Are you Debt-Free?

[MaryCatherine]

If so, and if you'd like to, I'd love to hear your story. I'm starting this in January. I've listened to Dave Ramsey for YEARS but just never believed that I could do it. I have two massive student loans that just keep growing, even though I pay on them every month. I have to do something drastic, or they will never go away. So I've picked up an extra job working one shift (I'm an RN) each week, I'll keep my weekend job and we're cutting back to nothing. Kids are reluctantly on board. They understand, but aren't looking forward to it.

 

I'm also working on my Christmas list. I want a new fancy rice cooker - I'll use it a LOT!! I also want one of those water filter pitchers and reusable bottles so we don't have to buy bottled water. I also need another set of scrubs for work. My extended family is very supportive of my doing this - yeah!!

 

Anyway, any tips, encouragement, BTDT stories - I'd love to hear them all!! Thanks -

 

-Anne

[KrissiK]

Yes, except for our mortgage, which we just refinanced for a 15 year, and if we needed to, we have enough in savings to be able to just pay it off. However, we have decided we are better off paying on the mortgage and leaving our money where it is. Dave Ramsey is great and his advice is great, but there are some things we don't agree with him. Unfortunately, we don't have a story. Both DH and I were raised very frugally, so we never really had to dig ourselves out of debt. We do live by certain principles though:

1) We pay off our credit cards every month, no exceptions!

2) We keep a very detailed budget on an Excel spread sheet

3) We do without a lot of things... no cable, our cell phones are pay-as-you-go, which averages out to be about $8/month each, we rarely eat out

 

I wouldn't say that I miss anything we do without. I'm happy with our life, but even happier with the fact that we have no debt. It's a good feeling.

[lilbean05]

We are not--far from it actually because we bought a house in Las Vegas on credit before the market tanked. Yeah.

 

But, I do have a friend who is! They started out that way, from what I understand, and have made the decision to never buy anything on credit. They don't have credit cards, a mortgage, a car payment, anything. They save until they have enough, and then they buy only what they need. So, I think they are still renting and are saving and saving to buy a house even after 16 years of a career. They only own one car and I think when they bought it, it was the first new car they have purchased.

 

Truth be told, I think they have made a mental shift to only desire what they need with minimal extras. They never feel like they are missing anything.

 

:)

[DawnM]

We are on everything except the house. We started Crown Financial about 4 years ago. At the time we had student loans, car loans, and mortgage and not much in savings.

 

We now have paid off the student loans, car loans, and have at least 6 months in savings, possibly longer if we stretched it out.

 

It was NOT FUN going through the process, I will warn you ahead of time. We stopped eating out, went to envelopes, limited vacation money, and told the kids NO a lot. We even had our upstairs heat pump go out on us and decided that since we were not out of debt yet or have the money to pay cash for it, that we would all basically LIVE in the lower section of our house for an entire summer to not go into debt more and save up.

 

Dawn

 

PS: BTW: I LOVE our rice maker. I have a Zojirushi and have had it for 7 years now and we use it at least weekly.

 

If so, and if you'd like to, I'd love to hear your story. I'm starting this in January. I've listened to Dave Ramsey for YEARS but just never believed that I could do it. I have two massive student loans that just keep growing, even though I pay on them every month. I have to do something drastic, or they will never go away. So I've picked up an extra job working one shift (I'm an RN) each week, I'll keep my weekend job and we're cutting back to nothing. Kids are reluctantly on board. They understand, but aren't looking forward to it.

 

I'm also working on my Christmas list. I want a new fancy rice cooker - I'll use it a LOT!! I also want one of those water filter pitchers and reusable bottles so we don't have to buy bottled water. I also need another set of scrubs for work. My extended family is very supportive of my doing this - yeah!!

 

Anyway, any tips, encouragement, BTDT stories - I'd love to hear them all!! Thanks -

 

-Anne

Edited October 28, 2010 by DawnM

[Guest CafeMocha]

:confused:

If so, and if you'd like to, I'd love to hear your story. I'm starting this in January. I've listened to Dave Ramsey for YEARS but just never believed that I could do it. I have two massive student loans that just keep growing, even though I pay on them every month. I have to do something drastic, or they will never go away. So I've picked up an extra job working one shift (I'm an RN) each week, I'll keep my weekend job and we're cutting back to nothing. Kids are reluctantly on board. They understand, but aren't looking forward to it.

 

I'm also working on my Christmas list. I want a new fancy rice cooker - I'll use it a LOT!! I also want one of those water filter pitchers and reusable bottles so we don't have to buy bottled water. I also need another set of scrubs for work. My extended family is very supportive of my doing this - yeah!!

 

Anyway, any tips, encouragement, BTDT stories - I'd love to hear them all!! Thanks -

 

-Anne

I am a RN as well, however I have not worked for three years. I am considering seeking work to help with our goal of being debt free. My DH does not want me to do this, but I think it would be helpful. Realistically, I would love to continue being at home full time, but I see more and more needs popping up (Orthodontia being primary) that I feel could be helped by a shift or two per week. How do you work working into your homeschooling and children's activities?

[SquirrellyMama]

We paid off our student loans, credit cards and car loans. We only have our mortgage left and we just refinanced that to a 15 year. We now save up to do anything since we cancelled all of our credit cards.

 

Good luck! You won't regret doing it.

