No debt families- share your successes! - Page 5

[p.s]

try to get the best education you can.

[greenegirl]

Originally Posted by sarahlyao

read it! what did you eat while paying off that much debt?! (my gold stars : )

sarah

Well, it took a total of 2.5 years to deal with it all. The first 1.5 years was me living on my own and then the last year living with DH. The majority of the debt got dealt with during the second part. And some of it was a car loan for the car XH took with him. He took the car, but didn't make any payments, and the car ended up being repossessed. I never paid off that loan.

The first 1.5 years was tough. I'm vegetarian anyway, so ate a lot of rice and beans. I worked next to where the weekly farmer's market was held, so I got good quality fruits and vegetables very inexpensively. I also regularly attended church, and usually ate at someone's house for dinner afterwards. Once I started dating DH, we ate out a LOT. Sometimes, the only way I was sure I would have something to eat was that we went out to eat and I brought home half of the meal for the next day. I worked in a large law firm, on the floor where all the conference rooms were. Nearly every day there were meetings and when the meetings were done, everyone on the floor descended on the leftover food, although frequently all that was left was cookies. But probably once a week, I got a meal that way. Once DH moved in with me, things got MUCH better!

I also want to emphasize that in many ways I was in that position due to my own pride. If I had confessed how bad it was, my parents or my aunt would have rushed in to the rescue. It wasn't until years later that I told DH or my parents that this was what had been going on during that time.

It also could have been better if I had sucked it up and started calling and dealing with the debt collectors sooner to lower payments or make other arrangements. I avoided talking to them for some time. Once I started talking to them, I discovered that the majority of them were not monsters and when someone treated me terribly, I could simply ask for a manager until I got someone who was nice.

[Thalia]

greenegirl, your story is very inspiring. We also went through a huge change in income over a short period of time. Right when we got married, DH was laid off. He decided to go into business for himself. His first year of work he made $8,000. At that time, I was working 2/3 time. After three years of working on his own, he started picking up contract work (he'd realized that working at home by himself wasn't a good option for him: he needed to be part of a team). He worked at one place for six months. It paid really well, but the environment was horrible. He was literally kicked in the back of the knees by another employee, verbally abused, and addressed with a racial slur more than once (and this was an IT job at a white-collar pharmaceutical company). He only stayed because he got the job through a temp company owned by a friend, and the friend asked him to stay until the job was done (he'd actually officially quit and then went back for another four weeks to finish the job). He then decided to look for full-time work and not do any more temping. He spent three months looking for work, and then started a new contract job in September, the company loved him and offered him a full-time job three months later. They created a new position for him, and he's now making 14 times what he was making when he started out on his own in 2002. He was really happy that he worked for himself, because he learned skills and discipline he doesn't feel he could have gotten any other way. He feels the same way about the horrible contract job: he learned a ton and enjoyed the work itself, even though his co-workers were horrible. With the skills that he has now, he knows that he should never have to be unemployed again.

Just wanted to share because when DH first started working for himself it was a risk and a test of faith for both of us. But it did pay off.

[magrat]

This thread has really got me thinking. We owe a huge debt of gratitude to my parents for paying for my college and loaning us money interest free when we needed it. We also owe a lot to DH's high income. We wouldn't be where we are today if it weren't for those things. *However*, that isn't to say we would be in debt without them. My student loans would be bigger certainly, and we may not own a house, or would own a much cheaper one. But we wouldn't have lots of credit card debt because I hate debt and paying interest.

I'm 27 DH is 26 and though we're not where I want to be eventually in terms of finance, we're definitely on our way. Unlike a lot of you, we don't have an issue right now with taking advantage of interest free financing on things like appliances and furniture, though we always pay our credit card in full and always pay off the interest free financing before it is due. I rather have nice things that will last a really long time than buy something cheap that needs replacing in a few years. We would be able to pay cash for a lot more, but we owe my parents some money and I'm so anxious to pay them off I often do so at the expense of our savings (I've recently changed my policy on that though, we're almost done paying them back anyway).

