A Life Without Debt: 10 Things That Make Being Debt Free Possible

When people find out that I’m debt free, the thing they most want to know is how it’s possible and how they can achieve it, too. Quickly. They want the crash course or the quick fix to debt free living. I tell them that there really is no quick fix. There’s no magic pill that can suddenly make you debt free. If you’re already debt free, you know that you have to constantly watch your spending and make sacrifices and smart choices to stay that way. If you’ve got debt, you know how hard it can be to pay it down and finally get ahead. It’s not easy and it’s not quick. Debt free is a way of living that evolves over many years of debt free choices and actions.

That said, there are some things that have made living debt free possible for me. I’ve talked about some of them in this column before. They are choices and actions that might have led me into debt had I done things differently. It’s not a quick fix, but I share with you the top ten actions and decisions that I’ve made that have kept me debt free.

We bought a small, easily affordable house: We bought a house that was affordable on just one of our salaries, saved up a large down payment, and paid the remaining small mortgage off quickly. By doing this we’ve avoided a house payment for many years and been able to bank that money. When you buy a house that stretches you financially just to make the payments, it leaves you much less money for saving and dealing with life’s emergencies.

We pay for cars with cash: We’ve never had a car payment. We’ve always bought what we could afford to pay for with cash. We save for our cars. It’s meant that we haven’t always had the prettiest, newest cars, but we’ve had reliable transportation and we haven’t had to tie up our money with a payment.

We bank raises: Whenever we’ve gotten pay increases at work, we’ve upgraded our lifestyle a little bit, but banked the rest. We’ve never matched our lifestyle to our salaries. This gives us much more money to save, invest, and use to pay cash for large purchases.

We have an emergency fund: No matter how little money we made, we always saved something, even if it was only $10 per paycheck. By always saving we created an emergency fund that keeps us from having to pull out the credit cards when someone gets laid off, has a medical problem, or when something breaks.

We bought an affordable house Part 2: Besides the mortgage, owning a smaller home has meant that we’ve paid much less in insurance, taxes, and utility bills. Too many people not only stretch to make the mortgage payment, but also have to stretch to cover all of the other expenses associated with home ownership, leaving them with no choice but to incur debt to cover other expenses.

We do not shop recreationally: We have a lot of hobbies and shopping isn’t one of them. When we need entertainment, we don’t head to the mall. It helps that neither of us likes to shop all that much in the first place, but by not going to the stores unless we need something, we’ve been able to keep our spending low and avoid impulse purchases.

We use things until they die: We don’t upgrade and replace TV’s, appliances, clothes, cars, or anything else just because we’d like something newer. We use everything until it dies and then we fix it if possible until it can no longer be fixed. Only then do we buy something new. We don’t have the latest and greatest of anything, but by delaying purchases until they are necessary we give ourselves much more time to save for replacements and avoid debt.

We keep monthly bills to a minimum: We don’t sign up for a lot of subscriptions and things that result in a lot of monthly bills. Cell phones are prepaid and for emergencies only, we don’t have cable, we don’t subscribe to any websites for additional content, our Internet is “slow” high speed, our landline phone doesn’t have any extras like call waiting, and we limit magazine subscriptions. We conserve electricity and water like crazy to keep those bills as low as possible, too. Keeping our obligations low, getting only what we need, and foregoing expensive add-ons means that we have far less money going out every month.

We never pay retail: It is very rare for us to pay retail for anything and this has resulted in substantial savings over the years. We use coupons, wait for sales, haggle when appropriate, buy used when we can, and comparison shop to get the best price. If we can’t get a price we’re happy with, we walk away. We do this for everything from food to travel. It may seem silly to strive to get the best price on every little thing, but every penny saved is one more for the savings accounts.

We don’t care what other people think: This is perhaps the single biggest thing that keeps us debt free. We simply don’t care what people think about our lifestyle and our choices. We don’t care if people think we have ugly cars or that we don’t wear the trendiest clothes. It doesn’t matter if people think we’re strange because we use coupons or because we don’t go out every weekend. What we own is clean, well kept, and paid for and that’s all that matters to us. Because we don’t care, we’re not constantly in a spending race with others to outdo them and to keep up with trends.

There are many other things that we do to cut spending and save money, but these are the ten that have made the biggest difference to us. If there is a “crash course” to debt free living, this is it.

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21 Responses to A Life Without Debt: 10 Things That Make Being Debt Free Possible

  1. Rick says:

    Great article !
    I’m glad that someone is telling it like it is. Getting out of debt takes time and discipline.
    It concerns me when I hear the DR callers tell the audience how they got out of debt in six months by eating rice and beans. It’s just not that fast and easy.

