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No debt families- share your successes! - Page 4

post #61 of 94
I was born to a white family that was constantly in financial trouble and borrowing money from one relative or another. If I went to school, I had to pay for it myself, buy my own car, insure it, maintain it, and pay rent at home. I did not want to be like my parents; when my older relatives died, my parents turned to me for money.

I graduated from college one day, married the next day, with no debts. We both worked very hard, saved, bought a house and then another house, saved, worked, had children and hopefully instilled in them the same values.

I am in the black. I own my home and another that I rent out for income. I have always managed my own properties. I own three cars. I have no health insurance, but I eat frugally, lots of fresh fruits, vegetables, exercise and keep healthy; take responsibility for my own health. Eat out once a week. I sew and swap clothes for myself and my children or I buy for quality. DH and I bought quality furniture and cared for it. I cut my own hair and the boys cut each others hair. I never had a student loan. I Do regular maintenance on the houses and cars myself. Homeschool. Borrow books from the library. Bicycle if possible. Dry the clothes on the clothes line in the summer. Rent movies from the library. No cable television. ONE credit card only for emergencies and for travel when cash is not a good idea.

I never put more on the credit card than can be paid off within thirty days.

There have been times in my life when I worked two full time jobs. I am tired, but grateful that I still have my health and that things have worked out so that I can enjoy what I have worked so hard for.

Editted to add: I also had huge bills from my DH's illness that I paid off ... all of this and a little luck...
post #62 of 94
I'm guessing it's not that common to be debt free. I got a call from somewhere yesterday, no idea who as DS answered the phone and the first thing the guy asked was "Do you have a Visa or Mastercard?" Yes. " Do you owe at least $5000 on those cards?" No. "Do you have any debt?" No. "What??? No debt at all?" Uh, no, we don't owe anyone anything. "Really?" That's right, we have-no-debt. "Wow, uh, ok, thanks. Bye." Click.

I had a good laugh at that. I told DS when he asked that they wanted our money so he went and hid our piggy banks . We later had a talk about what I really meant
post #63 of 94
Quote:
Originally Posted by bwylde View Post
I'm guessing it's not that common to be debt free. I got a call from somewhere yesterday, no idea who as DS answered the phone and the first thing the guy asked was "Do you have a Visa or Mastercard?" Yes. " Do you owe at least $5000 on those cards?" No. "Do you have any debt?" No. "What??? No debt at all?" Uh, no, we don't owe anyone anything. "Really?" That's right, we have-no-debt. "Wow, uh, ok, thanks. Bye." Click.

I had a good laugh at that. I told DS when he asked that they wanted our money so he went and hid our piggy banks . We later had a talk about what I really meant
Yeah, our real estate agent was *shocked* that we have no debt. She said something about not opening a Sears card to buy the appliances until after we close, but we could do so right after we closed, and I explained that we would be paying cash for the appliances that we had set aside for that purpose...that is how the no debt thing came up because she phrased it like "don't add to your debt" and I am like, debt? What debt? If we could not afford new appliances, I would get them off craigslist for free or very cheap before I opened a Sears account.
post #64 of 94
Quote:
Originally Posted by onandon View Post
Velochic--I always read your posts and think you're very valuable and motivating on this board. I don't want to cause a stir, but why are choosing to value your net worth so much? What are you trying to achieve other than the balances? I wouldn't be able to make decisions and compromises just based on the bottom line without knowing what it got me and when.
Thanks.
The higher your net worth, the more freedom you have financially. For example, I can pay off my house if I need to. I don't, as I've said before. But I can if I want. That is a very liberating feeling. And yes, I do care about the balance. I care about how much money I have to spend when there is no longer any income (retirement). Too many people focus on whether or not they can make the MONTHLY payments on things. They don't realize that in the long run, this can cost them much more than they really think.

Take for example leasing a car vs. purchasing a used car. The monthly payments on a lease might be lower (and a lot of people lease flashy cars so that people think they are better off than they really are). However, leasing reduces your net worth. If you purchase a used car, even if you make payments and they might be slightly higher each month, you will have a vehicle to drive for many years and in the end, you have spent less money. That means there is more money, in the end, that goes toward my taxable or retirement savings, thus increasing my net worth.

