What It Means to Be Debt-Free
Warning: I might offend some people with this post. That is not my intention. I am simply showing y'all things my husband and I have discovered in our journey to being debt-free.
In early-mid May, 2017, D went to a Dave Ramsey Entreleadership 1 day course, paid for by his employers. D and I grew up on Dave Ramsey - me more so than him - and were familiar with his work.
We had pulled out a loan for the house (a balloon note? with cattle as collateral) and also paid off a much smaller loan for his gunsmithing school (which he never finished, but that's another story) by then, and were floating comfortably. Or so we thought.
While the $4k loan had been in the works for being paid off for a couple of years by the time we finished it in August 2016, the $25k+ loan had been pulled out the January before we got married - so we briefly had two loans during our marriage. Unlike the smaller loan, this one had no regular payments - it just needed to have the interest paid every year and the papers re-signed.
Our initial plan was to pay off the interest and a tiny bit of the principle off annually, until we could get enough money to really go at it. But we got so caught up with our new son and changing lifestyle that we had forgotten about it and were going on as if the loan was just going to be there forever - not a big deal since it only took $2k out of our lives annually.
And then he went to this Entreleadership event. While he learned a lot on that front, he really caught the debt-free bug. Previously, he had followed other advice and pulled out a credit card to use to build up credit, so we just paid that off every month while following a budget he used that I could barely understand. We were surviving and not accumulating any more debt, but we weren't really financially secure by any means.
And then he left me in the dust and started going crazy on this whole debt-free thing, trying to figure out how to get it done and developing a timeline for getting it done. While I was all for it, the sudden change startled me and it took me a month or so to catch up and get as excited as he was.
We didn't make our first payment on the loan until the end of November, but we spent our time prior to that saving and scrounging and putting together a plan for this debt. We also talked to my parents a lot on this, since we knew that they were well-off financially and were mentally and financially debt-free. They encouraged us and helped us build the plan that brought us to where we are today.
In a total of nine payments from November 30 to June 20, we paid off over $26,000, without counting the $2k we paid for our loan renewal the December before that. That's less than seven months! We stopped using the credit card, and this spring finally canceled it and my beloved, instead of using the "scissor-method" to get rid of it, as Dave does, instead shot it to pieces with his handgun on the little range we have here at home.
The budget was revamped and we started using the EveryDollar app, which made it a whole lot easier to do everything - now we only save feed receipts for taxes and don't have to worry about collecting them to go over our pad and paper! We still keep a budget for upcoming months and paychecks on a spreadsheet to keep track of what we need to put money toward.
And since we paid off the last of our debt, we have realized what it really means to be debt-free.
It's not just a financial status. It's a mindset. A mindset even those financially debt-free don't often have.
We see friends and family go into debt (or get more debt) and think little to nothing of it. We've heard, "What does it feel like to be debt-free - for now?"
And sometimes we want to wring necks and beat sense into people.
And then we have to step back and reevaluate.
Their lifestyle isn't ours. Their financial status doesn't affect us. We are beating our own path, our own trail. Maybe they will follow one day, and maybe they won't.
Debt free means living within your means, doing without until you have enough money to get those things you want without taking out a loan or making payments. It is having a sizeable emergency fund (which is next on our to-do list financially) so that you can pay for things without going into debt when emergencies come up or you lose your job.
Being debt free is preparing for the future. It's making your money work for you, not the other way around. It's having the self-control and determination to pay cash for those things you want, like that house you want to build or buy, or the new car or truck that's sitting in the lot that you drive past every day. It's being willing to drive older vehicles, look for "new" rides online and beyond the dealerships, to save money and live carefully until you have enough set aside (without using that emergency fund....) to pay for that dream home or car.
It's having a budget and sticking to it. It's investing money for retirement and having common sense. It's going to Goodwill or Walmart for clothing, instead of brand-name stores for shoes and outfits. For us, it means going to Aldi - an hour away - for groceries, where we can get a comfortable month's worth of food for under $200. Try doing that at Walmart!
The mindset of being debt-free is being so determined to not go into debt that you put aside thousands of dollars in an emergency fund and only tap it for true emergencies, and putting aside thousands, tens of thousands, and maybe even hundreds of thousands, of dollars for the house or car you want so that you won't have to pay interest (which really drives up the actual cost!) or get a note in the mail every month. It's not renting-or-leasing-to-own, but simply buying outright, because you know that it's much cheaper this way and you have no risk involved when simply saving up and buying, rather than risking losing the car, house, furniture, or whatever you are making payments on.
It's being so determined to stay out of debt that the only way you get into debt is with a medical emergency that the emergency fund and insurance cannot cover. It's not having a credit card in your wallet, tempting you to go over budget "just a little" and getting you in trouble. It's knowing that you don't need a credit score for a mortgage, and anything else you need a credit score for is terrible, ugly debt. It's realizing that renting an apartment can be cheaper than a mortgage payment, and you can still put money aside to buy or build the home you dream of without risking bankruptcy. Or foreclosure....
Can you imagine how much more money you will have to spend on little fun things every month if you don't have these mortgage or car or credit card payments to deal with on top of the utility bills? That's more money to spend on little gifts for the kids, date nights with your sweetheart, or to put aside for a special occasion or big purchase.
Being debt-free can be a lot of work, but by being intentional with your money, sticking to a budget, and reminding yourself why you're debt-free, you can avoid a lot of the headaches that come with debt. For me, finances are no fun. I don't enjoy numbers. But now that we are out of debt and not setting aside half our monthly pay to go to a bank to keep our cows, I breathe so much easier. Every dime in the bank is ours, now. Nothing is being risked just so we have a home. I really, truly enjoy being debt free. And as of today, we have been debt free for a whole month. Thirty days. And it feels good.