 

Kelly

[DawnM]

Kelly,

 

What do you use when you need to order something online? I don't use my cc much, but I do use it for ordering books from Amazon, etc....also, I use it at the gas pump.

 

Thanks,

 

Dawn

 

We paid off our student loans, credit cards and car loans. We only have our mortgage left and we just refinanced that to a 15 year. We now save up to do anything since we cancelled all of our credit cards.

 

Good luck! You won't regret doing it.

 

Kelly

[Mama Geek]

We are completely debt free and we have savings. We didn't really follow a program, we just did things that we both learned while growing up and we have taken some chances with employment that have payed off.

 

Our college degrees are in fields that pay fairly well.

 

We bought a house that we could afford on 1 salary

 

We have only bought vehicles when they are to the point that they will not run and then all but our last vehicle we have bought very basic. Our last car we bought right after we went to AK for contract work and knew that we would be able to pay for it in a couple of months after starting the job up there. It was a 4WD jeep. Used 4WD's were almost as expensive as new ones.

 

We do most of home repairs, vehicle repairs, etc ourselves. (Thankfully my dh is blessed with the experience to do these things.)

 

We both worked full time professional jobs for 10+ years.

 

We had a mortgage on the house that we paid off after working in AK. At that time dh and I agreed that we never wanted to be in debt to anyone again. I would not buy another house where I had to have a mortgage again.

 

We do pay off credit cards every month.

 

For probably 8 years after graduating college, we though Cracker Barrel was to expensive to eat at. We then walked in there 1 day and realized that our frame of reference had changed some since we were poor college kids:lol::lol:

 

I second the zojurushi rice cooker. Ours gets used all the time.

[justamouse]

apart from the mortgage, no. BUT we lived without a lot (when everyone had stuff) to be debt free now. And that was not fun. But now? Totally worth it. Although it's very sad that I have stuff when everyone else is broke. I feel very very guilty most of the time because of that.

Edited October 28, 2010 by justamouse

[babysparkler]

We are debt-free... actually we were when we started Dave Ramsey... but the course has been very helpful to us anyway! I highly encourage the course!!! I dislike his envelope system (for lots of reasons) and still use our credit cards (paid off in full monthly)... but there is so much more to the course than just being debt-free. It is great for long-term financial plannning. My older kids have been sitting in on the videos and have been gleaning great info too.

[bookfiend]

If so, and if you'd like to, I'd love to hear your story. I'm starting this in January. I've listened to Dave Ramsey for YEARS but just never believed that I could do it. I have two massive student loans that just keep growing, even though I pay on them every month. I have to do something drastic, or they will never go away. So I've picked up an extra job working one shift (I'm an RN) each week, I'll keep my weekend job and we're cutting back to nothing. Kids are reluctantly on board. They understand, but aren't looking forward to it.

 

I'm also working on my Christmas list. I want a new fancy rice cooker - I'll use it a LOT!! I also want one of those water filter pitchers and reusable bottles so we don't have to buy bottled water. I also need another set of scrubs for work. My extended family is very supportive of my doing this - yeah!!

 

Anyway, any tips, encouragement, BTDT stories - I'd love to hear them all!! Thanks -

 

-Anne

 

Just my POV; however, I believe you should start out modeling what you want your children to accept. The indulgence of a high end rice cooker when a sauce pan and boiling water on the stove works perfectly fine is the kind of spluge you wait to buy when you are out of debt. Buying expensive Christmas gifts and then seven days later declaring an austerity budget sends a mixed message. Show them you are serious by making the sacrifice yourself first.

[NicksMama-Zack's Mama Too]

Yes, except for our mortgage, which we just refinanced for a 15 year, and if we needed to, we have enough in savings to be able to just pay it off. However, we have decided we are better off paying on the mortgage and leaving our money where it is. Dave Ramsey is great and his advice is great, but there are some things we don't agree with him. Unfortunately, we don't have a story. Both DH and I were raised very frugally, so we never really had to dig ourselves out of debt. We do live by certain principles though:

1) We pay off our credit cards every month, no exceptions!

2) We keep a very detailed budget on an Excel spread sheet

3) We do without a lot of things... no cable, our cell phones are pay-as-you-go, which averages out to be about $8/month each, we rarely eat out

 

I wouldn't say that I miss anything we do without. I'm happy with our life, but even happier with the fact that we have no debt. It's a good feeling.

 

Same here, except we haven't refinance our mortgage (not sure it's worth it since we are so far into it). My hubby has Quicken files and spreadsheets from our whole marriage. Which reminds me, I have to go enter my receipts today!

[Nestof3]

We paid off our house and van last year. We still have some credit card debt, but it is at zero percent and will be paid off by July 2011. Because the other two had interest, we paid them off first.

 

We could pay the whole thing off right now, but we have not for two reasons:

 

1. We have been investing instead.

 

2. We have not taken as much salary as my husband could have taken this year, and with the extra, we could pay the credit card off, but I like to have a money cushion. Think of it as living on less than what you made last year but knowing that the whole thing could be given to you in one paycheck. It is in the business account right now.

 

Not very Dave Ramsey-ish, but it works for us. ;)

[Alenee]

We're working towards it. All we have is our house and my car. We have put ourselves through the ringer in the past and learned not to do it again. However just as we got down to only mortgage, dh lost his job. We had just begun saving money. It was a huge blow! The only saving grace there was the severance and the job he got just after that paid him about 40% of what he had been making.

