1Togo Posted May 9, 2011 Share Posted May 9, 2011 (edited) We attended a church where debt free meant no mortgage/no rent and no car payment. For those of you who have achieved this, how did you do it? P.S. Adding this. We will be moving, so renting is an option, but dh does not consider paying rent living debt-free. He says that we would just be paying mortgage and taxes for someone else. Edited May 9, 2011 by 1Togo Quote Link to comment Share on other sites More sharing options...
Guest momk2000 Posted May 9, 2011 Share Posted May 9, 2011 :bigear: I would love to know too. Quote Link to comment Share on other sites More sharing options...
KristinaBreece Posted May 9, 2011 Share Posted May 9, 2011 I guess paying no rent and no mortgage leaves you with only the option of buying your home for cash. If you can do that, then I think you might be my hero. I have to ask, though: How does your church play into this? Quote Link to comment Share on other sites More sharing options...
Susan in KY Posted May 9, 2011 Share Posted May 9, 2011 (edited) We attended a church where debt free meant no mortgage/no rent and no car payment. For those of you who have achieved this, how did you do it? I have to qualify this by stating that we are still renting, but getting close to buying. It has taken about ten years. We do it by being very frugal and also generous. It sounds like a paradox, but it isn't. We save so we can give it away intentionally and so that we can live well—not so that we can blow money where ever we feel like it. I carefully consider all purchases. We minimize stuff. We "don't buy if we can get by" with what we have. We ask each other about any purchase over $25. Whenever we want to eat out, we try to talk ourselves out of it or we go cheap. We try to eat out as little as possible, cook as freshly as possible, and only grab pre-packaged foods when we are in a spot where eating out is for convenience and the pre-packaged stuff (e.g., ravioli or some pre-seasoned meat) will save us a fast-food expense. We dry our clothes on the line. I treat my job as guardian of the finances very seriously. We make choices with the big picture in mind. We fund our savings deliberately. BTW, when I say living well, I mean quality of life and relationships, not quantity of stuff. Hope that helps. Edited May 9, 2011 by Susan in KY Quote Link to comment Share on other sites More sharing options...
ocelotmom Posted May 9, 2011 Share Posted May 9, 2011 (edited) As someone who doesn't attend one of these churches... It sounds like an excellent, practical goal to work towards, and emphasizes making frugal choices (saving to buy a less expensive used car with cash rather than taking out a loan to pay $20,000 for a new one, for example). It also strikes me as somewhere where those who start out better off financially can pat themselves on the back while looking down on those who can't afford to pay cash for a house and have no choice but to rent or pay a mortgage. Our society is simply not set up for people to pay cash for a house without either being wealthy to begin with or having spent years saving (while presumably living somewhere with rent or mortgage). Edited May 9, 2011 by ocelotmom Quote Link to comment Share on other sites More sharing options...
AvasMom Posted May 9, 2011 Share Posted May 9, 2011 We're working toward that goal. You just debt snowball until you get there if you have a mortgage or save to pay cash or save as big a down payment as you can and then work like crazy paying down the principal. If you are doing Dave Ramsey (just assuming here) then paying off the house is one of the last baby steps. Basically, if you aren't newly married and just starting out, it's probably going to take a lot of years and a lot of work. The good thing is that in this economy you can get your house for cheaper than at other times so it will take less time to pay it off. Quote Link to comment Share on other sites More sharing options...
CalicoKat Posted May 9, 2011 Share Posted May 9, 2011 my dh found a side-by-side comparison with renting vs. owning and difference was $7000 more for renting than owning. Sound Mind Investing did this report. Anyway it changed my dh's mind about owning and now we're looking at renting for a while once we get this millstone sold. Quote Link to comment Share on other sites More sharing options...
KristinaBreece Posted May 9, 2011 Share Posted May 9, 2011 As someone who doesn't attend one of these churches... It sounds like an excellent, practical goal to work towards, and emphasizes making frugal choices (saving to buy a less expensive used car with cash rather than taking out a loan to pay $20,000 for a new one, for example). It also strikes me as somewhere where those who start out better off financially can pat themselves on the back while looking down on those who simply can't afford to pay cash for a house and have no choice but to rent or pay a mortgage. Our society is simply not set up for people to pay cash for a house without either being wealthy to begin with or having spent years saving (while presumably living somewhere with rent or mortgage). That's the impression I got. Is the idea to live with your parents as a single person until you can afford to pay cash for a house? And what about college expenses? (Let's be realistic here-- most college students graduate with loans.) Quote Link to comment Share on other sites More sharing options...
