It’s taken a lot of years and a lot of fiscal restraint, but it has been worth it. There is a great feeling in being able to say “We’re debt free!”. If you’ve ever listened to the Dave Ramsey show, you’ve no doubt heard the exuberance in the voices of those who are able to say it.
My eyes were open to the evils of debt back in 1992 when I left my job with IBM and sat down with a co-worker with whom I was considering partnering in buying a business. He had been a manager – I had not; yet IBM saw fit to pay me a higher wage. Therefore, I had to be better off financially – right? Wrong! DEAD WRONG!
He and his wife lived with a simple plan. If they couldn’t pay cash for something, they didn’t buy it until they could. The only exception to that rule was their home, which was modest by most IBM managers’ standards.
Bottom line: he had almost a half million dollars of assets that could be liquidated. I was lucky to have one hundred thousand.
It made me look back at all those minimum payments on credit cards. I figured I had given the banks over two hundred fifty thousand dollars in interest payments over the years. Had I not wasted that money, it could have been invested and paying me interest.
Ever since that time I’ve worked to reverse that trend. I’ve driven cars until they fall apart and then replace them with new used cars. I take my garbage to the dump and pay 50 cents per bag rather than paying some guy in a truck $20 per month. I could be considered cheap in many ways, but I really don’t care; I am out of debt!
And that does not mean we are now rich. It simply means we do not owe anything that cannot be paid in full to avoid interest charges. We still have to pay the electric bill, the phone bill, the water bill, and the credit card bills.
Yes, we still buy things on credit, only so our money can gain interest until we need to pay the bills.
More importantly, we are now working on building our emergency fund and putting money away for our retirement.
One of my main reasons for reaching this point in my life is based on seeing elderly folks forced to move in with their adult children because they are no longer able to live alone and cannot afford to live in an assisted living facility. I’ve also seen elderly people who have made the effort to cover their own “end-of-life” expenses. They made it much easier on their children.
My bride and I both have long care insurance to help pay for nursing care as needed. We’re also building up the funds so we can afford to live on our own as long as possible.
Someday our children might thank us for being so frugal.