Here is our current plan to live debt-free and stay debt-free –
- We fully-fund four retirement accounts – my wife’s Roth IRA, my wife’s Pension Plan, my Roth IRA, and my 403b.
- We save money for future ‘major purchases’ – newer cars, new furniture, new appliances – in our ING DIRECT Savings Account.
- We are saving for a future home purchase in our brokerage account.Â While not as tax-efficient as our retirement accounts, we have ready access to this money.Â Should we need to purchase a home before we can pay full-price, we can use the money in this account for a healthy down payment.
We live on a strict budget, we fully-fund our retirement accounts, and we save as much as we can for future purchases.Â Instead of making payments to an automobile loan, we make a ‘car payment’ to our savings account.Â Instead of making mortgage payments to a mortgage company, we make a ‘mortgage payment’ to our brokerage account.
I like having interest and time work ‘for me’ and instead of ‘against me’.Â Now, when I want to buy something, I save up for it, and then I purchase it.Â Radical, I know! 🙂
2 thoughts on “My Life After Debt”
Love it. Can’t wait to be there myself! Hopefully just a few more months with school loans…
Dave Ramsey has a good video clip out there explaining the same car plan – http://www.daveramsey.com/etc/lms/drive_free/player.cfm
The nice thing about your brokerage account is that it can act like a backup emergency fund!
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