1Togo Posted May 9, 2011 Author Share Posted May 9, 2011 We're not at the church that I mentioned, but when we were there, many families achieved debt-free living. I know how some of them accomplished that goal; i.e. driving old cars, great deals on a home, renting tiny apartments and saving cash for their first small home. While we have one old car, we do have a payment on a new vehicle, which we need. We also have a mortgage payment. We live frugally, but I've yet to figure out a why to get rid of those two payments. Quote Link to comment Share on other sites More sharing options...
Tammyla Posted May 9, 2011 Share Posted May 9, 2011 :lurk5::bigear: Quote Link to comment Share on other sites More sharing options...
KristinaBreece Posted May 9, 2011 Share Posted May 9, 2011 We're not at the church that I mentioned, but when we were there, many families achieved debt-free living. I know how some of them accomplished that goal; i.e. driving old cars, great deals on a home, renting tiny apartments and saving cash for their first small home. While we have one old car, we do have a payment on a new vehicle, which we need. We also have a mortgage payment. We live frugally, but I've yet to figure out a why to get rid of those two payments. I guess you: A: Don't buy anything you can't pay cash for. and B: Make the biggest payments you can afford, as often as you can afford, to pay them off as fast as you can afford. Quote Link to comment Share on other sites More sharing options...
Parrothead Posted May 9, 2011 Share Posted May 9, 2011 We're not at the church that I mentioned, but when we were there, many families achieved debt-free living. I know how some of them accomplished that goal; i.e. driving old cars, great deals on a home, renting tiny apartments and saving cash for their first small home. While we have one old car, we do have a payment on a new vehicle, which we need. We also have a mortgage payment. We live frugally, but I've yet to figure out a why to get rid of those two payments. Honestly I wouldn't worry too much about it. The vehicle will be paid for when it is paid for. Same with the house. On one hand I think it is great that people are given encouragement to be/become debt-free. On the other I really can't get past how/why family financial concerns are the business of anyone besides the spouses/life partners. Quote Link to comment Share on other sites More sharing options...
Mama Geek Posted May 9, 2011 Share Posted May 9, 2011 1. Live below your means 2. Increase your means as much as possible 3. Make some money on investments We are debt free and have been for 3 or 4 years. We were double income no kids, white collar workers. We purchased a house that we could pay for on 1 income and saw our income and purchasing power go down until it required both incomes to live. We went to where we could get premium money as contractors, we lived far below our means and paid off everything, we also put money in the bank. We came back and sold our house in a higher cost of living area and bought a house in a more depressed area. I am no longer working and we now have a dd, dh takes contract work that pays well and we enjoy our time off when he is without work. The downside is we never know when he will have work and when he won't have work or where the work will be. If you do what everybody else does, you will get the same results everybody else gets. Quote Link to comment Share on other sites More sharing options...
Mama Geek Posted May 9, 2011 Share Posted May 9, 2011 I can see why the church is interested in it. Money problems are at the root of a lot of divorces and it causes many other problems. As a community of Christians we try to help each other out as well as serve others. Quote Link to comment Share on other sites More sharing options...
bnbacademy Posted May 9, 2011 Share Posted May 9, 2011 We are completely debt-free, and worked toward it... gave up things for the goal of being debt-free, that is. We do not have the large house and acreage, we have a simple ranch house and 1 acre lawn. We live in our starter home and added on an addition for the 2nd dc instead of building a bigger home. We went on short vacations while we rented for 10 years. It is a LONG-term goal which requires here-and-now steps to get there. The best advice I can give is to live within your means and do not carry any credit card balance for more than 1 month. Quote Link to comment Share on other sites More sharing options...
Susan in KY Posted May 9, 2011 Share Posted May 9, 2011 Our society is simply not set up for people to pay cash for a house without either being wealthy to begin with or having spent years saving (while presumably living somewhere with rent or mortgage). :iagree:...and it has been a source of frustration for me while we have rented for the past decade. :tongue_smilie: I will not get on my soap box about the evils of a mortgaged society. Suffice it to say that the idea of "what can I afford every month?" makes people spend themselves into financial slavery. When I went shopping for a cell phone, I found out that I could put $140 on the table and walk out with a pay-as-you-go smartphone (an LG Optiva—good phone, great reviews) at $25/mo unlimited web and text, or I could pay upwards of $100/month for two years for virtually the same deal and get the phone for $1. Why would ANYONE do that? The difference over the two years is $1800 for the plan alone ($2400 vs. $600), and that 3G phone will be antiquated next year. It's crazy! Ooops. I guess I got up on my soap box anyway.... :D Susan (stepping down now) Quote Link to comment Share on other sites More sharing options...
