Living without the plastic cushion

Eve Tahmincioglu • Profile • E-mail

Lisa Brough was forced into a debt-free life by medical disaster.

Her husband has Huntington’s disease, a degenerative brain disorder, and has been unable to work since 1999. The couple, who have three children, saw their finances suffer as a result. They ended up with $50,000 worth of credit card debt as Brough worked two jobs and still struggled to pay the bills and the high property taxes on their home in Westchester County, N.Y.

“I said to myself, ‘I can’t do this anymore,’ ” she recalled. “He was going downhill, and I had to figure out a way to get out of this. I couldn’t count on tomorrow because I didn’t know what tomorrow would bring.”

In 2005, she took drastic measures. She decided to sell her $350,000 home, pay off all the family’s debt, and move to lower-cost Cary, N.C., where she was able to buy a house for $164,000 house in cash.

Since then it’s been cash and debit cards only for Brough, 50, who has no debt of any kind.

How does she do it? She buys secondhand furniture and electronics, gets her husband’s medicines from Canada at cut rates, has a $10,000 emergency fund and thinks long and hard before she opens up her wallet.

“When you use cash you think about what your needs are because you’re paying a big chunk of money at once,” she said.

This concept is probably a foreign one to many Americans who are addicted to buying almost everything on credit. But believe it or not, it is possible to survive and thrive without depending on credit cards. In fact, Brough is part of a small but growing debt-free movement, some joining because of personal or economic hardships, and others just looking to simplify their lives.

It’s all about economic empowerment. “Times are tough and people want to take control of their finances,” says Denis Cauvier, a financial psychologist and co-author of “The ABCs of Making Money.”

“When people look at what’s happening, all the ups and down of the stock market, housing prices, people getting laid off, they get a sense they are out of control,” Cauvier says.

As a result, “we’re seeing a huge rise in the use of cash and debit cards,” he says. “It’s a positive way of gaining self control.”

While there are no hard numbers on how many people are giving up the credit-card lifestyle, more consumers have been trying to reel in their debt levels.

Consumer credit has been falling at record levels after years of climbing. In April, credit card borrowing fell at an annual rate of 7.5 percent, and revolving credit, mainly credit card debt, decreased 11 percent, according to the Federal Reserve.

JD Roth, who writes the “Get Rich Slowly” blog, says more of his readers want to move in the debt-free direction. “It’s this whole movement back to basics,” he says.

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However, he adds, “Our culture is so accustomed to getting what they want right now and using debt to do that, it may not be realistic for every individual.”

Indeed, going debt-free is no cakewalk.

“We have to always plan ahead now and make sure we have the cash,” says Jeff Pelletier, who stopped using credit cards after a series of unfortunate financial events. He lost his job nine months ago producing training videos for a St. Louis company, lost his house to foreclosure,   ended up $50,000 in debt and filed for personal bankruptcy late last year.

Without credit cards, he has been unable to make major purchases. “We’re sort of living hand to mouth,” says Pelletier, who relocated to Boise, Idaho, for a job with a general contractor and is renting a home with his wife and two sons.

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