 

Dh got back into the industry in Feb. and then received an offer to come back to his original company. The opportunities for growth and transfers are far better so we took it. We're barely making it right now because he's not on his regular shift yet but should be by the end of the year. When that happens, we should be okay and will be able to get my car paid off rather quickly.

 

I wish we never allowed ourselves to go into debt 15 years ago but I also know we learned some valuable lessons we can use now w/o feeling like we're missing out on anything and that we can pass on to our kids. Before our debt, we didn't know a thing! :lol:

[MaryCatherine]

:confused:

I am a RN as well, however I have not worked for three years. I am considering seeking work to help with our goal of being debt free. My DH does not want me to do this, but I think it would be helpful. Realistically, I would love to continue being at home full time, but I see more and more needs popping up (Orthodontia being primary) that I feel could be helped by a shift or two per week. How do you work working into your homeschooling and children's activities?

 

My regular job is weekend nights - I work Sat night and Sun night. At our hospital, that's considered full time so I get full time pay and full time benefits. My extra shift will be in our hospital's float pool, so I will decide ahead of time which night it will be. I'll work around activites that way, plus my oldest two are still at home and help with transportation if needed. It's easy to type that all out - hope real life is as smooth.

 

Kelly,

 

What do you use when you need to order something online? I don't use my cc much, but I do use it for ordering books from Amazon, etc....also, I use it at the gas pump.

 

Thanks,

 

Dawn

 

I haven't had a credit card since the divorce, 11 years ago. I use my debit card and have never had a problem. I know that others have strong opinions about that (I've been around here long enough to know :001_smile:) but that's how I do it.

 

Just my POV; however, I believe you should start out modeling what you want your children to accept. The indulgence of a high end rice cooker when a sauce pan and boiling water on the stove works perfectly fine is the kind of spluge you wait to buy when you are out of debt. Buying expensive Christmas gifts and then seven days later declaring an austerity budget sends a mixed message. Show them you are serious by making the sacrifice yourself first.

 

No, my Christmas list is for my mom and sister. They've asked how they can help. My Christmas is bare bones as usual. I've been single for 11 years - my kids know frugal very well. My debt is only my student loans and my mortgage. Unfortunately, my loans were on hardship deferral for several years after the divorce (as was the rest of my life), so interest really added up. I've been paying on them regularly for about 5 years now and the balance goes up every year. I have to get drastic. I owe a total of 60K between the two of them. Ugh.

 

Loving the stories - thank you!!

[ondreeuh]

Yep, well, mostly. We have a mortgage, and a little home equity loan that we could pay off this month if we wanted to, but it's better for us to keep the money in our bank account.

 

DH was self-employed for a few years which was really tough on us. When the housing market took a nosedive his work dried up. We gathered fairly significant debt while we tried to ride it out and pay for reading therapy. It could have ruined us but luckily dh was sent to Iraq for a year on a well-timed deployment and we paid everything off and saved some. Thank goodness.

 

We're in another weird stage now while he's in grad school because the VA is supposed to be paying and they are behind. If we didn't have savings we would be ruined again. Once they pay we will be OK but our future livelihood depends on dh getting a job out of grad school. We will likely have to move a significant distance because he's getting his teaching degree and there are no jobs here. I look forward to someday feeling financially secure!

[Punks in Ontario]

Yes, we were completely debt free. Many years ago, we worked hard to pay off our mortgage, only to ignore a bit of debt on our line of credit. A couple of years ago, we were regularly spending about $3-500 more per month than we were bringing in. We rationalized it that it would be covered by a year end income payment that we'd get. Finally we got gazelle intense in getting rid of it. We paid off $30 000 in a little over a year.

 

That said we're borrowing to go into a business right now. We have no intentions of going into personal debt again. BTW the business debt should easily be paid off in less than 10 years.

 

We try to live quite simply as others here do. We don't cable, use the library extensively and I don't have a cell phone. We only have one vehicle which is okay since dh has a van for work. We have simple wardrobes although I haven't gotten into buying used. Most of my youngers' clothes are given to us. oh, and we rarely eat out. We've made our house quite energy efficient while making sure we didn't spend on upgrades that wouldn't pay for themselves.

 

Sometimes I get tired of being frugal, but by and large, we prefer keeping it simple.

Edited October 28, 2010 by Punks in Ontario

[anneofalamo]

freeeeeeeeeeeeeeeeeeedom!!

 

we paid off 14k in credit card debt and

 

NEVER going back!

 

cash is king (well our debit card)

[Heidi]

Almost have the house paid off. I just blogged about it.

[Renthead Mommy]

We always had a plan. When we met, he had just started paying down his studen loan, but it was only around 60K, so it wasn't that much. I paid for college each semester, so I never had any student loans, but I had about $1000 in credit card debt.

 

We drove our cars for 10 years, only ate out once or twice a week, took low key vacations, bought a house that fit our needs, not something bigger just because we could, and waited till we could afford it to have a baby. I think we paid off his loan in about 5 years and had my son soon after that.

 

A year later he joined the AF. Now we move every 2-3 years, so now we don't buy houses, we rent, but we always rent below our BHA. We don't switch up cars ever few years, we drive them as long as they are not costing us money. We pay our credit cards off every month. Sometimes something big like new computer/appliance or cruise/vacation may get spread or a few months but that's about it.

