Our Debt Free Journey

These are posts I wrote a long time ago. But as the topic has come up again about how we went from living paycheck to paycheck to know being debt-free, I wanted to freshen the post. Enjoy!

I'm sorry it is so long, but I took all the posts and put them in chronological order.

Free at Last! . . . from Debt
10:43, September 20, 2006
I would like to share with you our family’s journey away from satan’s grip . . . debt. We are your typical middle class American family, well, maybe a little closer to the low-income class. We homeschool so I have the wonderful opportunity to stay home with my kids, but that also means we survive on one-income. As newlyweds we began obtaining stuff and the next logical item was a house. We bought a meager home in the country on a few acres (this was actually the house I grew up in). Since the house was old and in need of some TLC, we got a good deal on it: $65,000. (In our area this was a good deal.) We were able to get a loan but they wanted a down-payment of $5000. Now a young, one-income family with 2 children at this point did not have $5000. We did have $3000 thanks to our recent tax income refund, but that still left us $2000 short. So we borrowed money from a relative. Are you seeing the vicious cycle? But we only knew that this was the American way.

We lived in that old house and fixed it up to be a nice little home. After 4 years we were still just sinking in debt. The scary thing is that we didn’t have any credit cards either. We had some past credit cards that needed to be paid off, but we didn’t use them anymore. Our total unsecured debt was less than $2000, yet we still couldn’t keep our heads above water. My parents lived their entire married life in such a state – I believed there was a better way. Why live enslaved to debt while missing out on the fun things in life?

My husband and I sat down and made a plan. We were going to sell our home in the country and use the money to pay off all debt and buy a new home! How in the world are we going to do that? You ask. We were able to get $109,000 for our home, which left us with $42,000 after mortgage, realtor cost, and taxes, etc. With this large chunk of cash we paid off our only vehicle, bought a 2nd car cash, bought our new home, and paid off small miscellaneous debt. We also put $5000 in savings. Now looking at those numbers, how did we buy a house with such little money? Well you see, we down-sized quite a bit. We bought ourselves a 40’ 5th wheel for $12,000. It has served us quite well and we get to go where we want to.

Our new home as everything we need: full kitchen, dining table, living area, washer/dryer, master bedroom, bathroom, large front and back yard, and adventure. Now one day we do plan on settling down again – when we can pay for full cost of the property. No debt for us! Until then we plan on living out of our home on wheels. Living debt free is a wonderful feeling.

For some this may seem like a far cry from reality, but for us it became reality. We have had to sacrifice many things, but they are just things. Since our move we have started many activities with our kids we never had time for before. We now bike as a family every Sunday evening through the park and I bike with the kids every morning. We are trying out some family board games and making some of our own. I have been reading a novel to my 6-year-old son and he loves every minute of it. My husband had time to take all the kids to the shooting bench (for those uninformed this is a bench at grandpa’s house for practice, usually shooting at a self drawn target). We bought season passes for our local zoo and have enjoyed that many times already. The blessings are numerous, but the responsibility of more money is heavy.

Having money at my fingertips when I want it can be very dangerous. I love a good bargain and now am able to grab it up. But I have to really decide if the item is necessary. Living in a small space means few items. Since we homeschool in our home on wheels, toys for the kids and toys for parents are few, if any. Clothes are at a minimum and food must be purchased each week. So it took me a while to get used to having money available . . . ok . . . I am still getting used to it.

If freeing yourself from debt sounds like something you would like to do and are ready for some drastic changes, let me give you some guidelines to get your brain juices flowing:

EVALUATE YOUR CURRENT BILLS. Make a list of every expense you have. Break it up into how often it is paid (weekly, monthly, yearly, etc.). Pray over this list and consider which bills are necessary and which ones can be eliminated. Example: when we started this process we eliminated our long distance phone bill first. We both had cell phones so we didn’t need the extra expense of a long distance bill. My husband was self-employed so having a cell phone was important. We also chose to live with one vehicle for a while. We did this for about 8 months. This saved us gas, inspection, maintenance, insurance, and registration. I do have to admit that this decision happened with divine intervention. Our second vehicle died with only $300 left to pay it off. So we parked it, paid it off, and lived without it. It really was a blessing in disguise as we discovered the money it saved and made me stay home more and spend time with the kids. You may want to eliminate one bill at a time to allow time for adjustment.
FRUGAL LIVING. If you are not already familiar with this process, learn. You can save lots of money on groceries, gas, clothing, school books, etc. There are many books and internet sites on the subject. I’m not going to get into this here as it is a whole new subject.
KNOCK OFF DEBT. Now for the money that you are saving from eliminating unnecessary bills and frugality, use it to pay off debt. We used ours for paying off credit card debt. This is the hardest part because you are spending money but not getting anything in return. Reality is we are paying now because we chose to buy when we didn’t have money. If you are smart enough to not have credit card debt apply the extra funds to pay off a car loan early.
HAVE A PLAN. Be ready with a plan. If you plan on selling your house and down-sizing, start crunching some numbers. Talk to a realtor to determine your current homes worth. We chose to use a realtor, but if you are braver you can sell it yourself. If you don’t think that down-sizing is an option right now, start making some plans to pay off the mortgage payment. If you rent, find a smaller apartment and/or start a mortgage savings fund.

I hope these ideas help get your mind thinking. Downsizing to the 5th wheel was a big change, but has been worth it.

Our "Debt Free" Journey
10:02, May 7, 2007
Well it has almost been a year since we sold our house and moved into a 39’ 5th Wheel trailer. We may be cramped, but the experiences we have had that would have never been an option before our debt free life. Let me share with you a short re-cap of where we have been . . .

We started out at a country RV park in our local town. My husband worked for himself and did small construction jobs in the area. After two months, we moved four hours north to another small town. Because of our debt free lifestyle we were able to live on a non-profit deaf camp and help out. My husband was paid a small amount in trade for his labor – an amount we just couldn’t have lived on before. We were blessed with the opportunity to stay there for four months. Those four months gave my kids a wonderful learning experience! We were serving God through Isaiah’s Place, we were around deaf people regularly, we were riding horses at least once a week, and we built wonderful relationships. From there we traveled across three states to North Alabama where my mom had lined up a job for my husband. It didn’t pay much, but it was a good job. And we didn’t need a lot of money to survive, so off we went. The going part was fun, we took 5 days to travel and stopped and saw the sights.

So now we are here in Alabama and adjusting to our new life. We are still living in our 5th wheel trailer on my mom’s place. We are still debt free and God is still taking care of us. Through word of mouth, we have been asked to live in a small house in trade for fixing up the place. So for the last two weeks we have been tearing up old flooring and painting over ugly colored walls. Once the new floors are put down and the rooms painted, we will start cleaning and moving in. It is a small, old house, but homey. We are excited – there is even a shed for my husband’s workshop and a barn for my goats. A big plus is the big pond full of fish! God is good. We hope to stay here long enough to save money for our own place again . . . hopefully debt free.

Debt Free Update
04:05, August 4, 2007

I thought I would fill you guys in on how our debt free lifestyle is going.
Because we are able to live in this house rent free and stretch our legs a little, we were able to clean out the 5th wheel and try to sell it. Once the 5th wheel sells we will have a nice downpayment for a house. Don't worry, we wouldn't spend this past year debt-free to bury oursleves in debt again! Our plan is buy a small fixer-upper with a 5-10 yr note and then turn around and sell it. If we live in it for 5 years and pay it off (or come close) we will have a hefty down-payment for a piece of property where we can start our homesteading lifestyle again! The hefty part is important because we hope to pay for at least half of the property and only borrow for the remainder. That is the plan anyway, but if you have been following my blog often, you know that things will change!

We have decided to move back to Texas for many reasons, but one of them is that we can make more money there than we can here. So we should be able to save more. Don't take me wrong, we have been able to save quite a bit living here due to having no big bills, but we could pay off a house quickly living this way in Texas. Our end goal is to own property debt free in 10-15 years. Then we will be free to invest in our homesteading lifestyle, which in the end would also save us money!

So there is a short update.

October 8, 2008
Well we decided to keep the 5th wheel and move back to Texas. We moved into a rent house and still have the 5th wheel. We are still debt free. Which is a good thing during these economicly uncertain times. Although we only have one truck, although we are living paycheck to paycheck, although we are still on a tight budget, we don't owe anyone money. That is a good feeling! You can check out pictures of our 5th wheel here.