I have decided to do a series of posts, ten in all, exploring the concept of living debt free. This is the first post in that series.
Defining Debt Free
Let’s assume that I take my daughter to the doctor. I schedule an appointment, my daughter sees the physician, I give my insurance card information to the doctor’s office manager, and then my daughter and I go home. Three months later, I receive a bill from the doctor, for the balance on my daughter’s account, the portion not covered by insurance. Technically, this bill is a debt – a debt that I owe and a debt I am obligated to pay.
Let’s now assume that I take my son to the movies. I reach for my wallet and find that I’ve left my cash at home – and all I have is my credit card. The movie starts in two minutes, so I swipe the card and buy our tickets. A month or so later, I get a bill from the credit card company. This bill is a debt – a debt that I owe an a debt that I am obligated to pay.
Let’s further assume that a friend approaches me and asks me to sponsor him in a 5k charity race. I sign up for a per kilometer donation. Two months later, my friend’s charity sends me an envelope in the mail, with an invoice for the amount I’ve pledged. This is, again technically, a debt – a debt that I owe and a debt I am obligated to pay.
It’s nearly impossible to function in the modern world without monthly bills, future monetary obligations, and some type of “debt”. So, for the sake of this series, here’s how I will define debt free:
I am living debt free when I can meet all of my financial obligations without paying interest or making loan installment payments.
Hopefully, the above makes sense. Basically, I do not want to borrow money in order to make purchases or afford services. Instead, I want to pay for the things that I want, need, and use. Personally, I do not use a credit card – but it would be possible to live the debt free life and use a credit card – assuming one was paying off credit card balances, in full, at the end of each billing cycle.
Considering THE MORTGAGE
Now that I’ve defined living debt free, it’s important that I mention THE MORTGAGE. (That’s how I see in my mind’s eye – THE MORTGAGE.) A few months ago, we purchased a new house, so we have a mortgage. Technically, we’re not debt free. We’re debt free – except for the mortgage. I do have a plan in place to pay off the mortgage early, but it’s always important to remind my readers that we do have this debt on the books.
For the purpose of this series, I’ll focus on non-mortgage debt: car loans, student loans, personal loans, etc. Basically, I want to explore life without consumer-debt.
Exploring Pros and Cons
Now that I’ve defined living debt free and mentioned the mortgage, I’ll get to real purpose behind this series. I want to share my own four-plus years of experience living debt free – and let you guys know some of the pros and cons associated with this type of life. You might be surprised by some of the things that I have to say write.
I’ve outlined the series and I’m very excited about it. It’s been a while since I’ve written regularly, because I had grown tired of the same-old-same-old type of blog post. From this point forward, I’m just going to write posts about which I am passionate, exploring this journey that I’m on. I hope you’ll stick around, subscribe to No Credit Needed, leave comments, follow me on Twitter, and enjoy what you read. Rock on!
I’m new here, but I’ll stick around because I like what you’ve said so far. And I’m curious what you’ll have to say or write, that is.
I like how you live without a credit card. I do too. I noticed on a lot of the money blogs that sometimes there will be dozens and dozens of comments from people who say they pay all their bills with credit cards. Honestly, it gets irritating to read these types of comments all the time. I’d rather hear an alternative point of view.
I am looking forward to your posts. I have been reading a lot of blogs on the net for the past year and it does appear anymore to be the same things over and over just re-written using different words and fancier terms. I have actually stopped reading so many of the blogs that I had gotten used to and now expanding my horizons because quite frankly I am becoming bored.
Can’t wait to read your future posts. Thanks for a great blog!
Wow Victoria, you sound angry. I suggest that people do what’s right for them. If they don’t have the discipline to only spend what they can pay for at month end, I’m happy that they decide to use cash.
For budget tracking, I love being able to download the last year’s worth of my card transactions and sort to see exactly what I spent in each category.
The perks I’ve gotten over the years don’t influence me to make purchases I wouldn’t otherwise make. But it’s nice to see my 11yr old’s 529 account balance at $7000 funded from the cask back reward card. It’s nice that when we plan our next vacation I’ll use miles to pay for a plane if we fly.
I love your post and I’m excited to see your outcome.
I have always wanted to live debt free. I do have a lot of debt at the moment but I came across the agency that has blogs helping people to manage debt better and have companies listed on the website that are quality. The agency is called the alternative loan machine.
I think I’m ready to join you on your quest to living debt free 🙂
Not angry at all. Just nice to read a different point of view.
I’m all over this one!!
I have had all my money ran through the same bank for 20 yrs.
I have always paid the bills! Well ,that was when I was married. I have been divorced for two years and I assumed all the bills. I was still living the same way. I put myself in a bad situation. I went to the bank they denied me anything and everything I wanted No mercy!! I lost 500 bucks to have my home apraised only to find out it is under mortage. Dang! I just can’t win. Really that was a blessing, If I would have refinanced to pay off my dept I would be in an even bigger hole. I still have the Job I have always had and love.
So I have been on a journey for the past year to pay all this stuff off. Except for my home. April 2011, I will have no more credit cards or loans. I have been doing this all on my own. I am all alone no one will help because of my income.
Funny, I’m reading about it now. It was just something personal I wanted to do. I tell ya my stress level has declined dramaticly. Now if I could only do something about the tax deductions out of my pay!! LOL.