Mimm Posted May 9, 2011 Share Posted May 9, 2011 It seems like it would make more sense to accept the mortgage and simply pay the highest payment you can each month to pay it down quickly rather than renting some place for the purpose of paying cash for a house. That way, you're not spending all that money on rent but instead all your housing budget is going toward housing. Quote Link to comment Share on other sites More sharing options...
Mejane Posted May 9, 2011 Share Posted May 9, 2011 It is a LONG-term goal which requires here-and-now steps to get there. Exactly. Many, if not most, people are not willing to sacrifice the short-term to get there. Quote Link to comment Share on other sites More sharing options...
Carpe Posted May 9, 2011 Share Posted May 9, 2011 We're debt free, though apparently not in your DH's eyes because we rent. But we live in a high cost of living area, we would need to make about 3 times what we currently do to be comfortable buying something essentially identical to what we currently live in. We have never been in debt. DH and I both bought junky cars as teenagers and then saved up for something better. I worked through college and his parents paid for his (lucky guy), so no student loans either. We're very slowly building up the savings to buy a house outright. Given real estate prices and how low our rent is, it makes much more sense to save the cash than to get a mortgage; our rent is less than the interest portion of the mortgage would be *shudder* that's not even including the maintenance and additional insurance costs of buying. Dave Ramsey is one of the big proponents of debt-free living. He has a video on his site (http://www.daveramsey.com/media/flash/elearning/drive-free/player.html) about buying cars. His site, daveramsey.com , is a wealth of information if anyone is interested. Quote Link to comment Share on other sites More sharing options...
Twilight Woods Posted May 9, 2011 Share Posted May 9, 2011 We were introduced to Dave Ramsey and his money philosophy in 2009. We like his principles and a lot of what he does makes sense. We are currently in the process of getting rid of our debt. It is a lifestyle change and we have definitely experienced some growing pains, but in the end it will be so worth it. Quote Link to comment Share on other sites More sharing options...
FairProspects Posted May 9, 2011 Share Posted May 9, 2011 I also have to say that this is easier to do in some parts of the country than in others. If this is your goal, you may need to consider a job change & a move if you live in a high COLA area to make it a reality. Having a high paying job with good benefits helps too. I would love to be debt-free like this and even though we are very frugal, we are paying far more for college and healthcare than I EVER was taught to budget on any worksheet, so I think age & macro-economics play a role as well. Quote Link to comment Share on other sites More sharing options...
edithcrawley Posted May 9, 2011 Share Posted May 9, 2011 Honestly I wouldn't worry too much about it. The vehicle will be paid for when it is paid for. Same with the house. :iagree: I was always told that car/house debt were "good debt" and that credit card debt was "bad debt". We were taught to look at the amount owed, see how much interest was due on that, and compare it to the amount that we could earn on the money if we put it in savings or in a Certificate of Deposit (CD) or something like that. Building a credit history by having a car loan and a mortgage is much more important IMHO than paying it all off with cash. Quote Link to comment Share on other sites More sharing options...
Scarlett Posted May 9, 2011 Share Posted May 9, 2011 :iagree: I was always told that car/house debt were "good debt" and that credit card debt was "bad debt". We were taught to look at the amount owed, see how much interest was due on that, and compare it to the amount that we could earn on the money if we put it in savings or in a Certificate of Deposit (CD) or something like that. Building a credit history by having a car loan and a mortgage is much more important IMHO than paying it all off with cash. You don't need a credit history if your goal is to live debt free. And a house is suppose to appreciate. That would make it 'good debt'. A car is not in that same category. Quote Link to comment Share on other sites More sharing options...
Desert Rat Posted May 9, 2011 Share Posted May 9, 2011 We haven't studied Dave Ramsey, but we follow similar principals. We are almost completely debt free. We are paying off our house now and have about 5.5 years left. I hope to have it done in 3. We are making double principal payments at this point. We paid off our van last year and have no credit card debt. The reason being debt free is so important for us is that I'm a bit shell shocked. Dh was laid off for 16 months. We never thought he would be laid off at all, let alone for so long. So, now, he's back to work. I still live every day terrified that he's going to lose his job. I'm working on that fear, but it's taking a long time to go away. It was just SO bad for so long. We made it out of that time with no debt. We were graciously given a bit of inheritance early. We lost a vehicle to a drunk driver during the layoff. That was bad, but it got rid of a car payment and the extra insurance. I've decided to keep working part time to pay off the house. We live within our means and don't vacation much. We look for free entertainment and pool resources with my parents-like a Netflix account and bulk items from Costco. I coupon and shop sales. We buy second hand when we can and we never buy anything (other than food) that's not on sale. Dh and I don't exchange gifts and keep parties simple. I never buy books and only use the library. We conserve utilities when possible and crush cans to recycle for cash. I ebay old toys and collectibles. I have also ebayed for others and take a percentage. The little things add up into big things. Quote Link to comment Share on other sites More sharing options...