  2. Sandy L says:

    Your lifestyle is really inspiring. I do probably 7 out of 10 on the list…but it’s hard to do all 10 all of the time.

    I really think the biggest one hands down is the small house. People can’t believe it when we say we only buy 2 tanks of oil/year in New England. The people that are the most amazed are the ones with “great rooms” or high ceilings. What a crazy waste of space heating and cooling all that extra headspace.

    Most things we use til they die with the exception of energy efficiency improvements. We did buy new windows, doors, appliances, and lightbulbs when our other ones still worked.

    Although the appliances are prettier and much more efficient to run it’s a bittersweet decision because I know they aren’t made to last like they were years ago. Our appliances were 34 years old and still worked fine. I really doubt we’ll get more than 10 out of them now.

  3. Felicia says:

    Great article. Personally, I do not like to keep a credit card balance, however I was recently checking out the site StackMeUp.com and found that I am one of the few that follows this rule. According to their income statistics, the average American has $5,200 in credit card debt alone. This does not include any car payments, loans, etc. I found this alarming, yet not surprising considering we as a culture do tend to splurge when we don’t always have the money to back these purchases.

  4. Jay Gatsby says:

    As opposed to others, I disagree with many of your points:

    We bought a small, easily affordable house – Not overextending yourself to buy a house is a good idea. However, paying off the mortgage quickly at today’s low rates, and then taking the next 10+ years to save up the same amount, is not a financially smart move.

    We use things until they die – I used to subscribe to this theory. Unfortunately, it is important to weigh the cost of keeping something that has yet to wear out versus upgrading to the latest technology. For example, my wife and I bought a flat panel TV for $130 on Black Friday to replace a tube television in our kitchen. The flat panel takes up much less room and provides a much better picture than the tube television. We are giving our old TV to the son of my sister’s brother-in-law (who is just starting out in life and has little money).

    We keep monthly bills to a minimum – admirable, but it is important to consider whether there is any value to having the things you seem to disdain. Cable is overpriced, but in an area where local TV reception is spotty, it make sense, particularly where you have the capability of DVR’ing the shows you want to watch.

    We don

  5. Broken Arrow says:

    Those are all great point, but the last one is my favorite. Like it or not, people are going to judge you, and it’s important that you do not let them bother you and deviate you from your goal.

  6. Broken Arrow says:

    Jay, I agree with some of your points, and yes, it really does depend on the situation.

    That said, and especially with the last point, I can’t agree with that. To be frugal and debt-free typically translates to being low key and almost bland. But that’s not the same thing as wearing a potato sack, waving a pirate flag, and shouting, “Down with consumerism!” No, to attract attention, I think you do have to put forth effort.

  7. Your family’s self discipline makes all the difference. I admire that.

    John DeFlumeri Jr

  8. William Nyikuli says:

    Good post. Just one question, which was prompted by the, “keep banking” thing you said.

    Is your goal to endlessly save money and pile up savings, or is it to 1. enjoy life (discover and experience the world) and make your money flow (i.e. in a business, charity).

    I’m not careless, and I beleive you should be responsible. But once you have an emergency fund, why must one continously self-deny?

    I think the debt, rent vs. own, etc arguments are the wrong way of looking at it. A better way, is are you able to sustain your way of life without worry? and do you have a backup continency?

    If you have 6 months liquid savings, AND if a car payment is sustainable (i.e. you still have some money left over after all bills paid) I don’t see the problem. This is veering into philosophy now, but take a car. Wether I’m financing it or I “own” it is irrelevant to the enjoyment or experience I derive from driving the car.



  9. William Nyikuli says:

    “We never pay retail: It is very rare for us to pay retail for anything and this has resulted in substantial savings over the years. We use coupons, wait for sales, haggle when appropriate, buy used when we can, and comparison shop to get the best price. If we can

  10. Glenn Abelson says:

    Glad to see other people addressing this topic as well. My wife and I started subscribing to these concepts decades ago. However, we went to an actual budget that we lived on for years. It gave us an additional sense of knowing exactly where the money was going and why. When we finally got off the budget, the habits were so ingrained, that now, decades later, we still live on the budget that we know longer maintain.

