A Life Without Debt

A lot of people are realizing that a life without debt is both liberating and safe. It’s something that more and more people are striving for. The problem is, many people who would like to live a life without debt have no idea what that sort of life looks like. They have spent so many years financing their wants and needs that they’ve lost sight of what a life without debt entails. What happens when you’re debt free? How do you stay there?

There are a lot of books, websites, and experts that can tell you how to get out of debt. But what no one ever talks about is what it takes to live a day to day life without debt, or how to avoid debt in the first place. It’s assumed that once you get out of debt that life becomes easy. But as someone who has lived without debt her whole life, I can tell you that it isn’t easy. It takes work, dedication, careful decision making, and some sacrifice. But when times are tough like they are right now, every decision and sacrifice we ever made turns out to be so worth it.

If you’re wondering how it’s possible to live a life without debt and what that lifestyle might look like, I’m going to let you peek into my life over the coming weeks. As someone who lives the debt free lifestyle, I’m going to show you the day to day decisions that we make to avoid debt. I’ll share my sacrifices with you and give you an idea of what it takes to live within your means. But first, a quick introduction.

We have never carried any debt other than our mortgage and some small, very short term loans that were used to buy income producing equipment and supplies. We’ve never carried credit card, auto, or student loan debt. We’ve never had a home equity loan, either. Before you dismiss me and think that we must have some huge income, let me assure you that this is not the case. We’re in our mid-30’s now and earn (combined) about $70,000. It’s a good income, but not huge. When we were first married we were barely twenty-one and we made about $20,000. And we’ve stayed out of debt the entire time. And no, we don’t have wealthy families who were funneling us money on the side or leaving big inheritances. We did it all ourselves. We started out very small and improved our lives as our income grew. There were layoffs and pay cuts and emergencies along the way, but we managed. We stuck to our plans and did what we had to do in order to avoid debt.

Why would someone want to live without debt? Why was this so important to us? We decided early in our marriage that avoiding debt was a priority for us. We didn’t want to be tied to a bank and we wanted to own everything we had. We wanted the security of knowing that nothing could be taken away from us. We didn’t want to live in fear of the repo man. We didn’t want to fear a layoff or pay cut. We wanted the security of knowing that, if bad things happened, we would be okay. We wanted to plan and save for our future, not constantly be putting our future on hold because we had to pay off our past. Yes, it meant living very small at times, but we always slept well at night and lived a life without the fear that lot of people experience.

Just as there are challenges to being in debt, there are challenges that come with being debt free and wanting to stay that way. Join me in the coming weeks and I’ll show you some of those everyday challenges and how we deal with them. I’ll be honest and frank about our financial situation and I won’t sugarcoat everything to make it seem so easy. As my mother used to say, if it were easy, everyone would do it. I’ll also be taking questions in the comment trail, so if you want to know more, ask away.

To get started, here’s an example of the choices you have to make when you decide to live without debt. We desperately needed to redo the floors in this house. The carpet was a mess and the vinyl was peeling up. It was a project that we knew was coming, but put off in favor of more pressing things.

I really wanted to hire someone to do it. I have a low tolerance for mess and disruption to my life and I thought that hiring a team of contractors would get it done much faster and spare me some of the pain. So off we went to do some research and gather price quotes. (Research and comparison shopping is essential to living debt free. You have to learn to find the best price on what you need and want.) I was shocked at how expensive the installation was going to be. The flooring wasn’t that expensive, comparatively, especially since we found the exact flooring we wanted at a wholesaler for less than half of what the home improvement chains wanted for it. But the installation would kill us.

We wanted to do the whole house for under $5,000. We could afford more, but that was the limit we were comfortable with. Any more and we would have to re-prioritize some of our other goals. With installation, the project was going to run about $8,000. The installer offered 12 months same as cash to make it easier to swallow.

We debated for a few days about whether we should go ahead and pay for the installation and defer or forego some of the other things we were planning. We could easily pay off the loan before the 12 months were up, but in an uncertain economy we felt that taking on debt would be risky. If one of us lost our jobs and we had to live off our savings for a while, that loan may end up costing us interest. We could opt to pay the $8,000 all at once and avoid the loan, but then for certain other goals would suffer. Was having the flooring installed worth the hit to our other goals became the big question.

Finally, we decided to do it ourselves. It would take longer and be more disruptive to our lives, but the savings would be substantial. My spouse is very handy, so I knew we could do it. The cost for the flooring was under $3,000. Even after we added in the extra tools and materials we needed to buy, we were well under $4,000. Since we would be so far under budget, I took about $400 and bought some new light fixtures, moulding, and paint to spruce up a couple of rooms. For just at $4,000 we got all new floors, new paint, new lights and some other small updates.

Yes, it was a lot of work, but we did about 1,500 square feet in three weeks, working at night and on weekends. We saved about $4,000, avoided taking on a loan, and got more than we originally planned. We’re tired, but very happy with our project. (We probably did better than the installers because it’s ours and when something is yours, you take more care with it, I think.) We are still on track for our other goals.