Lawana Posted May 9, 2011 Share Posted May 9, 2011 I don't think we could ever have had a house without taking on a mortgage. What we did do is take out a 15 year mortgage instead of a 30 year, buy a house well below our means, and pay off the mortgage early. We drive old cars that we pay cash for. We dream of living on 20-30 acres, but that is not going to realistically happen. Also, we're old, so have had many years to get where we are, and dh makes a good living.;) Quote Link to comment Share on other sites More sharing options...
creativish Posted May 9, 2011 Share Posted May 9, 2011 Sigh, DH dreams of farming full time. No chance at being debt-free for decades. Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted May 9, 2011 Share Posted May 9, 2011 My sister and her husband did it by buying a mobile home with cash savings when my niece was almost 2 and they were pregnant with their second. Then just being committed to cash only, remodeling only what they had the cash to do, etc. -- and mostly managed it even after the third ended up with a 6-week NICU stay (which left them with medical debt that they immediately tackled and cleared up) (And they are not independently wealthy. My sister has always been a SAHM who tries to find things to do on the side. Her husband has worked low wage jobs.) When you are living debt free, you can live on much less and otherwise overwhelming bills can be more manageable. My husband and I are not there, yet. But we are trying to make choices to help us get there and have already seen fruits from those choices even without being at "goal line" yet. Quote Link to comment Share on other sites More sharing options...
melissel Posted May 9, 2011 Share Posted May 9, 2011 Lots of good advice here. I'm in the "no debt is good debt" camp myself. However, I think priorities play a major role, as does where you live. We could pay our mortgage off much more quickly if I went back to work, but I'm not willing to do that. Being home is my priority. Also, the kids are only home with us for the next 9-12 years. We could kill ourselves and divert every penny to living mortgage-free, but there are some things I won't give up for that goal--the kid's activities, field trips, zoo/aquarium membership, natural/organic food, and what little travel we can afford are important to all of us. We do live within our means, we have no other debt anymore, and we refinanced our mortgage with the intent of paying the difference each month as a prepayment. Of course, then DH figured out that he was going to make $12K less this year than he had originally projected (:banghead:), so that $400 a month had to go back into the monthly pot. IMO, if you're just starting out and have no kids or very young kids, you'd be extremely wise to have this mindset. I really, REALLY wish I'd had it then. Our lives would be completely different now :( But if you're already older, have kids, have a house (especially in this market, where selling probably makes little sense), etc., then yes, I agree that then it becomes a long-term goal, with snowballing payments and serious belt-tightening. But I really think you have to have a balance between debt-freedom and the rest of your life. Quote Link to comment Share on other sites More sharing options...
Carpe Posted May 9, 2011 Share Posted May 9, 2011 One could argue that a mortgage and student loans are good debt. One cannot make the same argument for a car loan. Your home is worth the same or more than you paid for it, or at the very least is worth more than what you paid for it minus what renting a similar home would have cost. So you would essentially break even on that transaction. Arguably. It's not true in my area currently and has not been for the last decade at least. Your car on the other hand is as bad as credit card debt. Cars depreciate rapidly, particularly new cars. So you're losing the value that the car is decreasing as well as the cost of the loan. When you're done with your car it should be essentially worthless, just like the things you bought with the credit card. Education is, for the most part, an appreciating asset. One could get hundreds of thousands in student loans to get a useless degree from a big name school. But that would really be the only way to make student loans a bad deal. Basically if your purchasing something that appreciates, borrowing to do so would be, arguably, "good" debt. If you're purchasing something depreciating, or disposible, borrowing to do so is "bad" debt. Quote Link to comment Share on other sites More sharing options...
Scarlett Posted May 9, 2011 Share Posted May 9, 2011 What we did do is take out a 15 year mortgage instead of a 30 year, buy a house well below our means, and pay off the mortgage early. We drive old cars that we pay cash for. My XH is an idiot, but this is one thing he and I agreed on. We were bullied into financing our first house for 30....we were in our early 20s and scared they would not give us the loan...5 years later we refinanced for 15 at a much lower rate and by the time 10 more years had passed we had $50K to put on a bigger house in a nicer area. Whenever people tell me that can't afford a 15 year payment.....I encourage them to buy less of a house. Only in a few situations, a few very poor friends, is there NO house cheap enough that they can afford a 15 year note. Quote Link to comment Share on other sites More sharing options...