    Glenn Abelson

  11. Gail says:

    Financially you have done what is right for you and your family and that is great. We are working hard to pay off debt currently and I can hardly wait for that day when it is gone! The one thing people tend to forget about when they see someone saving and saving is the huge health care monster that can come into your home in the middle of the night and takes up residence for the rest of your life. Your earning power disappears, your savings if meager disappears and the debt piles up. With a paid off house, limited monthly bills, significant savings etc. you are in much better shape to deal with this monster. Too many people think it won’t happen to them. Just wait.

  12. Jason says:

    Debt free is easy for you because you choose to live “poor.” While it is true that the best things in life are free you take being cheap to a new level. Of course you don’t care what other people think, otherwise you would be constantly having to defend yourselves to everyone. The American dream is not maintaining the most basic level, it is trying to get ahead. To do better than your parents did before based on the opportunities that were afforded to you by them. Most everyone that I associate with could live debt free according to your guidelines. Having such a low overhead makes it easy. Not all debt is bad. A low, fixed rate mortgage can be valuable if for the tax deduction alone. While I’m not trying to judge you and am glad that you are happy, I don’t think that its a remarkable story whatsoever. If you upped the ante and were still able to live debt free then you would deserve kudos and press.

  13. William says:

    I agree with Jason on the point of living poor. Why live your life penny pinching, and voluntarily sacrificing quality and rich experiences when you don’t have to*? Especially because of the EXPECTATION that something horrible will happen. I figure you have 6 months liquid reserve, your money is active (meaning it’s going into a business, or charities, etc etc), then almost any situation can be handled. In ways you might not think.

    Example: You might think spending money on a dinner outside is a waste,or hosting friends is a waste. But in a time of need, a strong social circle can come through for you. That’s what I’m getting at, it’s nto as simple as save save save save. that’s a scarcity mentality towards money and towards life. Why not approach it with an attitude of abundance?

    Lets say you save save save save. Ok, you have 15 K in the bank. A disaster happens. The disaster is a “30 K” hit. Vs. the person that has 7K in the bank, there’s really not that much difference. This is assuming calamity or worst case scenario.

    I’m not against saving. It’s good for teaching kids and young people good habits, and yes, you should pay yourself first. However, I’m against endless saving beyond a certain point. Saving forever and ever for no reason other than saving itself, or to “prepare for disaster”. You just need 3-6 months basic liquid savings and that’s it pretty much. Money used on resources like fun, developing friends, charities, businesses or investing, personal development, etc is not a waste.

    *if you’re genuinely poor, it’s a different story, but even then if that poverty is endless that’s a red flag pointing out to other problems about you that need to be fixed)

  14. Gail says:

    I find it interesting that so many think that the original poster is living poor. She is living her chosen lifestyle! She is happy and content from all the posts of hers that I have read. You are making assumptions that because they don’t care what the ‘full of debt’ people think about them, they don’t have friendships and a solid social circle.

    The whole point of this website and the postings is Saving Advice, NOT Spending Advice. Sadie’s posts are inspiring.

    I also find it interesting that many of you think that a rare disaster might not happen and if it did you would only need the 3-6 living expenses tucked away. Obviously you have never had a major health care crisis that has sucked the life out of you. If your health care problems continue past your short term disability (if you were smart enough to have it) and you have no long term disability, you will find yourself quickly between a rock and a hard place. You no longer can work, so your health benefits have ended unless you have the money to pay $400-900+ a month for Cobra benefits and the co-pays for your meds, etc. Without COBRA you face paying all medical bills yourself. If you can manage to get yourself declared disabled for Social Security purposes you can not get Medicare until 2 years from the time you are disabled. Then you have to pay endless MC premiums, supplements and drug benefit premiums along with co-pays. In the meantime who is going to pay for your health care? Not welfare in most cases because if you own your own home and have a car or two you will be considered to have too many assets.

    Having your bills paid off, a paid for home, and a healthy bank account is a great way to fend off disaster. Too many people think it won’t happened to them, but statstics point otherwise. Look at the ones that say most Americans can’t survive without their next paycheck. We need more debtfree lifestyles in our world and not less.

  15. William says:

    Statistically, I’ll get a divorce. Guess I shouldn’t have married a few months ago?

    You’re confusing skepticism about endless savings, with recklessness. Again, what I’m saying is your money should be active, not passive. What I’m also saying is no need for self-denial. No need for compromising on quality (cut quantity before quality). What I’m saying is there’s more to money than how large your savings account is.

    I’m saying you have to balance “weathering an emergency” and LIVING your life and enjoying life. I’m also saying it’s better to have an attitude of abundance, rather than one of scarcity.