When you decide to live debt free, you have to balance what you want, in this case peace and a quick installation, with what you can realistically afford without dinging other parts of your budget. Had we paid the higher amount or taken on the loan, we would have had a quick installation, but would have needed to give up some travel plans and contributions to our savings. Since we wanted the travel and savings more than the quick installation (and we didn’t want the risk of a loan hanging overhead), we chose to do the installation ourselves. We could deal with the disruption more than the loss of other things. We could have blindly taken the easier road and paid more, but it would have cost us in other areas. Making the best choice, which isn’t always the easiest choice, is essential to remaining debt free.

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20 Responses to A Life Without Debt

  1. Mr Plasectomy says:

    Great article and I look forward to hearing your story over the next few weeks.

    It is all about sacrifice and having goals. Our society is a debt society. It is how are economy runs now and it is sad. So many lives are ruined because of debt. I wonder how the divorce rate would be if money wasn’t an issue.

    I love that you are a DIYer. That is a great learning experience, it takes time, but it is also more fulfilling.

  2. Shane says:

    Great post !!

    Looking forward to the rest of the series :-)

  3. Joshua says:

    I will definitely be following your journey. I myself live the same type of life. I bet the whole floor project was also a great experience for you guys to do something together anyway.

  4. Julie says:

    I am looking forward to your story also. My husband has always been a do it yourselfer and I am so grateful. We have lived without debt for years because we are not into “things”. I have no cell phone, no flat screen tv, etc. and I am fine with that.

  5. Kenny Johnson says:

    I’m not debt free and I can already tell it can be hard work. We’re about 6 months in to our debt reduction plan. We’ve had the last 6 months where we haven’t accumulated any more debt. That’s sadly, probably the longest I’ve gone since I was 18.

    Staying on budget is hard. We’ve had to ask for help from my dad once already because of too many emergencies without enough funds. He gave us money instead of loaning it.

    I can handle the will-power not to consume “things” but I have a hard time with not spending money on lunches or a trip to fast food on the weekend because there’s no food in the house and I don’t feel like shopping. Why? I’m more lazy than I am materialistic. Not that that’s better.

    There’s 2 of us. So, we have to agree on our finances. It’s harder, because 1 person can say, “We can do without this” and the other is like “No we can’t!”

    However, if I make it debt free, I do see it being easier than it is now. We have about $1200/mo in debt obligations. If we weren’t in debt, that would be that much extra money each month to save, which would make emergencies a lot less stressful.

  6. Stephen Waits says:

    Mortgage = debt!

  7. DAWN DAVIS says:

    I also live debt free,it’s such a blessing to be retired at 52 with a good pension from work.It’s great to volenteer at the MMC community thrift store,at the community soup kitchen,church and other places.It’s so energizing,fun to be creative with your time and $$$. Also I’M THRILLED TO ADD YOU TO MY FAVORITES.

  8. chris says:

    We’ve been DIYing our home for the last year and a half. The flooring was the only thing that we had a professional do because I thought it would be easier and less disruptive as well. The actual time involved for a pro to install about 700 sq feet of hardwood? About three and a half weeks. Since we have a 100+ year old house I still had to caulk the gap between the new shoe moulding and the original moulding, which took and additional two days. I’m not sure I saved any time with a pro, and it was very messy. The real upside is that I didn’t have to deal with the many “surprises” an old house has to offer during a renovation— for example wavy sub floors, and radiators that are actually cemented into the foundation. If my husband ever talks me into buying a newer home I would definately do the flooring ourselves.

  9. gargirl says:

    What a great post. I, too, am looking forward to the rest of the series.

  10. Diane says:

    I’m interested in hearing your story of living debt free.

    I’m just starting on a debt-free life (other than a low-note mortgage) after many years of living in debt, filing bankruptcy for my ex-husband’s business debt (community property state), dealing with an IRS Lien on my house (ex wouldn’t file taxes).

    I think I can live debt-free and save money to pay cash for future home improvements, car repairs, etc. because without debt payments I have income available to save.

    I sometimes pay for work done on the house that I can’t do myself or with the help of my bf.

    Some things I do myself – including painting inside & out, taping, floating & texturing sheetrock, tiling the kitchen backsplash. I don’t do electrical work, or plumbing or car repairs.

    Up until now I’ve been willing to use no-interest financing (Home Depot) to get some work done, provided I can easily pay for it in the alloted time. I’m not sure if I will continue that.

    Since I finally have a decent emergency fund, I feel more secure in my finances, but I’m not willing to pay interest on anything.

    Will follow your story, to see what I can learn.