So, in a nutshell, by thinking about how things affect your net worth, you are building a more secure nest egg for your future, including retirement. Do you realize how many people are either barely scraping by in retirement or have to take part-time (or even full-time) jobs in retirement because they only looked at monthly payments instead of net worth? It's actually the majority of baby-boomers.
post #65 of 94
Oh, and my mother is one of these people. Her health was deteriorating rapidly because she had to work at a job where she had to stand all day. She could not live off of social security alone, and she had no money saved for retirement. We had to take her in so she could quit her job. Her health has improved drastically, but she cannot afford to live alone. I will never burden my daughter like this. I love my mom and we get along okay, but we have no privacy, I have to cook meals specifically for her, she makes no financial contributions, I have to clean up after her, she often treats me like I'm still 14 and having her here is a hardship in many, many ways. Instead of burdening our dd, we want to be able to leave her better off than we were when we were young adults.
post #66 of 94
I'm with you completely on the retirement planning and learning from my parents. My mom's entire retirement plan was to marry a guy with one. It worked, and she's happy and honestly in love, but on some level she lost a little respect from me. My dad on the other hand lives very frugally and may even have a paid off house and certainly no debt, but he doesn't have health care he needs or savings for long term. My grandmother lives month to month on her social security check. DH and I have been saving for retirement since we were in our early 20s. We're now 30 and 31. Even if he only works for the next 5 years at this type of work we'll have enough to traditionally retire comfortably (though not in this area which is fine with us) when we're 59 1/2 and can start using the 403(b) money and IRA money. In the meantime we expect to take a few years to sail while not earning money and then look for new types of work after that. He doesn't want a job with a desk again.

We're not committed to leaving money to our children when we die, but we are committed to not being a burden!
post #67 of 94
Thread Starter 
Quote:
Originally Posted by onandon View Post
We're not committed to leaving money to our children when we die, but we are committed to not being a burden!
ITA 100%!! I also hope both sets of parents feel this way but my oldest brother is special needs so they have a trust set up.
post #68 of 94
Quote:
Originally Posted by velochic View Post
Oh, and my mother is one of these people. Her health was deteriorating rapidly because she had to work at a job where she had to stand all day. She could not live off of social security alone, and she had no money saved for retirement. We had to take her in so she could quit her job. Her health has improved drastically, but she cannot afford to live alone. I will never burden my daughter like this. I love my mom and we get along okay, but we have no privacy, I have to cook meals specifically for her, she makes no financial contributions, I have to clean up after her, she often treats me like I'm still 14 and having her here is a hardship in many, many ways. Instead of burdening our dd, we want to be able to leave her better off than we were when we were young adults.
My father is basically in the same situation. They only thing that has enabled him to live alone (he used to live with us) is that he lucked out and got into low-income housing for seniors. He lives in a nice building in a nice area with other seniors and pays $137 a month for a 1 bedroom apartment. Even with that, his SS leaves him no wiggle room. If something changes and affects the budget for the agencies that provide his housing, he will have to live with us again.
post #69 of 94
i've just got to sub. you all are inspirational!

sarah
post #70 of 94
We are debt free right now. With any luck, we won't be in a week when we should close on this house.

We weren't always debt free. We screwed up big time before we got here. I accumulated close to $10,000 in CC debt in less than 3 years. And I refused to admit I had a problem until I was trying to buy some towels and all 4 of my cards declined for being overlimit. That was the point that broke me.

The toughest part was that I was spending $300-500 MORE than my monthly income. And to go from that to paying down the cards, meant I had to adjust my spending by about $600-800/month. (Because I had to stop spending the excess, and then find the money for payments, too.)
I did that for a while, then enrolled in credit counseling. After about a year in that, we were still struggling under 2 cars that we could not afford. I sold one, and my DH was in an accident, totalling the other. We spent seven months with no vehicle at all, then we got an opportunity to refinance our house. Even though my credit was low 500s, we found a lender who would refinance us.
We pulled out enough money to pay off the CCs completely, and to catch up on all our bills, and to buy a cheap car for cash.

And after that, we had figured things out. Beyond that point, we didn't buy ANYTHING on credit. We couldn't, actually, because I didn't have a credit card after that until this February. We only bought things that we had the money for, and we kept track so we could keep up on our bills.


I did use a CC this last month, when my DH got a job offer out of state in Feb and we had to sell our house and move. We used up our savings improving our house to sell it, so I put our moving expenses on the CC (actually on 3 of them). As soon as the house closed, I paid them off completely. IMO, this was a sensible use of the cards.


We don't make a lot of money, in fact this will be our best year in about 4 years and we'll still be under the EIC cap. Ironically, we live better now than we did back when we made MORE money AND were racking up CC debt. We have made some large purchases recently, as we moved with nearly no furniture, but we researched, set a budget, and stuck to it. And spent cash.
post #71 of 94
We aren't there yet but we are on our way. We've gone from being heavily in debt and not being able to afford our mortgage to getting out of massive credit card debt and paying off a car loan (though we did sell that one and got a new car loan).