    Jason can correct me, but when we refer to “living poor” I don’t think we mean literally that they’re poor in terms of money in the bank, but more in terms of the lifestyle they choose to live. Coupon cutting, penny pinching, etc. Yes they’ve chosen that, but I don’t think that’s ideal for everyone.

    Again some of this veers outside of finances into philosophical world view, but why live your life assuming a major catastrophe WILL happen? At some point c’est la vie.

    I say be able to handle minor/medium disturbances, then LIVE. Make your money active rather than passive. The goal of life is not to “have piles and piles of money in the bank”. By active I mean if I got 10,000 right now, as an example, $1,000 I donate to my grandmothers church, I’ll take my wife out to dinner, I’ll buy more people gifts this holiday season, use some to fund my business endeavour, take some language classes or dancing classes (i.e. learn a skill), and go over for a few days to the Aztec ruins in Mexico. Probably I’ll save at most $1,000 of that if I already have the 6 months living expense.

    I absolutely woulnd’t just bank 8,000 automatically, but that’s about different values I guess.

    Probably the same worry you get from not having enough in the bank right now to cover a MAJOR catastrophe, is the same worry I have that I’m boxing myself in, and that life will be dull and monotonous.

    I beleive I live my life in good faith, make friends, network, have an attitude of gratitude and abundance, that the problems will take care of themselves.

  16. Gail says:

    My writing comes not from worrying about the possiblity of a major disaster happening, instead it comes from knowing and living with the consequences of a sudden, severe disabling chronic disease that eats daily at my body and bank account. The daily grind of trying to make ends meet and cover health care expenses, etc. is devasting. It just hasn’t happened to me, it has happened to many people.

    I got married while making a good salary and having a decent middle class life. Three weeks later I got sick and life has never been the same. 8 years later I’m tired of the grind and really wish I had saved MUCH more so that these days would not be so hard financially.

    I guess I look at life from a much different prespective than you. I’m glad that you have the plenty to live and enjoy life. Many of us do not have that plenty, but it sure would be nice to have it.

  17. James says:

    First, i wanna say, SADIE you are one of my new inspirations and i love your posts and wisdom…..

    @Jason&William…Have you ever heard the expression,”Hope for the Best,but expect the worst”? That’s Gails point. If you live in the UNITED STATES you know that OLD rule of 6-8 months emergency fund dead and gone thanks THE GREAT RECESSION. The NEW rule is 1-2years emergency fund,but beyond that, when this recession ends…..are gonna go back to partying like it’s 1999? i would “Hope” people would see the lesson of this recession and plan and govern your finances so you won’t be stressed when you ..a) LOSE YOUR JOB. b)Get sick and lose your Healthcare and have to pay for your medicine OUT OF POCKET c)Have new bills pop up unexpectedly. You MUST be smarter and wiser. and save save save.
    Those same “Friends” your planning to lean on and even Family will greatly let u down if you think they are gonna come to your financial rescue. It’s about being PROACTIVE and not REACTIVE!

  18. Jenifer @ The Conservative Mom says:

    Wonderful tips. I only wish that my husband and I had known these when we got married. They would have saved us many years of heartache, of which we are still going through. Thankfully, it is never too late. We will keep on working at our debt. Thanks again for your wise tips.

  19. Jay Gatsby says:

    Jason & William make a valid point. You shouldn’t pinch pennies at the expense of living your life. If you’re in (bad) debt, then saving your pennies is highly advisable so you can get out of such debt. But once you’ve saved enough money to do so, and put away today’s 1-2 years of living expenses, then there is nothing wrong with throttling back a bit. Needless to say, you should also save for your retirement as well (10% of your salary). After that, enjoy your life. What is the point of dying with an extra $100,000 in the bank if you had to sacrifice experiences that would have enriched your life?

  20. teresa says:

    Your chosen lifestyle is one more people should consider, especially if it a choice. I live in a rural area in SD where most people live like this because they have to, not because they choose to.
    But we also choose to live in a place without a lot of job opportunity to enjoy the advantages that come with living in a town of 500.
    I have chosen to live in a small town, in a small house, buy used older vehicles and shop at Thrift Stores so I can stay home with my children. I can’t imagine dropping my baby off at daycare so I can afford to buy new cars.
    So anyway my point is every choice you make, be it to live frugally, take the middle road or just live for today, it is your choice so please don’t blame your parents or the govt on your decisions.

  21. Surviving says:

    Gail, here’s to surviving, from one who knows EXACTLY what you’re explaining, and you did a great job of doing so.

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