Desert Rat Posted May 9, 2011 Share Posted May 9, 2011 :iagree: A 15 year motgage was a key for us, too. We financed at a 30, then were able to finance 4 years in and keep the same payments but with half the loan time. Our interest rate dropped by 3% (WOW!) and we were able to do away with the PMI. Quote Link to comment Share on other sites More sharing options...
melissel Posted May 9, 2011 Share Posted May 9, 2011 :iagree: A 15 year motgage was a key for us, too. We financed at a 30, then were able to finance 4 years in and keep the same payments but with half the loan time. Our interest rate dropped by 3% (WOW!) and we were able to do away with the PMI. Ugh, I wanted so badly to refinance for a 15-year when we did it, but it would have been an extra $350 a month for us, and we just weren't sure we could swing it because I'd quit my job. Then DH discovered the miscalculation in our income for the year and we were glad we didn't do it...but it still frustrates me to have that 30-year hanging over us! Thankfully the rates weren't that different (maybe a 1.25% difference, I think?), so we hope to begin prepaying as soon as we're back on our feet! Quote Link to comment Share on other sites More sharing options...
MindyD Posted May 9, 2011 Share Posted May 9, 2011 I've never heard of rent being counted as debt. I guess I see it the same as paying for a service (phone, electricity, etc.). We still have the freedom to move if we want. We're working to become debt free. We sold our house because we needed to relocate for dh's new job. The student loan will take the longest to get rid of, but it is what it is. We're not working wiht "gazelle intensity" as Dave Ramsey would say, but we are working towards it. Everytime we pay off a debt, I feel a little lighter on the inside. I don't mind the debt if rent is considered debt though. We are not ready to buy a house and won't be until we're where we want to be forever. We'll be renting for a long time I expect, but I'm okay with that. I like having the freedom to be able to move if we need to. I just don't see owning a house as the huge accomplishment I used to. And after all the money and time spent on upkeep for a house, I'm not convinced it's financially the best decision for most people anyway. Hmm, somehow I climbed on my own little soapbox without realizing it. I'll just be quiet now. :) Quote Link to comment Share on other sites More sharing options...
elfgivas Posted May 9, 2011 Share Posted May 9, 2011 we are debt-free. but we're old, too ;) so how you get there depends on where you are now. when we first got married, we had a car payment and a mortgage. but we both paid off our credit card every month. so first we doubled up on the car payments until it was done. then we kept putting that same amount of money aside so we could buy the next car when we needed it. then, we worked on the mortgage. first, we paid every two weeks, instead of once a month, which gave us an extra two payments a year. (i think that's how it worked). then, we went no television, no cable, no eating out and saved enough to pay back the principal once a year. then, we also had dh taxed as single, so we got a large payment back each april. now dave ramsey et al says not to do this, BUT for us it worked because we never saw the money. we would not have saved all of it if we had tried. some, but not all. that went against the principal, too. we went cash only for two years, so we wouldnt' be tempted to carry a balance. amongst all of this, we had four kids. we incorporated service as part of gifts. so for valentine's day, the girls would detail dh's car and put red and pink balloons in it. balloons aren't that expensive, it saved us the cost of detailing the car, and it was an act of love. etc. etc. i may never have a smart phone (well, it feels like that), and we only buy a car for the amount we have saved. i've had power windows and locks only once. then, once we were debt free, dh took a second job to put oldest dd thru university. and we saved up money and put in solar panels to defray energy costs. and turned down the thermostat. the cool thing about not watching tv is that commercials don't make us want things, so gift giving is much more fun, and less expensive. and we developed a lifestyle where we enjoy doing things outdoors, like camping and hiking and bike riding..... things that don't cost a lot but that we love to do. debt-free is a good goal, but its a one step at a time thing. if you're just starting out, buying a cheap car that gets good mileage, and buying a small house with a short commute distance are two things you can do that will help you a lot. it is hard to buy a house for cash; but minimizing the mortgage time helps a lot. good luck! ann Quote Link to comment Share on other sites More sharing options...