The only debt we currently have is our car loan, the ccards are so minimal and paid off quickly when we use them.

We were able to get out of debt by simplifying: we moved from a high col area to AZ, where it was much more affordable. Things were still tight, but much better. We spent almost four years in AZ getting out of debt. I did childcare and ebayed stuff for extra money. We sold everything we could. I did a voluntary surrender on my car to save us 400/month (we bought a used van with cash instead). I cooked on the cheap and we rarely ate out. DH worked any extra hours he could get. We rented out our house and moved into teacher housing to save money, this was really the key....we went from paying mortgage/property taxes/ins/all utilities and gas for the commute to only paying a small amont in rent, and the district paid some utilites.

We just moved from AZ to CA, and we should be okay even with the higher col, because dh's salary increased enough to cover it. We can't afford to live in the town he works in (maybe we could if we didn't have the car payment, but I wouldn't want to spend that much anyway), so we are moving about 20 miles away...but he has a motorcycle for the commute or he can take the train (motorcycle is cheaper). I find that produce here is cheaper than AZ, and other food is the same; phone service is cheaper and utilities seem to be the same. It's just the cost of rent or mortgage that is crazy here!
post #72 of 94
We have a mortgage and a car loan (for a vehicle we bought brand new last September and which we expect to drive into the ground).

I agree with the pp who said that some of their current situation was luck. Although DH and I have worked hard to get to where we are, we started from very strong baselines. We both come from families where there is a strong sense of stability. Our parents have been married for 35+ years. DH moved into a house when he was 3 and didn't move again until he was 36. I only moved 3 times in my life before I got married. Both of our mothers worked, his from when he was about 6 and mine part time nights when my sister and I were both in school and then full time days when we were in 5th and 6th grades.

In my case, I grew up with parents who were very open about finances and tried to encourage me to learn how to manage money. I had a checking account when I was 12 years old. I had a paper route, and I was required to pay the newspaper company for the papers with a check. So we went to the bank and opened a checking account for me. The bank wanted my mother on the account as co-signer, but she refused to sign. She made a fuss in the bank and spoke to a manager and so I got a checking account, in only my name, at 12 years old. For a couple of months, she sat with me and taught me how to balance the account, but after that it was up to me.

I don't know about DH's family and money. I should ask him, but I get the impression they didn't necessarily talk about it much. I have been encouraging him to talk to his parents about their current situation. They are in their 70s and still working full time. His mother is the president of the chamber of commerce, and has been for many years; his father is self employed. DH believes we will need to assist in supporting them in order for them to be able to retire. More than once, his mother has commented that she doesn't have a pension and doesn't know how they will survive when she stops working. Regardless, DH picked up some very good habits regarding money. He started college as an accounting major before switching to computer programming, so maybe that helped!

My XH did NOT have good money habits, and I allowed him to run roughshod over me much more than I should have. When he left me, I was stuck with $25,000 in debt and he took anything that was valuable in our house, including the computer and the car. I didn't even know the extent of the problems because he literally hid bills from me and I kept finding them as I began sorting through our stuff in order to pack up all his things.

Even at this low point, I was very blessed in many ways. I had no children, which means I never have to talk to the XH again, but also meant that I could be more creative and flexible with my finances. I already had an excellent job which was sufficient to pay the bills and then some. We only had one car, and XH took it with him. But I lived walking distance to a bus stop and had already been taking public transporation to work. I lived walking distance to the laundromat and could take a bus or walk to the grocery store. My parents and one of my aunts lived near by, so if I needed help, they were there (I never asked for or received financial support from them, but they did help me in other ways, like allowing me to borrow a car when needed so I didn't have to walk down a steep, icy hill with my laundry in the winter). I also had an apartment that was $300 less/month than comparable apartments in the same town (I had a co-worker in the same town, in a same sized apartment. In addition to mine being $300 less, hers did not include utilites and mine included heat, which saved me another $200/month).

