We’ll Never Borrow Money Again {except for a house…maybe}

If you missed the first post in this series, you can check out How We Became Debt-Free {real numbers + our top 6 tips}!

When we started paying off debt, our WHY was two-fold. We didn’t want to be dependent on lenders for the things we wanted, and we wanted to be able to go to one income, so one of us could stay home to raise our kids. We knew being debt-free would feel good, but we had no idea how good it would really feel.

Here’s why we’ll never borrow money again {except for a house…maybe}:

We like owning what we have: If you owe money on something, is it really yours? The thought of someone coming and taking our things in the event that we fall on hard times and can’t make payments is scary to me. We paid cash for our car, so it there’s an emergency, we don’t have hundreds of dollars tied up in payments every month. We own all of our electronics, including our cell phones, our furniture, our 4-wheelers. Everything.

We have an emergency fund: When people find out that we don’t have credit cards, they’ll ask what we would do if there was an emergency. We have an emergency fund. For us, we’re comfortable with around $12,000-about 6 months worth of expenses-tucked in a money market account. That’s money that we’ll never touch unless there is an emergency and a big one. We also have a smaller savings about-about $8,000 right now-that’s for smaller “emergencies” that come up, like seal coating our driveway or fixing the muffler on the car (both happening this month).

We’re comfortable on a smaller income: When we decided to have kids, we knew that one of us was going to stay home to raise them. As a teacher, my job is stable, and I get a lot of time off in the summer and for holidays, so I work and my husband stays home during the day and works part-time nights and weekends. We both get to be home a lot during the summer, and being debt-free allows us to live on a smaller income. Sure, we don’t have everything that we want, but going without some things that fall under the “it would be nice to have ____” category, gives us more time with our kids and with each other.

We might borrow money to buy a house: The thought of saving up $100,000+ is daunting, especially on a relatively small income, so we’re not totally opposed to taking out a mortgage. In contrast to things like cars and boats, houses go up in value, so we wouldn’t lose any money on the purchase of a home. The thought still makes me a little uncomfortable, and I wouldn’t really feel like I owned it until it was paid off. But, right now, we’re just going to save as much as we can, so we can be prepared to put down a down payment if an opportunity opens up. Otherwise, we’ll just keep saving and maybe have enough to pay cash when the time comes.

Taking care of a family is scary, and it’s even scarier to think that if something happened where would couldn’t work, creditors would come looking for their money. There is a peace of mind that comes from knowing that we don’t owe anyone any money, and once we had that peace, we never want to be without it.

If you want to read more about handling money as a couple, check out How to Handle Different Financial Styles in a MarriageSimple Tips for Discussing Finances while Dating and Engaged, and Combining Finances.

 

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