BabyBre Posted May 9, 2011 Share Posted May 9, 2011 We're "debt free" with the exception of our mortgage. Dh has always had awesome financial sense, so we've never been in over our heads. Every debt we've incurred has been deliberate, calculated, and the payments worked out to a specific number of years. For example, when dh needed a new car, he managed to find a loan with no interest for the first 5 years, and simply calculated what the payment would be if he were to pay if off in 5 years, thereby paying no interest. So he payed FAR more than the required payment each month but got the car for much less money in the long run. On the house, we initially took out a 30-year loan, but refinanced asap when the interest rates were low to a 15-year. Our payment only went up slightly because of the difference in the interest rate, but we'll be out from under it in half the time. On my student loan, he paid extra as often as possible. In paying down bills, his general rule is to work on the highest interest loans first, pay those off and move on to the next highest. We lived FAR below our means (much to my dismay when the suburban princess first got married!) until we finally got the student loan and the car payed off. With only the house left, we've loosened up a bit as dh makes more money now too, but still live below our means. Those three loans are the only ones we've ever had, including credit card debt. If we can't pay it down that month, we don't charge it. Dh is an obsessive saver with accounts set up specifically for vacation, household repairs, auto repairs/replacement, orthodontics, etc. He pays bills first, then pays savings as if it were a bill. I don't get the breakdown every month, but he generally tells me he saves about 50% of his paycheck. That's how we stay out of debt. Quote Link to comment Share on other sites More sharing options...
FairProspects Posted May 9, 2011 Share Posted May 9, 2011 Whenever people tell me that can't afford a 15 year payment.....I encourage them to buy less of a house. Only in a few situations, a few very poor friends, is there NO house cheap enough that they can afford a 15 year note. Before the crash, there wasn't even a condo in our area we could afford with a 15-year mortgage and we were making good money. Now, there probably is, but it doesn't make financial sense to move. This is highly variable by area and cost-of-living. Quote Link to comment Share on other sites More sharing options...
Random Posted May 9, 2011 Share Posted May 9, 2011 When I went shopping for a cell phone, I found out that I could put $140 on the table and walk out with a pay-as-you-go smartphone (an LG Optiva—good phone, great reviews) at $25/mo unlimited web and text, or I could pay upwards of $100/month for two years for virtually the same deal and get the phone for $1. Why would ANYONE do that? The difference over the two years is $1800 for the plan alone ($2400 vs. $600), and that 3G phone will be antiquated next year. It's crazy! (stepping down now) I think this is an excellent example of how our society as a whole (not necessarily these board members as a whole) operates financially. We do the same thing with our cell phone. But, we sacrifice having the 'latest and greatest' cell phones. It's a trade-off. With regard to being debt-free, including a mortgage, I think one of the best careers for a man is carpentry. My husband built our home, and we paid cash for materials as we went along. We paid for almost no labor costs and of course, we didn't have to hire a contractor. We ended up with a $50k mortgage on a $500k house. We will have it paid off in about 5 years, 10 years after moving in. I really pushed to build a smaller house and have no mortgage, but dh insisted we go bigger. Now that we have four kids, I'm glad he won out. ;) However, I don't consider rent to be debt. These days, with falling house values, in some cases it is much better to rent. The other debt-reduction ideas are excellent. Do the math on every purchase and think outside the box. So many times, it really is the little things that make the difference. Unless you are going to medical school, I think it's possible to graduate from college debt-free. Like all the other stuff, it requires more of a sacrifice than most are willing to give. It just depends on what is more important to you. Quote Link to comment Share on other sites More sharing options...
Ginevra Posted May 9, 2011 Share Posted May 9, 2011 I think this is an excellent example of how our society as a whole (not necessarily these board members as a whole) operates financially. We do the same thing with our cell phone. But, we sacrifice having the 'latest and greatest' cell phones. It's a trade-off. With regard to being debt-free, including a mortgage, I think one of the best careers for a man is carpentry. My husband built our home, and we paid cash for materials as we went along. We paid for almost no labor costs and of course, we didn't have to hire a contractor. We ended up with a $50k mortgage on a $500k house. We will have it paid off in about 5 years, 10 years after moving in. I really pushed to build a smaller house and have no mortgage, but dh insisted we go bigger. Now that we have four kids, I'm glad he won out. ;) :iagree: This is very similar to what we did. Dh is a plumbing contractor, but is very knowledgeable about all trades. He was able to build out first house very inexpensively, materials only, sweat and tears for labor. Then the housing values went up (did they ever) and that allowed us to sell that house for 5 times our small mortgage. Because of this, we were able to build out current house at cost with no mortgage. I hope my children have a goal to be debt-free, but I also am not against taking a mortgage in order to have a place to live. Rent tends to be a money pit; I'd rather own a tiny house than rent a nice townhome. Quote Link to comment Share on other sites More sharing options...
Swirl Posted May 9, 2011 Share Posted May 9, 2011 (edited) my dh found a side-by-side comparison with renting vs. owning and difference was $7000 more for renting than owning. Sound Mind Investing did this report. Anyway it changed my dh's mind about owning and now we're looking at renting for a while once we get this millstone sold. I'm having trouble understanding. :confused: Why does he want to rent if it costs $7000 more for renting? Edited May 9, 2011 by Swirl Quote Link to comment Share on other sites More sharing options...