 

Our big thing has always been the live below your means. I'm not a shopper, so that helps. I get things when we need them, not because "I'm bored, so let's wander the mall and oh look - isn't that cute?" We got grief from my parents when they visited a few weeks ago because our tv is old (it's not HD and it's too old to have the right kind of plug to be able to run netflix from your computer to the tv) and why haven't we updated it? Well because it works perfectly fine and the thought of just throwing it sort of appauled me.

 

The environmental side of me makes me stop and question a lot of purchases. Do I really need it? What about the old/current one? It's got SO much packaging. That was how I orginally got into making my own cleaners instead of buying regular. Sure I get 7th Generation or some other green type brand, but what I can make at home from 1 big plastic bottle of vinegar and cardboard boxes of baking soda and borax seemed to be so much less waste than there would have been from all the 7th Generation I could have gotten.

 

Books are another good example of that. This is pretty sacrilegious around here, but I don't buy books if I can help it. Sure workbooks and curriculum specific things I buy, but reading books, I try very hard to get from the library. My son does his assigned reading and they go back. If he wants them again, and they've turned into true favorite, we'll probably buy it, but otherwise, if it's only going to get read that one time, and it's available at the library we get it from there. It costs me a little time to do the research and request the books, but they are cluttering up my house or being shipped from somewhere, especially with the ton of packaging I've seen some books come with.

 

I guess the big thing is, look at how you are spending your money. Once you get everything paid off, KEEP looking at how you are spending your money. And be realistic about the amount of money you have to spend. Just because you make X amount of money and you qualify for Y sized loan doesn't mean you have to get a house costing Y! Out of that X money, not only do you have to pay for that house, but cars, food, utilites, taxes, life insurance, college funds, retirement fund, 6-12 months of emergency fund and other expenses. Remembering how much we had left after all of that, and then learning to live within that was what made the huge difference for us.

 

Things like your water filter and water bottle, would fall more into a need category for me. I hate the plastic bottles so upgrading would be a sure plus for my enviro side. And after your initial investmen, you would save so much more money in the end. Even leaving out the plastic bottle issue, the money saved would be worth it.

 

The scrubs would fall under a need for me too. If you only have one pair you are forced to run a load of laundry every day so you could wear them to work the next day. By investing in that extra pair, in the end you are saving money on laundry detergent, electricity and water. Plus you are saving yourself time! Besides, who wants to have to do laundry every day!

 

Things like the rice cooker I'd have to think about. Does the old one still work fine? Does it do the job you need it to do? If it's no longer big enough for your needs, and you have to run it twice, then yes, it becomes a need. If the new one is just prettier and has more fancy features, but you don't really need those features I'd have to really consider if it's a want or a need and where wants were fitting in our budget at that time.

 

 

Good luck. It's hard, but I'm sure you can get there.

[Mejane]

Sometimes I think it's more about what you don't do than what you do. Our only debt is our mortgage, which we're paying off early. We do without a lot, as a pp mentioned. The bottom line is - don't spend! I see family/friends who are in financial straits still spending on things like expensive cell phone plans, cable, clothes, redecorating, vacations, etc. What's that about?

 

When you want to get out of debt, you stop spending on anything that's non-essential and put all that money toward your debt. You take an extra job (if you're lucky enough to get one) and put all that money toward your debt. You allocate all your income and put anything left over toward your debt. You pay it down slowly, and one day you wake up and realize it's gone. THEN you can have all those non-essentials (but you pay cash for them.) :001_smile:

[Carrie12345]

We're on more of a baby crawl/scoot plan than a baby step plan. ;)

 

We did finance a car 3.5 years ago (which is mostly covered by dh's car allowance), but haven't charged anything else in nearly 5 years. We've paid off my own car and some credit card debt since then, but still have an annoying bit hanging around, plus about 30% of dh's student loans and our mortgage.

 

We go back and forth from being gazelle-like to just being frugal, which is why it isn't all gone. With an upcoming pay cut being probable, we'll likely be more gazelle so we can keep up the progress.

 

I do enjoy being frugal, and I do believe in aiming to be debt-free. As long as we're making progress on that front, there are some things I won't go without unless I'm forced to. And I'm okay with what that really means in the end.

[Kipling]

We have been doing Dave Ramsey since the summer. Fortunately, we were not in bad shape. We had a credit card that we paid off every month, but we realized that we were spending more using the credit card than we would have spent without it, so we paid off the balance and have not used it since July. We use debit cards for online purchases and gas. We did keep the credit card for certain things (renting a car, for example).

 

We have our $1000 emergency fund, and we are currently working toward paying off my husband's student loan, which is our only remaining debt except for mortgage.

 

Ironically, just when we started working toward all of this, my car was wrecked and we had to purchase a new one. We took the money from the insurance company and added whatever we could from our regular savings account (not emergency) and bought the best used car we could get with that. So, we didn't add any other debt, but it did set us back in paying off the student loan. I think we'll have that paid off next summer, and then we'll see about the house.

 

We're fairly frugal people, and like others have mentioned, we do most of our own home and yard care including repairs. We do eat out once a week, but we try to find low-cost places, and we take advantage of Kids-Eat-Free deals. We have never had cable or cell phones.

 

We started making a budget a few months ago, and it made a big difference for us! DH and I sit down twice a month to figure out a monthly budget and then do a mid-month check to see how it's going. I'm now much more aware of where the money goes, and being accountable has stopped me from spending money on little things that we don't really need. Doing a budget together and not using the credit card has probably "given" us about $200-300 extra per month.

