Debt Free Living

This is a long post. It is a serious post. Probably a boring post. Just remember, YOU asked for this post.

I am a big advocate of debt free living. If I don’t have the cash to pay for it right then, I don’t buy it. Seriously.

Hard to believe, huh? I am totally indulgent and yet I believe in being debt free. Lower your eyebrows. It’s not THAT hard to believe.

I think the only thing anyone should finance is a home. If you do finance a home, I would recommend that your house payment should not exceed one week’s net income.

If your monthly payment is more than one week’s net income, you’re gonna incur other debt too. You, my friend, are living beyond your means.

Hey! Don’t blame me! I’m just the messenger.

I learned that tip from the Sweet Mortgage Dude that helped me when I decided I wanted to buy my first home. He said he’d give me a home loan with a monthly payment of two weeks net income but he didn’t recommend I take him up on that offer.

I listened to his advice and I’m glad I did. If you don’t want to trust me, trust Sweet Mortgage Dude.

Don’t get me wrong. I’m not all smart and fiscally responsible. Well. I wasn’t always. I try really hard to be now.

I didn’t always live debt free. I had credit card debt. It kept me up at night worrying. Credit cards can be evil little boogers.

I also had student loans. Lots of debt in student loans. I resented those loans.

How did I pay off my debt?

I did a lot of things. Self control type things. Painful things. Things you may consider crazy.

Let me say this again. I’m debt free. Who’s crazy now?

First, I used my tax refunds to pay off the student loans. Instead of buying a big screen tv or a new computer, I just handed the refund over to the student loan people. It took a couple of years but it was worth it. I think we both were relieved. (The student loan people are thin skinned and have no sense of humor. I was angry that they got my tax refund. They were angry that I called them whoremongers, thieves and meanies.)

Second, I lived without cable or satellite tv for four years.

Did so! I had RABBIT EARS. It didn’t kill me. It won’t kill you either. Books are better for you and you can borrow them from the library for FREE. Also, nowadays you can watch most of your tv shows online.

Speaking of books. For 10 years I didn’t buy books. I had to solely rely on the library for my reading fix. Hardest. Thing. Ever.

Third, I don’t buy very many prepared foods. I make most things from scratch. I also eat a lot of beans and rice. Beans and rice are healthy and fairly inexpensive. You can buy both in bulk. We have beans of some sort several times a week.

For example, Saturday we had pinto beans for lunch and lentil soup for dinner. No meat at either meal. Meat is expensive and we eat it about once a day max.

Speaking of meat, we hardly ever eat chicken. Our friends farm chickens and they don’t eat chicken. They told us why. Now we don’t eat chicken that isn’t tofu disguised as chicken. If you want to know why you shouldn’t eat chicken, I’ll tell you.

We do eat beef. We are beef farmers. The FDA has gotten so strict with the beef processing, it’s actually cleaner than chicken. Don’t tell me a damn thing about pork. I want to gleefully stuff my face with bacon. I beg you not to ruin that for me.

Fourth, you can’t save a lot of money eating out. So, knock it off. Eat in. Your heart will thank you later.

Fifth, I rarely buy new. If I’m on a strict budget, I don’t buy new. At all.

You can buy designer clothes that haven’t been worn very much at all on ebay. You can buy these very expensive clothes at a steal.

If designer clothes mean little to you, buy at Walmart or Target. I know you’ll hate to hear this but Walmart’s clothes actually last longer than Target’s. Tragic, right?

If I do buy new clothes, I buy them on sale at deep markdowns. I’ll get a $500 suit for $110. Or a $60 top for $4. A classically styled suit will last several years if it is of good quality and is worth paying a little extra for if your job requires suiting.

Sixth, don’t buy a new car. Stop your sputtering. You heard me. Don’t do it.

Cars immediately depreciate in value. If you do your research and really look, you can find awesome used cars for next to nothing. Next to nothing!

If you buy a car, new or used, pay cash for it. Don’t finance it. Car payments are an albatross.

Seventh, do not finance a vacation. I know people that charge the costs of vacationing. Dude. If you can’t afford to go, have a staycation.

We spend our vacations at the local lake. We pack PB&J sandwiches, homemade tea and fruit, grab a blanket and head to the state park. We swim, we sun, we hike for the low low cost of a $30 a year park pass.

If we do go away for vacation, we go in the off season. My husband negotiates a hotel rate at the hotel’s front desk when we get there. We have spent as much as an hour negotiating with several hotel managers til we found a rate we could afford.

While on vacation, we will eat out one meal a day and save half for lunch the next day. We breakfast at the hotel. Food costs are typically $25 a day for the two of us. That includes tips. I tip 20%. Servers work hard.

Eighth, if you have extra money, put it toward your mortgage. If you make more payments early in the mortgage, it will really decrease the length of your loan. A Mortgage Attorney taught me that. He wasn’t cute or sweet. He was old and humorless. I trust old and humorless Mortgage Attorney.

Ninth, prepare for your retirement early. Have a strategy in place. Trust me, you can’t live on social security. You need IRAs, 401ks or SOMETHING. (I decided on rental properties.)

Tenth, have fun. Enjoy the simple pleasures of life. Don’t try and keep up with your friend’s or neighbor’s spending. It’s silly.

Remember, once you are debt free, you can determine how you want to spend the extra money you were once paying out to credit card companies, car loan thieves and mortgage banks.

Just remember, if you can’t pay cash for it, don’t buy it. Otherwise, you’ll be right back where you started.

The above post is based only on my personal experience. I have no financial background or training. I’m just a simple country girl. In fact, right now, I’m wearing gingham. So take all of my advice with a grain of salt and research for yourself the best way to manage your money. I am only responsible for my finances and can’t be responsible for yours. The state won’t let me. They are so strict!