I'm an English
teacher at a US public high school
I refuse to have any
debt other than my mortgage, and I'm paying that off early.
No credit card (debit only: when I slide that plastic I'm spending my own money, not taking out a loan for dinner).
I have no
consumer debt. None.
Small, practical, 30mpg, car that I bought new fifteen years ago and have been driving ever since. Turned 135,000 miles today, as a matter of fact. I'll get 200k before I have to think about another engine/clutch, and then just keep going. Now the only cost is fuel/oil/tires/minor repairs
like a timing belt every 60k. I'll never buy another new car: riding the depreciation down is just stupid. I'm totally immune to high-ticket status possessions. A car is for transportation, not impressing some jackass at the stoplight that I don't even know.
Oh, by the way: you don't need that SUV, you consumerist sheep.
I live in a 1000 sq. ft. condo that is more than I need by myself. It has appreciated in the last decade to 400% of its purchase price
. The mortgage is modest.
Because I refuse to go into debt, even for big-ticket purchases, I saved seven thousand dollars a year for five years to buy my modest yacht with cash. (I was disappointed that I couldn't save ten thousand/yr.). She's mine free and clear (boy, that feels good!), and everything I need, or will be, when the upgrades are all in, to get me to retirement
in fifteen years. By then I'll have enough for the bluewater boat, if that's what I decide I need at retirement
I have a budget
. Every dollar has a specified job to do, and nothing gets spent once the money earmarked for a category is gone for the month. I established a $1,000 cash emergency
fund that grew to three months of net income
, then six months of net income. It doesn't earn much, but it's liquid. Now that I have no debt, I have a healthy surplus every month that goes into a couple of good retirement vehicles and paying off that mortgage. The boat costs, including upgrades and building surpluses for bi-annual bottom-painting haulouts and upgrades, are figured into the budget
Delayed gratification and cash are king. You become master over yourself and your finances. No offence, but "good debt" is an oxymoron (mostly moron).
Most people have too much house, too much car, eat too many meals
out, spend too much on entertainment, have too many clothes, too many revolving credit card accounts (with rediculously high, ego-boosting limits) too many loans, too many bills, no cash reserve, go deeper into debt an avg. of $400 each year, and and have three yard sales of junk lying around that they don't use or need. Spending is a national obsession.
Debt is foolish. Not knowing what you spend is foolish. And living beyond your means when you should be investing in your future wealth during your wage-earning years is catastrophic. Most people are shocked to learn what they spend on out-of-the house meals
(everything that goes into your mouth: Starbucks included) and entertainment each month. I see very few movies, because so much of it is garbage. Good books
line my bookshelf. I still have a healthy social life. The single
women are impressed when I bring a casserole to the church pot-luck.
And I've never been happier about my money or my financial future. You can get control, too. Visit daveramsey.com
and imagine the possibilities.