Goodbye to Debt
The new American status symbol and how to achieve it
That education is key to using credit wisely. And the lesson seems to be sinking in, even among those whose retirement years are decades away. "If we don't have the money to go out to dinner, we don't charge it," says 24-year-old Jason Kaufman of the lifestyle he and his fiancee, Allison Anderson, lead in Portland, Ore. "We have learned to live a step below what we would like to, knowing that the future will be better because of it."
Snowed under? Dig yourself out These groups provide free or low-cost help for debtors:
Credit and debt counselors. The National Foundation for Consumer Credit (800-388-2227; www.nfcc.org) oversees 1,400 local Consumer Credit Counseling Service offices, which can set up individual debt-repayment programs.
In the past few years, a number of debt-counseling firms have sprung up. To get advice on how to choose a counselor--including what you are entitled to know about the counselor's role in assisting both you and your creditors--visit the Federal Trade Commission's Web site at www.ftc.gov.
Cooperative Extension System educators. More than 100 state universities and nearly 3,150 counties have cooperative extension offices that offer personal-finance education. Many of the offices are rolling out the Money 2000 program, which encourages participants--through meetings, newsletters, and interactive Web sites--to increase savings and/or reduce debt by $2,000 by the end of the year 2000. To find a county extension office, consult the government listings in the phone book.
Debtors Anonymous. Modeled after Alcoholics Anonymous, this group provides a 12-step recovery program for compulsive debtors. For more information and a meeting list, write Debtors Anonymous, PO Box 400, Grand Central Station, New York, NY 10163-0400.
[Photo captions]: On with the show Liz Lahm, Lexington, Ky. Lahm is tired of playing the credit-card game. Being in debt has left her yearning for the funds to expose her sons, 14-year-old Eric (left) and 12-year-old Kevin, to plays, musicals, and concerts at cultural venues like Lexington's Opera House. "I haven't spent much on fun things for me and my family," she says. "It's been a struggle."
Waiting for baby The Westleys, Pompton Lakes, N.J. Greg and Eileen Westley's dream is to save enough money for a home and their child's college education. Their first goal: paying off their wedding bill (from 1996) at $1,100 a month. For Greg, that means working three jobs. "We don't even use credit cards anymore unless it's an absolute necessity," he says. "We squeak by each month, we really do." That means no vacations--and no meals at fancy restaurants.
Down on the farm The Birchalls, Moorestown, N.J. Maisha and Dan Birchall plan to pay off their student-loan and credit-card debt, bid goodbye to New Jersey, and say hello to their dream: a cooperative farm (they're looking at Oregon or Virginia). They follow a strict budget that, according to their calculations, will let them erase their debt next fall. "We are living on about $10,000 less than I make," says Dan.
YOUR CREDIT SCORE The number they won't let you see Most consumers know about credit reports. But what can make or break a decision to grant credit is a number you'll never see--your credit score. When you apply for credit, data from your report are typically fed into a statistical model that spits out a numerical score designed to predict your risk as a borrower. U.S. News explains this closely guarded secret.
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