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Alex Horvath / The Californian

Columnist Valerie Schultz

Five years ago, the economic planets aligned in our universe, and not in a good way. The nationwide recession and resulting tightening of credit, combined with pay cuts in the form of state furlough days for my husband and me, as well as our perennial lack of financial discipline, threw us against the wall and gave us two stark choices: declare bankruptcy or adhere to a strict debt management program.

Since we had charged up our credit balances and gotten the benefit of all those loans fair and square, we opted for the second plan.

Overnight, we became a cash-only establishment. All of our charge accounts, sources of comfort and salvation, were slammed closed. We ceremoniously cut up the cards. An enormous chunk of our monthly income was automatically directed to paying off our debt. In exchange for our promise to pay regularly, the interest rates on our cards were reduced to manageable percentages. The debt management company projected payment-in-full to all creditors in five years.

Five years, 60 months, 240 weeks, 1,680 days: That's how long we have sweated out those payments. Now, as of this month, we are debt-free. OK, not counting our mortgage and student loans. But the crush of revolving credit has been lifted. Our burden of monthly obligations is now much lighter.

Five years ago, when we took the first steps of this sobering journey, we called it the New Austerity. At the time, I wrote about the things that, without credit, I could no longer do: "I no longer renew magazine subscriptions, rent movies or send flowers.

I no longer pay for a car wash or pick up a pizza, treat myself to Starbucks or drop clothes at the dry cleaner. I no longer participate in the school fundraisers of my co-workers' children, give money to charity, or buy Tupperware/Avon/ Pampered Chef or any other products that support the friends who sell them." We got down to basics, which mandated major changes in lifestyle.

The New Austerity required drastic measures to reduce our monthly expenses. We canceled cable TV. (But we didn't give up all TV: Ours is the house with the digital antenna that looks like we are trying to contact extra-terrestrials.)

We eliminated the house phone. We recycled the extra freezer in the garage, which lowered our electric bill pretty dramatically. We raised the deductible on our car insurance, which lowered the premiums. We paid cash for gas, so we didn't get stuck with the penalty-per-gallon for paying with a card.

We washed our own cars. We mowed our own lawn. We wore sweaters during the winter and turned down the heat. We did not go out to dinner, unless it was someone's birthday. We saw movies via Redbox rather than on the big screen. We checked books out of the library.

We focused on free entertainment. Our mind-set became that, without disposable income, everything was negotiable.

The New Austerity forced me into different food habits, but these are practices I want to hold onto now that I am no longer broke all the time. For five years, I have brought my lunch to work. I've bought nonperishables in bulk out of the bins at Winco. I've used coupons, asked for rain checks and avoided name brands in favor of generics. I learned to use the stockpiled food in the pantry and the freezer, even the weird tea bags in the back of the drawer, because the rainy day we were saving these provisions for had arrived.

About a year ago, thanks to a few raises and the end of furlough days, we added some of the smaller luxuries back into our lives, but only if we could pay cash. I deeply appreciate the unmitigated pleasure of a $6 car wash, or a chai tea latte not made at home, or being able to tip the barista.

After five years of the New Austerity, I should want to frame the letter from the debt management company that says our account has been closed due to final disbursement to creditors.

On this first month without our monster payment, however, I feel strangely less euphoric than I thought I would feel. I sort of miss the intricate puzzle of each month's budget, the challenge of making it to the end of the month and still having a roof over our heads and enough gas in the tank to get to work. I even miss when affording the rare takeout pizza felt like victory-with-a--capital-V.

But we are packing for our first vacation in five years that doesn't involve staying with relatives. We are setting up several monthly contributions to long-neglected charities. Perhaps there will be no euphoria. I'll settle for the satisfaction that comes in little waves: We actually did it.

These are the opinions of Valerie Schultz, not necessarily those of The Californian. Email her at