FairProspects Posted May 9, 2011 Share Posted May 9, 2011 Unless you are going to medical school, I think it's possible to graduate from college debt-free. Like all the other stuff, it requires more of a sacrifice than most are willing to give. It just depends on what is more important to you. I think it *might* be possible to graduate from undergrad debt-free, depending on your living situation & how much you are able and willing to work. But if your career requires a graduate degree and you don't have an employer that will pay for it, it is pretty darn impossible currently. Dh worked full-time during graduate school and it didn't come close to what we had to pay. This was also with me working part-time and paying for half of our expenses. College has just gotten crazy expensive. The real problem IMO is that jobs are requiring higher and higher levels of expensive education. Just two generations ago, my grandfather worked for a Wall Street bank without a college degree. Dh's grandmother was a Deputy County Treasurer without a single college class. You wouldn't even be able to get an interview without a degree today. But that is a societal problem that I don't think will change anytime soon. Quote Link to comment Share on other sites More sharing options...
Shellydon Posted May 9, 2011 Share Posted May 9, 2011 We are totally debt free. We took a class (Ron Blue) at our church while we we very poor college students which helped set our perspective for the last 18 years. First, we both got degrees in something that produces an actual job that allows the degree holder to make a living. We also got graduate degrees in our fields. We paid for school ourselves, taking the minimum amount of loans possible and working all through school. When we finished, we used one of our salaries to pay off our student loans ($40,000 total for both of us) as quickly as possible. We did purchase a house at that time, but kept our beater college vehicles until the loans were paid in full. We also paid as much extra on our house as possible each month and I worked overtime at every opportunity. Once we had children, our total salary was cut in half, but since I was a SAHM, DH was able to go above and beyond at work and God blessed him with a better position and higher pay. We continued to live frugally and paid huge chunks on our house whenever possible. We also put back the maximum for retirement accounts. My hubby hates debt with a passion and will do just about anything to stay out of debt. Quote Link to comment Share on other sites More sharing options...
Scarlett Posted May 9, 2011 Share Posted May 9, 2011 Before the crash, there wasn't even a condo in our area we could afford with a 15-year mortgage and we were making good money. Now, there probably is, but it doesn't make financial sense to move. This is highly variable by area and cost-of-living. Maybe. I still think the marjority of people are just living above their means. I realize some very urban areas would only have affordable housing in dangerous neighborhoods or with long commutes. Quote Link to comment Share on other sites More sharing options...
wy_kid_wrangler04 Posted May 9, 2011 Share Posted May 9, 2011 I have not read any of the pages beyond the first page but.... We just went through Dave Ramseys Financial Peace university. We are just following his recommendations and it will happen for us, Lord willing within 10 years. Get an emergency fund set up. He recommends $1,000 but we are going to do $2,500 (we have alot of emergencies LOL) Then just start snowballing your debt. Start by paying off the smallest then add that payment into the next smallest. You need a solid monthly budget, and ANY extra money (after giving your self a reasonable amount for everything including entertainment) is thrown onto the smallest debt. We are knocking out medical bills at the moment. Once those are knocked out, all the money we use on those will be added to getting our Durango paid off. Once we get that knocked out we attack our house. BTW, if you have a mortgage and pay daily interest (most do) you will get your house paid off much sooner by paying 1/2 every 2 weeks than once a month because you are lowering the amount of interest you pay. It adds up big time! Its just about training yourself to live within a reasonable (but not extravagant) budget monthly so that when you are debt free you can live a lifestyle that you want. Vacations you always dreamed of, helping other people (which his huge to dh and I) or whatever it may be thats important to you. You will own your money then and not your mortgage company, or your bank or credit card holders. Also, CUT UP CREDIT CARDS!!!! We do not have any nor will we ever since going through this. Its awesome the freedom you have even paying off some smaller bills!! We have paid off several and it feels wonderful. I can NOT wait to be 100% debt free :D We are going on vacation to Ireland when we are!!!!!!!! (our reward, all the money we used to pay out a month will be our trip money, maybe 3-4 months worth of saving for it :D) I can't wait!! Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted May 9, 2011 Share Posted May 9, 2011 I think it *might* be possible to graduate from undergrad debt-free, depending on your living situation & how much you are able and willing to work. But if your career requires a graduate degree and you don't have an employer that will pay for it, it is pretty darn impossible currently. Dh worked full-time during graduate school and it didn't come close to what we had to pay. This was also with me working part-time and paying for half of our expenses. College has just gotten crazy expensive. My husband is currently finishing up his Masters' degree -- debt free. So it is possible -- depending on the degree and the college you go to. Quote Link to comment Share on other sites More sharing options...
