, and don't stay with the debt management plan.

I agree, its a very fine line.

Breakinger wrote:

Egghead wrote: I think extremism is a nice idea in theory, but to put it into practice properly depends on two things: personality and life stage. As others have already said, this approach is doomed to fail for them from the start. In terms of life stage, if you are reasonably free of other debt sources (including children!) you may find it easier to deprive yourself for a while.

I agree with you completely. It will be much easier to get rid of my debt once my children have become adults. If I remember correctly, this is exactly how my own parents did it. For now, my husband and I are just trying to focus on the little things and paying off what we can, when we can.

My parents were the exact opposite of this. They had very little debt. They didn't charge things that they couldn't pay for. They had a mortgage and one car loan. I wish more of their financial sense rubbed off on me.

Sometimes debt can be a good thing. In business its critical. If you use debt as an investing tool, it can be beneficial. You just have to be careful.

Egghead wrote: I think extremism is a nice idea in theory, but to put it into practice properly depends on two things: personality and life stage. As others have already said, this approach is doomed to fail for them from the start. In terms of life stage, if you are reasonably free of other debt sources (including children!) you may find it easier to deprive yourself for a while.

I agree with you completely. It will be much easier to get rid of my debt once my children have become adults. If I remember correctly, this is exactly how my own parents did it. For now, my husband and I are just trying to focus on the little things and paying off what we can, when we can.

I think it's reasonable to say that sacrifices need to be made to pay off debt. Unless you make enough money to be able to afford investing, saving, and paying off your debt in a reasonable amount of time, you should be giving up some things until you get to the point when you have those things.

I don't know if I really believe this. Yes, you should concentrate on paying off certain debt but not by giving up everything else to do so. I think you should only take vacations if you have the money to do so. I would never charge a vacation to a credit card.

I think extremism is a nice idea in theory, but to put it into practice properly depends on two things: personality and life stage. As others have already said, this approach is doomed to fail for them from the start. In terms of life stage, if you are reasonably free of other debt sources (including children!) you may find it easier to deprive yourself for a while.

This is very good advice. Sacrifices should be made to eliminate debt, but also for savings. It amazes me how many people don't have any emergency savings yet they go out to eat once a week and routinely buy unnecessary things.

This is great advice. Unfortunately, debt is unavoidable, especially if you are just starting out. I love the idea of using Excel to help with managing your debt. My goal for this year is to pay off my credit card that I owe the most on and then move on towards other debts.

I agree, no debt is a great thing. However people such as myself that fail with crash-diets, first accepting the fact that debt is not a good thing - and shouldn't be "accepted as normal" is a great place to start. We all have trials and life, and some are costly leaving a trail of dust behind. Coming up with a plan, concentrating on paying off higher interest rate debts first and charting what you owe in Excel is very helpful.

Debt is a paycut. A small balance on a credit card can easily add up to a couple hundred dollars a month. To make matters sickening, look at the results from our interest only mortgage calculator . While being an advocate on home ownership vs renting long term, mortgage loans still make sense, however you will be much better off paying this ASAP.

You should be an extremist when it comes to debt. This means that you should be paying off your debts with extreme sacrifices. Consider a whole year of no vacations, no restaurants and no clubs or weekend entertainment that costs money. Make susbtantial sacrifices for substantial results.