A Debt Free Life and the Value of Relationships

One of the “bucket list” goals that I set at 30 was to be debt free within ten years.  It was an interesting goal (at least to me), and one I could never hope to accomplish alone.  In reality, my wife was the one who did most of the work to make this goal a reality.

We had just moved from Tucson, Arizona to Sacramento, CA when we turned 30.  This was in the late 1980s, just after the Keating Savings and Loan debacle, so we moved back to California with virtually no assets and seriously in debt.  When we determined to be debt free (well, actually we expected to still have a mortgage) we discovered a couple of basic principles about successful debt reduction: 1. Create a budget; 2. Commit to pay down debt; 3. Pay cash for most expenses; 4. Don’t spend more than your (after taxes) income; 5. Don’t try to impress anyone with possessions.

These principles seem basic (they are) and easily discovered (they are), but seem to elude many young couples – they eluded us for several years.

We began by setting a budget, then began paying down our debt that carried the highest interest and/or had the shortest pay off.  We stopped impulse buying and used cash for virtually everything we chose to purchase (including cars – eventually).  We began to live well within our means (in order to buy down our debt more quickly) and purchased a fixer upper home in a nice neighborhood (more on that in a later post).  We bought cars we could afford and quit buying a new car every six months or so (embarrassingly true).

If this all seems simple to do, it’s not.  It required a commitment to not buy every shiny thing we saw.  It also required a commitment to quit caring if our home or cars were as big, or fancy, or modern as those of our friends, but we also decided to love what we could afford and celebrate with our friends when they made their purchases.  In short, without realizing it, we really were committing to live pretty stress free lives.  My wife and I grew closer together and we were able to be virtually (still have a small mortgage) debt free within about five years.  This has given us freedom to move when we have wanted to do so, change jobs when we feel like it, spend more time together, depend on each other rather than things, and make donations to charities when it’s needed – investing in the lives of others rather than in stuff that will rust – without fear of not being able to pay for the stuff we have accumulated.

Accomplishing this goal was easily the most satisfying and brought with it a realization of the value of relationships over possessions.  Not a bad lesson to discover while doing something so basic.


7 responses to “A Debt Free Life and the Value of Relationships

  1. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

    You are too kind. Thanks.

  2. Pingback: Relationships and debt « Later On

  3. You have a very interesting list. I love the Middle East Entry.

    Thanks. Keep plugging away on your list. Thanks for checking in.

  4. If more couples lived within their means I think there would be less divorce, no? The only debt we have ever carried is a reaonable mortgage and we’ve never fought about money. Great post.

    It seems to me that all of life would be easier if we would invest our energy in people instead of things.

  5. Hmm…these principles could be more firmly rooted in my life. I don’t do too bad, but I have yet to achieve “freedom” from debt (car and student loans). Still, I appreciate how simply you laid all this out!

    Student loans are the killers – so much money, so little interest.

  6. Very good blog…and congrats on getting out of debt!!! That is something that is on my list of things to accomplish. ASAP

    Thanks, you are kind. I wish you well.

  7. This post comes at the perfect time. I just got married, and while my husband and I both have debt, I’m hoping we can pay it off in about 1 year (5 years if we don’t get second jobs…but I was to be stress free NOW). Of course, we’ll still have a mortgage, but with no credit card debt, we’ll have more freedom to do what we want. I think this is a big secret in life, or perhaps not so secret, but not appealing to the Have It Now generation. Once we’re debt free, I’ll be singing from the rooftops!

    It’s huge, particularly in a new marriage. It seems that most stress (and second jobs) revolve around debt – and you find yourself still paying for things you have either already done or don’t even own anymore. There is also something satisfying about being able to write a check for a car and knowing that you have paid the actual price for the car (and not doubled it with compound interest).

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