 

Just two months ago, we switched to using cash as Dave Ramsey recommends. I think it's good, but I don't know if I think it's as wonderful as he thinks it is. I find myself "borrowing" money from one envelope if another is short. However, I have limited myself to only spending the cash we have, so if I budget X dollars to cover eating out, groceries, household goods, clothing, baby care, etc for the month, then I withdraw X dollars and nothing more. So, I may juggle the cash between the envelopes, but the bottom line in the bank account stays the same. So, in that regard, it's very good.

 

So, there's my "being there, doing that" story!

[coffeefreak]

We enrolled in FPU and are 3 weeks in. All I can say is TOTALLY WORTH IT!

 

We've been listening to Dave for 5 years, but never seem to be able to work it out. The accountability and support of the class is pivotal, and the software/online tools provided are phenomenal. My kids are "more" on board now than they were in the beginning, which has also helped. DH picked up an extra job that's guaranteed through April We're HOPING 3 major things will get paid off between now and then.

 

Kudos to you for getting started and good luck! Maybe we should start a support/accountability group like others have for weight loss and reading books!:bigear:

 

Blessings!

Dorinda

[coffeefreak]

I haven't had a credit card since the divorce, 11 years ago. I use my debit card and have never had a problem. I know that others have strong opinions about that (I've been around here long enough to know :001_smile:) but that's how I do it.

 

 

 

No, my Christmas list is for my mom and sister. They've asked how they can help. My Christmas is bare bones as usual. I've been single for 11 years - my kids know frugal very well. My debt is only my student loans and my mortgage. Unfortunately, my loans were on hardship deferral for several years after the divorce (as was the rest of my life), so interest really added up. I've been paying on them regularly for about 5 years now and the balance goes up every year. I have to get drastic. I owe a total of 60K between the two of them. Ugh.

 

Loving the stories - thank you!!

 

Isn't Christmas hard? My parents totally balked at our Christmas budget, but they've come around. As for Debit v/s Credit, we have been using our debit cards for everything too. We don't allow anyone to keep it on file though, and I think that makes a huge difference.

 

We paid off $30 000 in a little over a year.

 

 

DUDE! You're my new hero!:thumbup:

[FaithManor]

We are 3 yrs. 6 mo. away from debt free including the mortgage if we don't find a way to pay extra on the mortgage. Given that dh will probably have to take another paycut (10%) after the first of the year, I don't think we will be able to step up that time frame. But, I am happy to be seeing the end in sight.

 

Our problem was that we needed to move and get out of our old place but we had run out of money to finish the renovations here. Of course everything has to meet code and we needed an occupancy permit to get in this place so that meant borrowing a large sum of money to finish the place. We thought we would be able to pay that loan off with the proceeds of the sale of the other home which we put up for sale when we moved out but that was right at the beginning of the housing financial mess and we lost $50,000.00 in equity. We only broke even on the sale, or I guess we should say that after all was said and done, we walked away from closing with $115.00. So, in order to get rid of this loan, we had to renegotiate a lower interest rate and then start making rather HUGE payments. But, it is worth it and the weight off dh's shoulders will be huge when that last 2nd mortgage and 1st mortgage payments are made.

 

Probably the only scary thing is that right now we have very, very little in savings. Dh's pension from his previous company was "stolen" think Enron but on a much smaller scale and nothing has been recovered. He's only been with this company for five years and the market has been pretty much, awful, the whole time so his 401K is virtually worthless and my IRA has lost so much money that I wish we'd NEVER invested in it to begin with. So, I'm nervous about the lack of savings. But, we will be able to make some good investments once the debt is gone and so much money is freed up.

 

We didn't do Dave Ramsey...we've never read anything by him. We just made a plan and went for it.

 

Faith

[radiobrain]

Yes.

 

We have no mortgage, the house has been paid off for 9 or 10 years. How did we do that? Well, we bought a house that was affordable, not too big, not in a chi-chi neighborhood, and that was easy to pay off.

 

We have no car payments. We bought our cars new, almost 10 years apart and paid in cash. Now, we are needing to get another one someday, and am not sure how we will go about it. We'll see.

 

1 credit card paid off in full every month.

 

We don't buy anything that we can't pay for immediately. We don't get anything particularly extravagant. We don't get whole new wardrobes each season. I am creatively frugal. We don't update or remodel the house, except little DIY things here and there and an occasional larger expense every other year.

 

We do have savings.

 

My husband is self employed and usually we make next to nothing (according to the national poverty level) but somehow it seems to work fine. I have no idea what we would have in retirement, but maybe I'll get an inheritance or win the lottery. ;)

[Ginevra]

We have a car loan, but other than that, we are debt-free. Our "story" is not having gone from major debt to debt-free. We both idealize no debt and we both have acted toward that goal our whole adult life. The car loan we currently have is an anomaly; we decided to get a nice car before the market tanked and financed approximately half of it. (In hindsight, I wish we had paid in full, because the money in the account disappeared about two months later!)

 

Dh bought a lot to build on when he was in his early 20's. We built a house ourselves. Due to market growth, that house was sold for 5 times our building cost. That allowed us to buy and build our current lot and property with no mortgage.

 

Other than that, we pay off credit cards each month. We don't finance things.