We spend far too much to really consider ourselves frugal, but I like to think a lot of our purchases now will save us money down the road. My car is a Scion xA - bought it new because it didn't exist used when I got it (I had to pay 3.5% interest ::gasp:: so of course I paid it off as quickly as possible - about a year and a half). It has a warranty (great, since DH is no mechanic) and I know no one else has ever driven it carelessly (except maybe DH ), it's fuel efficient and I'm going to drive it until it falls to pieces. We buy nice, classic furniture that will last a lifetime (maybe not the upholstered furniture, but everything else). I don't buy many clothes or shoes, but when I do, they're quality and will last a long time. I've made the decision to be a SAHM and hope that means I'll have more time and energy to cook from scratch, go to farmers' markets, and so on, and though it will mean a bit less income coming in, I doubt many people here would say it was a bad decision We put away as much as we can into retirement savings and have big plans to increase that significantly soon, we'd like to retire at 55 like my dad. I try to keep down the number of monthly expenses we have like cable and cell phones (though I just gave in on the cell phones a few months ago - I would be so much more frugal without DH nagging me for things all the time!) because I hate bills that come off the top right away, and they add up to so much over the course of the year. And one of the number one things I think will help is in the long run is that we plan to stay in this house forever. We love it, it's on the smaller side but is in a great location, and our mortgage will never increase, and when it's paid off, we'll have all that extra money. Upgrading to a new house whenever you can afford it can mean you pay a mortgage forever, what a drain! I understand not everyone can do that, but I'm so glad we're happy here and can. Our mortgage was a bit of a stretch when we bought it, but our income has just gone up and up and now it's easy. If we had bought a much cheaper house we wouldn't want to stay in forever, we'd be having a lot of trouble selling it now with housing prices dropping, and interest rates going up, and our mortgage payment wouldn't be all that much less. So a lot of our decisions have been...expensive now, but I feel confident that they'll help us live more frugally in the long term. I have to keep reminding myself that we're still very young and we're way ahead of where most people our age are (though obviously there are plenty of people who have put us to shame - especially people with much lower incomes who have so much more self-restraint). And I guess the point I was skirting around is the old one that the poor remain poor because they have to buy the cheap boots and replace them every year and the rich stay rich because they buy good ones in the first place and don't need to replace them. Of course, these days, it seems high income people buy more and more stuff so they end up poor and in debt - we're trying to avoid that trap.

[Amys1st]

Sounds like you have it together! I also have taken advantage of no fiancing and paid it off before any interest would be charged etc. But lately we have taken to paying w cash. It could be like you said, as our income has risen, it makes things easier (like your mortgage paymt) since we havent changed our lifestyle.

[alyrie]

I'm 23 years old and a full time college student. I moved out of my parents house when I was 18, and managed to ring up close to $15K in debt between ages 19 and 21. Last year, I decided enough was enough, and I moved into a family member's house (free rent and utilities) to begin paying everything off...BEST decision I've ever made.

I just got married in January, and besides our mortgage (already ahead), a car payment (already ahead), and about $20K in student loans...we're doing just fine.

We don't have a lot of extra money for the little things. We don't have cable, we don't run the air conditioner unless we absolutely have to, air dry our laundry, etc. We have already started a college fund for this baby. It's only pocket change that we empty twice a week or so, but it's still a start.

I was very careful in choosing a degree that I can make a good living, so when I finish in about a year and a half...my first year working a "grown up" job should be enough to pay off my car, all of my student loans, and about 1/4 of what we have left on the house.

I'm so glad DH is good with money! Hopefully in about 4 years, we can have this house paid off and begin building our own. We'll see.

[katheek77]

How are we in the black...

Um, we never had credit card debt or student loan debt. I had a scholarship and parental assistance; DH never went to college. When we bought DH's Jeep last year, we put half down (9,000), and I paid the rest off over the next six months. It's the only time we've bought on credit.

We always have an emergency fund. If my car (a '99 Contour I bought off my ex-husband) broke tomorrow, I'd be able to put half down on a decent "new to us" (2-3 years old) car.

We don't have a house, but that's because DH is in the military, and we move every 3 years or so.

We save roughly 15-25% of our income each month (600 automatically, and then I'll toss some extra money in when I notice it in the account). We opened mutual funds/IRA in May of 2005, and we have roughly 30,000 in those.

We have a credit card, but that's for true emergencies only. We've never used it.

On the off chance that a lot of stuff comes up one month and the bank account dips below my "comfort" level, I enact a belt-tightening the next month, so to speak. We ended up having to do this this month, as my car needed repairs, our old computer died, and the baby needed a new carseat as she'd outgrown the one we'd inherited. We didn't take out of savings, but I'd like to get our checking account at a more comfortable level. So, no eating out, no special splurges, etc.

The military pays well; that helps. My husband's been in 9 years, and brings home roughly 50,000 a year with housing allowance, special duty pay, etc. We also get free health care, low cost dental, etc. I only work part-time, make about 600/month, but my job ends this month anyway. Any money I make is just fun money, anyway.

I also don't want to be like my parents. They had a combined income of about 140,000/yr, and still struggled, especially after my mom became disabled (she brought in about 40,000/yr). They almost lost their house at one point. I just don't want that to happen, so I err on the side of caution, I suppose. We don't "deprive" ourselves, per se, but, we just don't have expensive tastes, I guess, and we live within our means.

Simple stuff: I might buy steak, but I buy it on sale, and I use coupons on other stuff. I buy lots of stuff for our daughter, but I also took whatever anyone offered, be it friends, employer, craigslist, freecycle. I shop at the thrift store for almost everything (just bought a bathing suit new from a "real" store). We have a blockbuster monthly membership; that's our movie theater. We JUST got cable this year, as a splurge for my husband, but got the cheapest plan possible ($15). I combine errands to save on gas. I use coupons when we eat out (kind of ironic, I suppose). I hardly ever turn the AC on. Three out of four of our parents worked for the electric company, so, we turn everything off when we leave the place, and unplug everything if we're leaving overnight. We re-use towels multiple times. I pay bills online to save on stamps. We don't have a landline.

