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Monday, June 7, 2010

Debt


When asked how we can even attempt a challenge like this, or why it would be impossible for others, car payments and credit cards are brought up. For us, that is one reason why we can attempt this challenge...we have neither.

We pay for our cars with cash and we buy used cars. When we bought our van last year it was the first time we took out a car loan. We wanted to pay with cash but the price was just a bit more than we had in cash. By negotiating, we offered them $2,000 less than their asking price if we took out a loan (apparently, financing was worth more to the dealership than cash) and they agreed. We paid off the loan in five months. Not having to worry about two car payments a month saves us hundreds of dollars.


We don't have any credit card debt. When we first married we had a credit card. We didn't use it for the first year. Then we moved several states away into a house in the country. We were living on less than $1,000 a month and all of a sudden we faced car issues, having to buy a riding mower to keep up with the HUGE lawn (mowing was a part of our rental agreement and there was no way we were able to keep up with the lawn with a push mower...believe me...I tried!), winter was coming and we needed a dryer, and so on. We didn't have any extra money so had to put these purchases on a credit card. It took several years to pay them off and we hated it. We hated paying on purchases that were years old and paying interest on these items. Once we paid the cards off, we cut them up. We have one card for emergencies but haven't used any credit cards in over three years. I can see how easy it is to get into debt and don't fault those who have to make an essential purchase (car repairs, dental bills, etc.) that they can't afford with cash. It's been said that the average American family has $7,000 in credit card debt. That is a big chunk of change that they have to pay out each month just for minimum payments. We are able to do this challenge because we don't have any credit card payments to make each month.

Those are two ways that we save each month. More ideas coming soon!

6 comments:

  1. I'm having fun following your journey.

    My hubby and I are debt free, except our home, and live on approximately $1500.00 a month by choice. I can't imagine going back to the days of car and credit card payments.

    Stephanie
    LR, Arkansas

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  2. Living in the country is not all its cracked up to be

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  3. Jodi-
    Sometimes I think you have to be rich to live in the country. While you can also save by growing a large garden and raising your own animals, it is much more expensive to buy a house with land, costs more to heat, more gas to drive to town, etc. Yes, we hope to have a little acreage someday but we do know that it will be a more expensive lifestyle. :)

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  4. We too have no car payments and our mortgage will be gone later this year. We paid cash for a 10 yr old car last month and it's a fabulous car. Well, it beats the 20 yr old one (which we are now getting rid of) and the 15 yr old one :).

    It's a great feeling!

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  5. Like you, I've bought my car outright (and used). I have a credit card because I like the security for making online purchases, but I *always* pay it off every month. It's just not worth it wasting all that money just paying interest.

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  6. We live in the country. I think it is a mindset that we have to live a certain way and be rich to live there. My $.02's, why do we have to mow so much when we have no neighbors to impress per say? (Elizabeth, I realize you had no choice.) I think having a cheap push mower and mowing around your home a little bit and where the children play is all that is needed. The long grass blowing in the wind is beautiful and very country like! I have no desire in losing my washing machine but are dryers a need or a want? Hanging clothes out in the summer is a great benefit all the way around. But so is stringing a line in your house in the winter and letting your clothes dry naturally. It really adds moisture to your household air. It is so much better on clothes as well. You would be surprised how fast they dry.
    Yes, we spend more money on gas but I do not go to town often. Again, I think that is a mindset that we have to be going all the time. But I believe it is cheaper living in the country because 1) our property taxes for five acres is cheaper then a decent house in town, 2)we do not have to pay for monthly water, sewer, or garbage pickup, 3) Our heat bills are much cheaper then living in town. Why? Iowa REC's have better rates then the natural gas/electric company in town. 4)We are able to mow what we want or not at all unlike town.

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