I was paying off the debt, and sometimes making high enough payments that I wasn't always sure if I would have enough to eat, although it always seemed to work out somehow. Eight months after XH left me, I met DH. We dated for a year, and then he moved in with me. He agree to pay all of our living expenses so that I could use my entire income to pay off the debt XH left me with. (For perspective, my entire living expenses including rent, food, electricity, etc were the same as just the rent on his apartment, so he actually saved money even though I wasn't contributing to our expenses and he did a few things to increase our standard of living, like getting cable television and a window a/c for the apartment -- I only had one in the bedroom before and it was muggy in the summer, even if it was Boston). DH already had a car, which he bought before I met him and paid off in a year. That vehicle was the one we just replaced this last September, after 7.5 years of driving and 150k miles, because it was going to require a $3000 engine repair to keep it on the road.

It took about a year to get through the rest of my debt, and I can't begin to tell you how relieved I felt! After that, I started saving money. I also began paying $100/month to help my grandparents. All four of their children do this, but I was and am the only grandchild who does, and I have continued to contribute this for the last 8 years, with a one year break due to our own difficult situation.

At the end of that year, we moved to FL. I didn't work for almost a year; DH was working a contract with a company in MA. We got married 10 months after moving to FL, and a few weeks before we got married, the company DH was working for went bankrupt owing him $20,000. It's been 4 years and we have never gotten the money, and don't expect to ever get it. We paid cash for our wedding and honeymoon ($8000 total between the two). When we got back from the honeymoon, I figured I would get a job to tide us over until DH was able to get a job. I did, but our household income that year was less than $12,000.

It took DH a year to get a job. The only reason we survived this time was that DH had saved a lot of money before I met him. He had something like $40,000 in CDs which we cashed out as they matured and used to make up the shortfall in our budget. At least in part, we used this money for 2.5 years, and just as we were beginning to get nervous, DH got a job. A good job, with an excellent salary and work he liked and co-workers he liked. A few months after that I got a new job make 50% more than my old one.

However, 6 months into the new job, the company was bought out and DH was laid off. They gave him an 8 month notice of when he would be laid off, though. He got 2 months of severance pay regardless, but if he stayed through the entire 8 month transition period, he would get an additional $25,000 bonus. He stayed. He found a new job, so he ended at the old one on a Friday and started at the new one the following Monday. Between the severance and the bonus, we got $35,000. This is what we used for the downpayment on our house.

That year, our gross household income was $120k -- 10x as much as it had been only 2 years previously! It hasn't stayed that high as DH doesn't routinely get bonuses like that, but it was a healing experience for us in many ways. I have become much more relaxed about what might happen in the future. We have been through difficult times and survived. We know that if we have a plan and we work it, we can make it through. DH is still paranoid about the what if though, and we are still working on building the emergency fund back to the level it was before all this happened.

I strongly believe that one of the reasons we have been able to do so well is that we both have college degrees and neither of us ever took an educational loan. This is already a ridiculously long post, so I won't go into how that happened for me, but if anyone is interested, I did post the story in a thread velochic started re: her nephew and college not too long ago. If you can't find it, pm me and I'll find it.

I am going to law school in the fall, and we are not going to take any loans for that either. I got a $21,000/year tuition scholarship from the school. Tuition is $29,000, so we still have to pay $8,000/year, which we will pay out of pocket. We will pay this out of pocket while continuing to fund DH's 401k at the maximum level. I am still working on the budget, but I believe we will also be able to continue saving some money in a savings account, although much less than we have been. We have already discontinued making additional payments on our loans as part of our preparation. I am going to quit work and go to school full time, so the next couple years will be tighter than they have been for us recently, but we will have NO school loans. This means I will be much more flexible in choosing a position when I get out and will be able to do something I love.

Even the low end of lawyer salaries is about $4000 more/year than I make now, with the high end being substantially higher than what I make now. DH is 10 years older than I am and my current salary is not likely to be sufficient to support me if something were to happen to him. So part of the point of me going to school is that I will have the ability to grow into a new profession, with a salary approaching what DH makes, before DH ever contemplates retiring. We also do want to have children and need to plan for the fact that DH will be retirement age right about the time we might be sending a child to college!

If you have actually read this huge post, you totally deserve a gold star or something!
post #73 of 94
Thread Starter 
I read it!
post #74 of 94
me too
post #75 of 94
Quote:
Originally Posted by Amys1st View Post
I read it!
Quote:
Originally Posted by Crunchy*VT*Mom View Post
me too
This is the only smiley that contains gold stars: :!
post #76 of 94
I read it too, and kudos to you for paying off so much money, and so quickly! An amazing accomplishment!
post #77 of 94
Read it!
post #78 of 94
This is such an awesome thread! Reading all these posts is very inspirational!
post #79 of 94
i read it! your story is very inspiring!
post #80 of 94
read it! what did you eat while paying off that much debt?! (my gold stars : )

sarah
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