“Over the years I’ve made a lot of financial mistakes, but I did one thing right. I got out of debt. Completely. Paid off the 2016 Grand Cherokee, kept the 2000 Grand Cherokee, paid off all credit cards, paid off the house. Zero debt—except for the annual extortion property taxes. With the help of a frugal wife we’re able to save almost $1,000 a month out of our meager retirement income. Spending less than you make is a great addition to a debt-free life.”
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Bravo!
If I were to describe our situation it would be almost to the word identical. Seven years ago we were in a fairly deep debt pit, today we are 100% debt free including mortgage, have 6 months income in savings and putting +20% of our net into our 401Ks and cash flowing our home projects. Our debt when we started paying it off was in the mid 6 figures.
One of the beautiful things about it is the experience of paying off that amount of debt required that we create a zero dollar budget and stick to it. Now that we are there it has become a habit to save money and live below our means. The reduction in stress is amazing, the knowing exactly what our monthly expenses are and having some funds available for unexpected expenses is fantastic.
I feel way more certain about the future in spite of all the crap that is happening. While we are not happy about inflation and feel it is a fabricated crisis, I have to say that it hasn’t really been a big problem for us.
Digging ourselves out of the pit was very difficult. Our social life went down to zero. One of the things that helped us especially in the beginning was we simply stopped borrowing money, stopped using credit cards. Today we have more money in our HY savings account than we had credit limits on our cards.
The thing that people don’t understand or refuse to believe is that it is possible to pay off your debts and live debt free these days. It requires discipline and a goal. No one that I know who has climbed out of the debt pit has told me that they miss to good old days of overwhelming debt. We have learned to determine “wants” from “needs” and save up for the “wants”.
I taught my kids the difference between wants and needs. Take care of the needs now and the wants later.