What Debt Has Done to Me

I'm not feeling too good about myself today. Earlier, I had to tell one of my best friends that I can't make this year's annual trip to Reno. Why? Debt.

Let's check the replay
This may not be news to you. I first revealed my money indiscretions last summer. We were in hock for roughly $60,000 at the time. And that was just credit card debt. Had I included a $20,000 vehicle loan ... well, you can do the math.

Here's where we stand today:

First, let's review the good news:

• Since April, we've paid off nearly $10,000 in debt. I'm pretty proud of that.
• Our personal balance sheet is still very much in the black, and my SEP-IRA is filled with winning investments, including Akamai (NASDAQ:AKAM), Oracle (NASDAQ:ORCL), Nokia (NASDAQ:NOK), and Nathan's Famous (NASDAQ:NATH).
• At last count, our effective interest rate on debt was less than 6%. Our investments have been returning much more than that, which means, even with debt, we're continuing to improve our net worth.

But ...
Financial progress comes with a cost. I'm working double shifts almost daily. I have to. I'm not the sort of writer who knocks out a best-seller in a week. (Does anyone?) I'm a ham-and-egger -- the shortstop with the decent glove who's happy to be collecting a paycheck in the bigs.

As such, the effort required for me to dig out of this hole we're in is, at times, unhealthy.

And it isn't good for my wife and kids, either. While our neighbors are on vacation, I'm in the basement, hunting and pecking my way to another paycheck. While others are remodeling their homes, I'm in the basement, negotiating with lenders to reduce rates. And while my buddies are headed to Reno, I'll be in the basement, wondering when I'll ever get a break.

How to take a break without breaking the bank
Most days, the answer would seem to be never. But that's unacceptable. We all need a break from time to time. Fortunately, we can all get one, even those of us in debt.

Recently, for example, I used points from my American Express Membership Rewards account to book a night away for me and my wife in Boulder, a short drive from our home in Littleton, Colo. No kids -- just us.

You can do this, too. Here are three tips for getting more from your miles:

• Combine your accounts. Airlines are beginning to enforce expiration dates for miles. United, in particular, could erase millions of unused miles come December. To avoid this, you might try gifting your unused balance to your spouse or your friend, and then letting them book all of your travel from that one account.
• Keep the chains. Hotels almost always offer better deals than airlines when it comes to rewards. Hilton (NYSE:HLT), for example, offers both rooms and full-blown vacations. You can also transfer points to airlines or other partners to help defray your trip costs.
• Use generic rewards. Here, I can't recommend Membership Rewards enough. We were able to book a night in a hotel chain whose affinity program I'd not yet joined. Citigroup's (NYSE:C) Diners Club offers similar benefits. Still other credit cards will allow you to generate free tickets for any airline after you've charged a certain amount.

Follow the money
I'm passing on the Reno trip mostly because I need the days -- and, yes, some weekends -- to generate enough moola to keep chopping away at our debt. But I'm also more convinced than ever that we needn't suffer in the process. Tune in Friday when I reveal how my wife and I will this fall use miles to celebrate our 10-year anniversary.

And, in the meantime, if you're in the market for more money tips, consider Motley Fool Green Light, our personal finance service, where co-advisors Dayana Yochim and Shannon Zimmerman show you how to unlock the fortune hidden inside your paycheck. You'll find nearly $500 worth of advice in the July issue. Get your copy and 30 days of unfettered access to the service, free, right now. There's no obligation to subscribe.

Fool contributor Tim Beyers writes weekly about personal finance and investing basics. Have a Foolish money tip? Tell him. Tim owned shares of Oracle, Nokia, Nathan's Famous, and Akamai at the time of publication. Akamai is a Rule Breakers pick. Find Tim's portfolio here and his latest blog commentary here. Need sunscreen? The Motley Fool's disclosure policy has plenty of SPF 50.