It is no secret that debt is a word secured in our syntax. We use it everyday, multiple times a day. We use to discuss personal finances, business finances and even political states.
But that does not mean that some of us still harbor the idea of living debt free. What would that even look like? Would debt free mean living a "cash on the barrel" existence in which your salary went to household/auto expenses and the payments due for a service? Would it mean not having a credit card balance...at all?
Comments
Tue, May 21, 2013 - 07:07 PM
Wow...what an angry little tirade you went on there. I see alcohol has not made you [...]
Tue, May 21, 2013 - 06:04 PM
Julia, is there anything going on here that you in particular actually do not think [...]
Tue, May 21, 2013 - 05:57 PM
Seriously, what difference does it make if it is allowed to be purchased every day o [...]
Tue, May 21, 2013 - 04:42 PM
Hi Carol,
In poking around, I came across the Quarter Horse Assn and they have so [...]
Tue, May 21, 2013 - 02:02 PM
Renting a movie or taking kids to the movies doesn't compare to buying alcohol. If 6 [...]
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My wife and I have a goal of living debt-free by my 40th birthday. That is in 4 years. I think this is totally doable.
The first thing we did was set that goal. Debt free by forty! It has become our mantra. To us debt free means living by cash alone - no credit cards payments (unless for emergencies...and then the card will have to be chipped out of an ice block), no house payments (we currently live in a home less than 1000 sq. ft), no car payments (we drive a wonderful, 11-year old vehicle), no loans payments (this is our BIGGEST challenge as I am still paying for grad school and some bad financial errors a decade ago) and with a paired down living expense budget.
We want to live debt free because living in debt ties us further in to the crisis facing our nation. We get deeper in debt and therefore have to work more or longer hours. That pulls us away from family time which leaves holes in our relationship and within our family. We choose to invest in each other rather than material things.
I found this article to be really helpful. Check it out:
http://www.goodhousekeeping.com/money/budget/debt-free-jan04
Credit cards are an everyday thing for us, but we do not buy anything we don't have the cash for. We use them for the consumer protection they provide and the cash back priviledges.
We did without a lot of "things" to get here. At the time it seemed like a hardship, but now I can tell you it was worth every effort.
I encourage everyone to give it a try. You will not get out of debt quickly; just as you probably did not get in debt quickly. Believe me it is worth it!
http://www.therealcashflowceo.com/Books___Products_2XAV.html
The best solution is to live within ones means and avoid debt like the plague that it is.
Our house will be around 1100 sq. ft. and we have estimated the building at about $26/sq. ft. We are going to be doing quite a bit of building ourselves as well as enlisting a few trusted family members. We are also going to use "recycled" materials, repurposed materials and even found materials. Please don't think this means living shabbily. We are both fairly talented with our hands and artistic in our decorating so we have confidence our home will still look quite nice.
By the time we build we will have to borrow about $7000 at most. That will then be paid off within 24 months.
Again, this is idealistic and is subject to change as ALL building plans are.
Adult male $14.18 ($29,453 annually)
Adult Female $10.54 ($21,935 annually)
After deducting the 23% state and federal taxes, another $125 per month for health insurance try to make up a budget for a single female or male and see how far you get before going in the red.
Adult male $16.00/hour ($33,280 annually)
Adult female (self-employed) ($8,600 annually)
Tax deduction - $9632 annually
Net income ($32,248 annually or $2687.33 monthly)
Rent - $475/month
Utilities - $210/month
Cell Phone - $80/month
Health insurance - $517/month
Groceries - $170/month (subsidized by gardening, canning and preserving)
Auto fuel - $38/month (work locally)
Current debt being paid down - $600/month
Misc. - $200/month
This leaves $397.33/month for savings.
We do not go in the read and live quite comfortably. Granted, if we had children this budget would change and our needs/wants would change. The keys to our living are owning our vehicle(s) outright although they are older and not as flashy as we may secretly desire. We garden and grow a lot of our own produce which allows us to can, jar, preserve, etc. We also cut down by not taking magazine subscriptions, using coupons, buying second hand or used products when possible, etc.
Personal property tax is a bummer, for sure. But they are a luxury tax (unless the boat and/or tractor are part of your business...in which case you should be doing itemized deductions for those). I am not sure about your computer as I have never heard about that having a tax (again, unless it is for business). You are right. You never really do own them. Even when we move to our land we will have to pay property tax just for the privilege of having land. But that is where living within our means comes in. We couldn't pay taxes on 20 acres so we don't pursue that much. If your boat becomes a burden perhaps you don't need that size boat?
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