 

Also, I agree with a lot of what Dave Ramsey says, but I do not agree with his view of credit cards. They are way more useful, lower liability and more convenient than debit cards. Paying in cash is not always the most feasible strategy and is not convenient for the major buyer in the family (me). The only people who possibly should not have a credit card would be those who simply don't discipline themselves and can't help but run up debt if they have the ability.

 

To the OP, there is an element in your OP that gives me pause. You talk about your intentions to reduce debt, yet immediately follow with what you want to own. It doesn't make a ton of sense to me. Thinking about what you want to own will not move you towards keeping more money, it will only engrain the desire to have the rice cooker and the water filter. I'm not saying those things are inherently bad, it's just that the mindset of a saver is to not focus on what you'd like to have.

[cmarango]

No. We won't have the mortgage paid off until 2013. Two years after that my dh will begin only part time work. What has worked for us:

 

1. Planning and running the numbers. Every quarter I give my dh an updated balance sheet. Every quarter I reassess how our investments are doing and if I need to rebalance our portfolios.

 

2. Live in a low cost of living area.

 

3. Understand that the people that have all of the newest and greatest things that you dream about fall into two camps: the majority are in way too much debt and the others have worked hard/sacrificed in the past to enjoy their purchases. The trick is to always be in the second group.

 

4. Have a weekend hobby that makes you money.

 

In the beginning it can be quite difficult to embrace this new mentality, but most habits only take about a month to become established. I have also enjoyed the blog http://www.thesimpledollar.com

[Outdoorsy Type]

We have a mortgage and a business to pay off. Our vehicles are paid off, and we don't have credit card debt.

 

I wish I had followed Dave more closely several years ago when we were doing even better financially. I wish we would have/could have bought a less expensive house with cash and could just pay down our business.

[Evergreen State Sue]

There is so much freedom in being debt free. My dh was given a layoff notice this year, and it wasn't nearly as scary for us had we still had our mortgage.

 

When we first were married we listened to Larry Burkett from Money Matters who advised paying off your mortgage. I didn't think it was possible, but once we made that as a goal, we paid off our 30 yr. mortgage in 5 years - three months before our first child was born. Without the house loan, we had freedom for me to quit my career and be a full time mommy.

 

We didn't have student loans, we have always paid off our credit card monthly, and we do without things like cable tv or a 2nd cell phone.

 

You can do it! Go for it!

[FloridaLisa]

We are debt-free except for our mortage. We live on one income. I gave up a really nice professional income 13 years ago to come home and we haven't looked back. We've made a lot of mistakes! Oy, it I could go back and have some financial do-overs. But, we've done some things right as well. Here are the major things that have helped:

 

* using the envelopes system. (Regularly recurring expenses are paid online). I begged my dh for this system. I like seeing how much I have to spend. Seeing that I only have $20 left in school supplies is much more motivating for me than seeing some online figure. I like taking anything we didn't use at the end of the month and putting it toward our current goal. There is no greater feeling than ending the month with a few dollars extra.

 

* we drive our cars a long time. Both my dh and I were driving 2001 cars with over 200,000 miles on them last month. Dh had a job perk that allowed him to buy a used 2010 truck.

 

* we buy used clothes (garage sale, consignment, Goodwill, hand-me-downs). Dh doesn't but he needs really nice dress clothes for work. The remaining 8 of us spend $200 or less on clothes, shoes per month.

 

* we homemade. I buy very few processed foods. Soups, beans and rice, meatless dishes, in-season and on sale fruits and veggies, and homemade breads, cookies and desserts make up the bulk of our food. No gummy snacks or little packs of chips.

 

* we pick and choose kids' activities and sports. We've capitalized on the many low cost activities for kids -- community sports leagues rather than joining the expensive travel teams and hiring an accomplished teenage piano teacher at $8/lesson over the $25/lesson adult teacher.

 

* we don't do expensive family entertainment. We cut our cable and used the library We almost never go to first run movies! We don't go to expensive concerts and tickets to sports events are special treats. We don't take expensive vacations, but we do go on two fun family vacations every year (condo at beach, cabin in mountains, Washington DC (everything you do there is free!), extended family visits, etc.) We rarely do Disney or Sea World, choosing instead to camp or take a day canoe trip. I'd much rather have a cookout with several family friends than spend that day at the mall.

 

* which leads me to this: don't hang out at places that cause you to spend! Don't go to the mall, or Home Depot or Walmart if it causes you to spend. Even if you don't spend, it can give you the wants. :tongue_smilie: Years ago, I stopped watching Home and Garden channel b/c it just made me want to change everything about my house instead of being content.

 

Kids are reluctantly on board. They understand, but aren't looking forward to it.

 

Well, when we worked on becoming debt free years ago, my dc were too young to notice. But even now, they understand that we just make different choices than some of their friends' families. We don't do every expensive church retreat or carry the latest technological gadget. BUT, we have tons of fun together. If my dc don't go to the church ski retreat, you can bet we'll have families over that weekend for fun or a big sleepover or a great day trip or . . . Living at your means in doesn't really mean doing without as it does doing it differently.

 

And finally, if you are super serious about getting "gazelle intense" as DR says, I'd highly recommend reading The Tightwad Gazette I, II and III. Get it from your library. The articles are outstanding and will help you change how you look at spending. You can get it from your library.