  11. crazyliblady says:

    I am also looking forward to being debt free. We are currently paying two medical debts of about $2800 total and a credit card at about $1800. This amount is down from about $10000 total 2 1/2 years ago. I finally have our spending under control, use coupons regularly, have nearly ceased eating out, and am regularly contributing to savings. I am also contributing to my retirement. We still pay for Netflix. I could happily do without it and borrow movies from the library, but hubby refuses to do that. Because we are still in debt, it is almost impossible to save for emergencies while also trying to save to buy a different car. We will likely need to replace at least one of our vehicles within 2 years. I would like to replace both with one certified used vehicle, but one of our vehicles is in such bad shape, we may have to pay someone to take it. The other one is not real bad, but it has some mechanical problems which we are planning to use part of our tax refund to fix. How do you all save for something like this when there doesn’t seem to be anywhere else to cut?

  12. Gail says:

    With some friends help and occassion contractors for some of the jobs, my husband essentially built our house–a large one that is handicapped accessible for me. When he was done with some of the jobs such as the plaster board, he had some plaster board left over and the jack that was used to get it up on the ceiling. He sold that stuff to a neighbor who was doing up his house. We made enough on the deal that it covered the cost of the jack we bought. We could have rented the jack, but the time length that we would have had to rent it for would have cost more than buying one outright. Then as I said we sold it. We aren’t debt free yet, but that is the kind of thinking and calculations you need to do if you want to be debt free.

    I will read your series with delight!

  13. Karen says:

    I am so pleased to hear that others are being super responsible and living the way that many Americans should be living. I am finding so many positives in our troubled economy. One positive is that I FINALLY feel that others just might get it when I say”No I do not go to Pampered Chef or Purse Patries as I don’t want to spend money that way. I don’t want to go shopping to the mall as I buy all items in thrift stores. I don’t want a new car and my hubby likes his $400 Honda Civic for driving back and forth to work. I will go on a vacation but want to save for one yr. first. I want to give my time and small gifts to those IN NEED for Christmas. I don’t want to give or get presents” Is anyone else getting the positives to this? Finally others are not on me like in the past. I am enjoying how parts of this economic challenge are influencing me.

  14. Diane says:

    Karen –

    My boyfriend & I have been saying for awhile that this might be a much-needed correction in the pattern of spending that has become commonplace in the U.S.

    Maybe people will start to spend less & save more, & consider their purchases more carefully.

    That said, I feel terrible for those losing their jobs through no fault of their own, or losing their homes due to medical bills or job loss.

    I don’t feel as bad for those who bought more house than they could afford or a huge SUV & now can’t pay for it.

    I’ve lived in the same small house for 25 years and I would have liked something larger to raise 2 boys & all their friends. But I wouldn’t spend more than I could afford on a house note. Period.

    Some people who were wiling to take the risks are now paying a terrible price.

    Overall, I do think that this correction, while painful, was maybe necessary to get the nation back on track.

  15. Cindy M says:

    I’m with #6. The mortgage IS a debt, and yes, I do have one. If I could do it over, I’d have stayed in the first home I purchased and paid it off ASAP all those years ago and still lived there or rented it out after I paid it off. I say those are the smartest people, the ones who own rental properties and know how to keep them rented out.

  16. I think it’s a great article and the premise of living without debt is ideal, but I have to agree with the other comments regarding the mortgage, as taking out a mortgage loan contradicts the very idea of living without debt itself, since it is in fact such a major debt to incur.

    Without home mortgages, most people would be forced to rent an apartment or house (depending on their family’s needs) until they could possibly save up enough money to buy a house outright, which would be very difficult and close to impossible for some families.

    I definitely agree with the idea of not taking out “unnecessary” debt, like what may be required for more expensive or extravagant home repairs, but without the ability to obtain loans, most American’s would be hard-pressed to live out their version of the American Dream.

    It’s ideal to say it’s liberating to live without debt, and that’s true, but debt is in itself a necessary evil for most people that don’t have the means to get ahead otherwise.

    Unless of course you don’t want to own a home or drive a decent car or send your kids to college or do all those other things that families take out loans to do each year and couldn’t do without going into debt.

  17. Sadie says:

    Since so many people are wondering about the mortgage, let me clarify: I no longer have the mortgage. As you’ll learn in the next piece, when we bought we paid 50% down and took out a ten year mortgage on the rest, and paid it off in five. We no longer carry it, so we are truly debt free.

    But yes. Technically we carried “debt” for five years. As one person pointed out, it is almost impossible to own a home without financing some part of it, but as an appreciating (mostly, hopefully) asset, it is considered “good” debt, unlike credit cards and consumer loans. I still didn’t like having it, but we got rid of it so quickly that it never put our other goals in jeopardy.

  18. Andy @ Retire at 40 says:

    Doing it yourself is a great way to get things done at a more reasonable price, especially if you are handy like you guys are. Amazing how it still turns out cheaper even though you had to buy extra tools too!

    Good going and well done on sticking to all your goals.

  19. DAWN DAVIS says:

    GREAT story,I would like to read more next time.I also live a life without debt.There are so many oppunities and blessings in this world.Tomorrow it’s volenteering at our local soup kitchen,visiting our thrift store and skating for free. Dawn

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