In early-mid May, 2017, D went to a Dave Ramsey Entreleadership 1 day course, paid for by his employers. D and I grew up on Dave Ramsey - me more so than him - and were familiar with his work.
We had pulled out a loan for the house (a balloon note? with cattle as collateral) and also paid off a much smaller loan for his gunsmithing school (which he never finished, but that's another story) by then, and were floating comfortably. Or so we thought.
While the $4k loan had been in the works for being paid off for a couple of years by the time we finished it in August 2016, the $25k+ loan had been pulled out the January before we got married - so we briefly had two loans during our marriage. Unlike the smaller loan, this one had no regular payments - it just needed to have the interest paid every year and the papers re-signed.
Our initial plan was to pay off the interest and a tiny bit of the principle off annually, until we could get enough money to really go at it. But we got so caught up with our new son and changing lifestyle that we had forgotten about it and were going on as if the loan was just going to be there forever - not a big deal since it only took $2k out of our lives annually.
And then he went to this Entreleadership event. While he learned a lot on that front, he really caught the debt-free bug. Previously, he had followed other advice and pulled out a credit card to use to build up credit, so we just paid that off every month while following a budget he used that I could barely understand. We were surviving and not accumulating any more debt, but we weren't really financially secure by any means.
And then he left me in the dust and started going crazy on this whole debt-free thing, trying to figure out how to get it done and developing a timeline for getting it done. While I was all for it, the sudden change startled me and it took me a month or so to catch up and get as excited as he was.
We didn't make our first payment on the loan until the end of November, but we spent our time prior to that saving and scrounging and putting together a plan for this debt. We also talked to my parents a lot on this, since we knew that they were well-off financially and were mentally and financially debt-free. They encouraged us and helped us build the plan that brought us to where we are today.
In a total of nine payments from November 30 to June 20, we paid off over $26,000, without counting the $2k we paid for our loan renewal the December before that. That's less than seven months! We stopped using the credit card, and this spring finally canceled it and my beloved, instead of using the "scissor-method" to get rid of it, as Dave does, instead shot it to pieces with his handgun on the little range we have here at home.
The budget was revamped and we started using the EveryDollar app, which made it a whole lot easier to do everything - now we only save feed receipts for taxes and don't have to worry about collecting them to go over our pad and paper! We still keep a budget for upcoming months and paychecks on a spreadsheet to keep track of what we need to put money toward.
And since we paid off the last of our debt, we have realized what it really means to be debt-free.
It's not just a financial status. It's a mindset. A mindset even those financially debt-free don't often have.
We see friends and family go into debt (or get more debt) and think little to nothing of it. We've heard, "What does it feel like to be debt-free - for now?"
And sometimes we want to wring necks and beat sense into people.
And then we have to step back and reevaluate.
Their lifestyle isn't ours. Their financial status doesn't affect us. We are beating our own path, our own trail. Maybe they will follow one day, and maybe they won't.
Debt free means living within your means, doing without until you have enough money to get those things you want without taking out a loan or making payments. It is having a sizeable emergency fund (which is next on our to-do list financially) so that you can pay for things without going into debt when emergencies come up or you lose your job.
Being debt free is preparing for the future. It's making your money work for you, not the other way around. It's having the self-control and determination to pay cash for those things you want, like that house you want to build or buy, or the new car or truck that's sitting in the lot that you drive past every day. It's being willing to drive older vehicles, look for "new" rides online and beyond the dealerships, to save money and live carefully until you have enough set aside (without using that emergency fund....) to pay for that dream home or car.
It's having a budget and sticking to it. It's investing money for retirement and having common sense. It's going to Goodwill or Walmart for clothing, instead of brand-name stores for shoes and outfits. For us, it means going to Aldi - an hour away - for groceries, where we can get a comfortable month's worth of food for under $200. Try doing that at Walmart!
The mindset of being debt-free is being so determined to not go into debt that you put aside thousands of dollars in an emergency fund and only tap it for true emergencies, and putting aside thousands, tens of thousands, and maybe even hundreds of thousands, of dollars for the house or car you want so that you won't have to pay interest (which really drives up the actual cost!) or get a note in the mail every month. It's not renting-or-leasing-to-own, but simply buying outright, because you know that it's much cheaper this way and you have no risk involved when simply saving up and buying, rather than risking losing the car, house, furniture, or whatever you are making payments on.
It's being so determined to stay out of debt that the only way you get into debt is with a medical emergency that the emergency fund and insurance cannot cover. It's not having a credit card in your wallet, tempting you to go over budget "just a little" and getting you in trouble. It's knowing that you don't need a credit score for a mortgage, and anything else you need a credit score for is terrible, ugly debt. It's realizing that renting an apartment can be cheaper than a mortgage payment, and you can still put money aside to buy or build the home you dream of without risking bankruptcy. Or foreclosure....
Can you imagine how much more money you will have to spend on little fun things every month if you don't have these mortgage or car or credit card payments to deal with on top of the utility bills? That's more money to spend on little gifts for the kids, date nights with your sweetheart, or to put aside for a special occasion or big purchase.
Being debt-free can be a lot of work, but by being intentional with your money, sticking to a budget, and reminding yourself why you're debt-free, you can avoid a lot of the headaches that come with debt. For me, finances are no fun. I don't enjoy numbers. But now that we are out of debt and not setting aside half our monthly pay to go to a bank to keep our cows, I breathe so much easier. Every dime in the bank is ours, now. Nothing is being risked just so we have a home. I really, truly enjoy being debt free. And as of today, we have been debt free for a whole month. Thirty days. And it feels good.
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