 

HTH,

Lisa

 

ETA: I was remiss in failing to note that tithing off the top has been vital to righting our finances. Almost at the same time that we became convicted to pay off our consumer debt, we became convicted of our obligation as Christ-followers to give 10% off the top. We'd been giving when we had extra. That one decision has been key, not only in putting our finances in perspective, but also in watching as God has provided beyond what we could have planned with paper and pen.

Edited October 28, 2010 by FloridaLisa
Key omission

[bookfiend]

No, my Christmas list is for my mom and sister. They've asked how they can help. My Christmas is bare bones as usual. I've been single for 11 years - my kids know frugal very well. My debt is only my student loans and my mortgage. Unfortunately, my loans were on hardship deferral for several years after the divorce (as was the rest of my life), so interest really added up. I've been paying on them regularly for about 5 years now and the balance goes up every year. I have to get drastic. I owe a total of 60K between the two of them. Ugh.

 

Loving the stories - thank you!!

 

 

My apologies for misunderstanding the situation. Kudos to you for looking to erase the debt that many default on. You can do it. We went debt free in '03 except for mortgage and car payments. We are on a 15 year home loan that we plan to pay off in 8yrs and finish one car loan by the end of this year.

[kalanamak]

 

Anyway, any tips, encouragement, BTDT stories - I'd love to hear them all!! Thanks -

 

-Anne

 

I currently have a mortgage until the old house sells, but I paid it off in 8 years.

No cell phone, no cable TV, almost no eating out, vegetarian food, no vacation except trips back to my elderly parents to visit and clean their house, worked overtime, shopped at Goodwill.

 

The only thing I do differently now is buy nicer clothes, visit other family (my parents died), and I do send my hubby and son on educational trips once or twice a year, but they drive and camp.

 

There is an old saying "it is not what you earn, but what you don't spend". Make a habit of making do without. Keep a list of what you need soon and keep an eye out at garage sales, etc. But, it is what you NEED.

 

P.S. I'd skip the rice cooker. I like them, but without a wad of money in the bank, I'd use a pot and a lid.

[MaryCatherine]

I find myself getting defensive because the rice cooker seems to be causing problems. I do have pans and water of course. The lids don't fit the pans since they've been dropped a million times so I use foil to make a tight seal. Which is fine. But I'm not purchasing a rice cooker - I'm asking for one for Christmas. My mother asked what I wanted and that was my answer. I don't feel like that's too much to ask. I've been single 11 years (you see their ages), I work, homeschool, have one in college, one almost in college, two out of braces, two about in braces, my parent's old age, my retirement, EVERYTHING completely on my own. I promise that I've done without for years. My house looks just like a garage sale vomited all into it. I have NOTHING to my name except for my 1999 Nissan Altima with 183K miles on it. The only vacations I've taken since I was a child living at home is driving four hours to visit my older sister for a few days.

 

My mother and sister asked how they can help. I asked for a rice cooker. I realize that I'm not active here, so y'all couldn't know much about me. But I promise I'm not materialistic and my priorities are straight.

 

This response sounds as if I'm angry - I'm really not. But I don't want y'all thinking wrong about me. I've been very excited planning all this out and honestly, the stories here are very encouraging. Thank you so much!

[Nestof3]

I think a rice cooker is a great idea. It's nice not to have to worry about rice, and you deserve the gift. :)

 

I would get one if I had room to store one. LOL It's like a crock pot. They are not necessary, but sometimes things are just nice to have.

 

I wish you the best on your debt-free journey.

 

Oh, and try to ask for something that is just for you as well. :)

 

I find myself getting defensive because the rice cooker seems to be causing problems. I do have pans and water of course. The lids don't fit the pans since they've been dropped a million times so I use foil to make a tight seal. Which is fine. But I'm not purchasing a rice cooker - I'm asking for one for Christmas. My mother asked what I wanted and that was my answer. I don't feel like that's too much to ask. I've been single 11 years (you see their ages), I work, homeschool, have one in college, one almost in college, two out of braces, two about in braces, my parent's old age, my retirement, EVERYTHING completely on my own. I promise that I've done without for years. My house looks just like a garage sale vomited all into it. I have NOTHING to my name except for my 1999 Nissan Altima with 183K miles on it. The only vacations I've taken since I was a child living at home is driving four hours to visit my older sister for a few days.

 

My mother and sister asked how they can help. I asked for a rice cooker. I realize that I'm not active here, so y'all couldn't know much about me. But I promise I'm not materialistic and my priorities are straight.

 

This response sounds as if I'm angry - I'm really not. But I don't want y'all thinking wrong about me. I've been very excited planning all this out and honestly, the stories here are very encouraging. Thank you so much!

[Amy loves Bud]

We are. I had a little credit card debt before we got married that I worked hard to pay off so I wouldn't bring the debt into the marriage, because Bud wasn't bringing in any debt either. We have not financed anything but our home in 17 years of marriage. We paid off our house about 2 years ago.

 

Bud's mom has NO credit score. She has never used a credit card. When she bought her first home with cash 7 years ago, it was actually an issue for the insurance people, lol! But in the end, she bought her first car and home and the accompanying insurances with cash at the age of 65 without ever having had a credit card or purchased anything on credit. She was a single mom who lived on a very modest income in a rent-controlled apartment outside Manhattan for most of her adult life, so it wasn't like she just had a lot of money.

 

My parents had a mortgage for most of their lives, but no other debt. They always paid cash for their cars and used credit cards for things they knew they had the money for. My dad was a retired Air Force pilot who flew for a small commuter airline. My mom stayed home. So not a ton of money there, either, but definitely more than Bud's mom.