1Togo Posted May 9, 2011 Author Share Posted May 9, 2011 I am glad that I started this thread, but still don't have an answer except to start adding on to the car payment to get that paid off. We don't have credit card debt and haven't for years. We don't have cable, Netflix, or expensive cell phone/plans. Dd's ballet is an extra, and we could drop that, but it's her main activity with a group of nice girls. We rarely eat out or vacation. We don't spend a lot on clothes. I consolidate errand trips, hang clothes, and cook from scratch. I am sure I can find ways to trim the budget, but we live frugally. I see debt-free living as a goal because getting rid of our two payments (or even one of them) would give us money for travelling and a few extras. In addition, we tithe but would like to give to other organizations. I was expecially interested in the posts by renters. We will be moving next year, so we have the option of renting or buying. Quote Link to comment Share on other sites More sharing options...
Twilight Woods Posted May 9, 2011 Share Posted May 9, 2011 Did you buy the home kit or did you go through your church? I really want to do FPU I am having a hard time justifying spending the money for the DVD kit. I have not read any of the pages beyond the first page but.... We just went through Dave Ramseys Financial Peace university. We are just following his recommendations and it will happen for us, Lord willing within 10 years. Get an emergency fund set up. He recommends $1,000 but we are going to do $2,500 (we have alot of emergencies LOL) Then just start snowballing your debt. Start by paying off the smallest then add that payment into the next smallest. You need a solid monthly budget, and ANY extra money (after giving your self a reasonable amount for everything including entertainment) is thrown onto the smallest debt. We are knocking out medical bills at the moment. Once those are knocked out, all the money we use on those will be added to getting our Durango paid off. Once we get that knocked out we attack our house. BTW, if you have a mortgage and pay daily interest (most do) you will get your house paid off much sooner by paying 1/2 every 2 weeks than once a month because you are lowering the amount of interest you pay. It adds up big time! Its just about training yourself to live within a reasonable (but not extravagant) budget monthly so that when you are debt free you can live a lifestyle that you want. Vacations you always dreamed of, helping other people (which his huge to dh and I) or whatever it may be thats important to you. You will own your money then and not your mortgage company, or your bank or credit card holders. Also, CUT UP CREDIT CARDS!!!! We do not have any nor will we ever since going through this. Its awesome the freedom you have even paying off some smaller bills!! We have paid off several and it feels wonderful. I can NOT wait to be 100% debt free :D We are going on vacation to Ireland when we are!!!!!!!! (our reward, all the money we used to pay out a month will be our trip money, maybe 3-4 months worth of saving for it :D) I can't wait!! Quote Link to comment Share on other sites More sharing options...
melissel Posted May 9, 2011 Share Posted May 9, 2011 We are knocking out medical bills at the moment. Once those are knocked out, all the money we use on those will be added to getting our Durango paid off. Once we get that knocked out we attack our house. Don't forget about baby step #3 though--3-6 months' savings. Thank goodness we had that this past year or we'd have been in trouble. It was the first time in my 36 years that I had any savings to speak of :blushing: Quote Link to comment Share on other sites More sharing options...
Susan in KY Posted May 9, 2011 Share Posted May 9, 2011 My husband is currently finishing up his Masters' degree -- debt free. So it is possible -- depending on the degree and the college you go to. :iagree: I did the same thing. Quote Link to comment Share on other sites More sharing options...
Shellydon Posted May 9, 2011 Share Posted May 9, 2011 Did you buy the home kit or did you go through your church? I really want to do FPU I am having a hard time justifying spending the money for the DVD kit. Is there a nearby church offering the class? Our church offers it several times a year and provides partial and full scholarships -- perhaps you could do that if it is available. Quote Link to comment Share on other sites More sharing options...
wy_kid_wrangler04 Posted May 9, 2011 Share Posted May 9, 2011 Did you buy the home kit or did you go through your church? I really want to do FPU I am having a hard time justifying spending the money for the DVD kit. We did the class at our church. When you do that, in the kit you get the workbook, Dave Ramseys book and the whole class on CD so you can listen to it whenever and where ever. I highly recommend it. We at that time had to save to afford to go but trust me its worth it! Dh was unemployed at the time. Dh got a "just making ends meat" job during the class and was just promoted last week (about double the pay or alittle better during the busy season of summer ;)) so we are on fire to get this debt outta here!!!!!! :D Quote Link to comment Share on other sites More sharing options...
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