[mamasaurus]

Originally Posted by Amys1st

You live in the black. The only exception is you pay a mortgage and its reasonable and you are on track to pay it off early.

You owe nothing else, what do you do and how did you get to this point??

Because DH is a miser.

Seriously, when he was single, in college, he lived like a pauper. He had a *tiny* studio apartment and ate Ramen noodles. When he started making money, he lived the same way.

He saved every penny he could until he had $150,000 in the bank.

Then at the age of 27 he splurged and bought a Nissan 300ZX - but he haggled and haggled the price down from $36,000 to $28,000. He paid cash.

Then, he got help from his Grandma to buy the cheapest house he could find in Malibu, CA. That house doubled in price over the next 5-7 years.

When I met him, I had $15,000 in consumer credit card debt. He taught me a LOT and now I have no more personal debt and together as a married couple we have no debt other than a mortgage.

I would say to a young person starting out in their 20s - don't fall for consumer culture as I did. Live like my DH did and eventually you will have what you need/want.

[Stone Fence]

Subbing

We're working on it.

[skueppers]

Originally Posted by magrat

I guess the point I was skirting around is the old one that the poor remain poor because they have to buy the cheap boots and replace them every year and the rich stay rich because they buy good ones in the first place and don't need to replace them.

I don't really agree that this is a major contributing factor as to why the poor stay poor and the rich stay rich. I will certainly agree that there are things "the rich" are able to do with their money that help to keep them rich, but I doubt that differences in the annual cost of things like clothes, shoes, and transportation are what's keeping "the poor" poor. I would be very surprised if the average poor person were spending more in this category over time than the average rich person.

To answer the original question, we don't have any debts other than our mortgage, which I attribute primarily to the ~10 years when we were a double-income-no-kids household. During that time we were able to buy a house, establish a healthy emergency fund, etc. We remain a debt-free household now that I'm a SAHM by driving old cars, shopping frugally for groceries, eating at home almost all of the time, and basically just never buying anything we don't have the money to buy.

[SoHappy]

We used this method:
http://www.salon.com/ent/video_dog/c...ebt/index.html

[sygo]

My DH and I also live in the black with $$ to spare that goes into the fun fund and savings each month, living in the heart of San Francisco. Our retirement and just general savings fund is better than most people's I would say, especially if you consider where we live and the fact that we don't earn 6 figures even. We always have an emergency fund, we have three cats and we go on holidays at least once a year, but more like twice (went to the Middle East for Christmas and just got back from Guadalajara, and in November, going somewhere again so we can reenter with a new visa status... next year going home to Toronto and then Moorea for my sis' wedding). I don't drive, so we only have one car, a 1995 Maxima which we paid in cash back in 2003 (When we were still living in downtown Toronto, having a car was more of a burden). We rent...with the way the SF housing market is, there is no way we can afford anything except for a small little box in the sky they call condos. I'm frugal, but wouldn't say cheap, since I do save up for stuff I really want, even if they are extravagant. But I would never buy anything expensive on a loan. DH is more free with the $ but with me around and coaching him, he's getting it. Since I decided to take time off work, I have had the time to really penny pinch without compromising our lifestyle....I discovered coupons and freezer cooking. We also try to live green, making my own homemade cleaners whenever I can. I would attribute this trait to my mom, who has always been a penny pincher (she is however really really cheap, to the point of, in my opinion, making a dumb move sometimes, when she fails to see that quality needs to be factored in to your purchases as well...sorry mom, but you do buy junk). Oh and the one thing that got me going....I know this might sound impossible to some, was when we were living in San Diego a couple years back, we learned to live on about 68% of our income (I don't use budget softwares....plain old Excel spreadsheets work fine for me since I design the spreadsheet to my own understanding), after taxes. Of course this became impossible when we moved to SF, as we both refuse to live in the suburbs, but at this point, although our savings are a bit less, we are still living beneath our means, at around 75-80% of our income. With a baby on the way, however, I could use some more advise.

[mamasaurus]

greenegirl - I read your whole post! I could not stop reading it. What an inspiring story!

[NewAtThis]

We live debt free, and the single most important financial decision we made was buying a house we could afford on one income. Dh and I bought it before we were engaged, but we talked about the eventuality of me being a SAHM "one day", so that we should buy a house that we could live in on his income. Before dd came along, and I was working, most of my income was saved up for paying off my student loan debt, and I was able to write a $20,000 check (which meant NOT buying a lot of other things)!! When we do buy big ticket items, we save up for them in advance to pay cash, or very near tax return time so our refunds will pay off the balance (only done if it a purchase that can not be put off till later).

For us, living debt free requires sacrifices on some level. We had to relocate to find a house we could afford on one income, and our cars are oooolllllllddddd. But that's ok...