 

We learned important financial lessons from our parents for which we will be forever grateful.

 

We use credit cards almost exclusively - Bud even charges his cokes at Race Trac for $1.04. We have paid every credit card bill in full every month since we got married. We just don't buy anything we don't have the money for, and that is what it really comes down to. We are fortunate that we have never been in dire circumstances, and I"m sure we'd finance food if it would get our children fed, but we haven't had to face that. Sometimes life deals a bad hand and there's not much you can do about it, but otherwise I think being debt-free is a very reasonable goal.

[kalanamak]

I promise that I've done without for years. My house looks just like a garage sale vomited all into it. I have NOTHING to my name except for my 1999 Nissan Altima with 183K miles on it. The only vacations I've taken since I was a child living at home is driving four hours to visit my older sister for a few days.

!

 

Then it sounds like you are doing all you can, and have done more than many. :grouphug:

[teresarussell]

Well, we are in the process of loading ourselves with debt for few years to come. Hope to survive this nasty beast.

[Guest littlemissy51]

I joined today just so I could reply to your message! We are not debt free by any means but we would like to be. I am trying to pay off my student loan right now. I pay all my bills online, some through my bank. I set up an automatic payment to come out of my account every Friday (either my husband or I get paid every Friday) for $50. It is automatic, so we don't even miss the money. I go ahead and make the monthly payment on time as usual. This way an extra $200 gets paid extra each month. I should have it paid off in around 2 years.

[Laura Corin]

We have a small mortgage on a property that we rent out (we used to live in it but moved away) and a large mortgage on our family home. My instinct is to pay the mortgages down, but interest rates are so low at the moment that it makes more financial sense to put money into the tax-relieved retirement savings vehicle that's available to husband through work. If the mortgage interest rates go up then we will switch our priorities. Long fixed-rate mortgages are more-or-less unavailable in the UK - we have one mortgage free-floating (long story - we can't get a fix) and one fixed for five years.

 

Just to say: we don't make being debt free a goal (although my gut reaction is to do so) but look instead at how our savings can be made to work.

 

Laura

[Catherine]

I KNOW the past 11 years must have been a challenge. Congratulations to you for making it all work. And now that you have a second child graduating, you are beginning to reap the fruits of your labor.

 

To answer your question, we have only mortgage debt. We refinanced from a 30 to a 15 year many years ago and I think we'll be paid off in 5 years. We both brought significant educational debt to our marriage-enough to buy a house in fact-and dedicated the first 5 years together to paying that off. When it was almost gone, we bought our house. Our big day came when we paid off that educational debt, and most of our lives have been financed with cash since then.

 

When our kids were small, we were extremely frugal, but to be honest, have been less so as they've gotten older, but our expenses have grown. I second a PP's recommendation for The Tightwad Gazette. I own it and my dog-eared copies are falling apart. But I also was raised by frugal parents who have never had debt. My father bought their 100 acre farm when he was 18, and his parents actually mortgaged their house and then rented it out and lived with him to lend him the $2800 he needed to buy the property. He had it paid off by the time I was born several years later. So I had excellent modeling, and dh did as well, in one parent at least.

 

The best example one can set for kids is to actually allow them to participate in the household economy, know what things cost, show them how to plan for big purchases or investments like college. My kids are all savers and my 17 yo, the kid closest to adulthood, has shown himself to be an accomplished saver and planner. He's worked the past two summers and saved more than 80% of his summer earnings both times. I am so proud of him!

 

Anyway, I'm wandering from the original topic but yes, living debt free, or mortgage-only, is possible. We have it far easier than you do, but even for single parents it's possible. I wonder if your kids can help out financially in small ways? Perhaps covering their own nonessential expenses with money they earn themselves?

[The Girls' Mom]

We are, although actively saving money isn't an option right now because of dh's school and the rent we are paying. We do have savings in the bank, but it is earmarked for buying a house when dh is out of school and we move (hopefully) back home.

 

I wish I could say it was through hard work and careful saving, but sadly it was due to an inheritance that we were able to pay off our mortgage. That WAS however, the only debt we had. We have always been rather careful about loans we've taken out and made sure to pay off any credit cards ASAP.

[Granny_Weatherwax]

We were, except for a mortgage, until three months ago when we bought a second car. Now we are scrambling to pay off the car loan. The good thing is we were able to refinance our house without changing the length of the loan and the difference we saved in the mortgage payment covers the car payment. We are hoping to have the car paid off in two years or less.

 

DR is a great program.

[CalicoKat]

Not yet, but we're working on it. DH read Dave Ramsey this summer and he put together our debt snow ball. So far we've paid off everything but the mortgage and now we're working on that.

[Ginevra]

My mother and sister asked how they can help. I asked for a rice cooker. I realize that I'm not active here, so y'all couldn't know much about me. But I promise I'm not materialistic and my priorities are straight.

 

This response sounds as if I'm angry - I'm really not. But I don't want y'all thinking wrong about me. I've been very excited planning all this out and honestly, the stories here are very encouraging. Thank you so much!

 

I understand. I totally don't mean to offend; it sounds like you've really had quite a challenging position for a while. It just seemed odd in your OP that you said you want to get out of debt and then you talked about some things that you want to have. I get that it's a Christmas wish. I'm sure I'd make a similar wish if I had any notion that my mom would get me a nice gift.