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Fordman:

--- Quote from: javeryh on March 23, 2011, 04:43:09 pm ---This is insane.  How are you doing this on $60,000 a year???    If you don't mind me asking, how much did your house cost?  I guess that is a huge factor in all of this but even still, 5 kids aren't cheap.  Do you have any savings?  Kids' college funds?  I am super strict about spending but it is still hard to get ahead of things and we do pretty good with our combined jobs...

--- End quote ---

We dont always buy new. We use coupons at the grocery and make a menu prior to shopping. My house (2250 sq ft in a rural area east of Cincinnati, OH) was $152,000 when we signed for it. We pay a 1/2 payment on our home every 14 days. The interest cycle is a 14 day cycle instead of a 30 day cycle. We dont eat out in restaurants except 2 times per month. We have a Christmas club account with a set dollar amount and when the money is gone, its gone, we dont spend another cent on Christmas. Our kids use alot of hand me downs. Play video games that are 2-3 years old and used.

We arnt cheapskates, we just want our home to be paid for so NO ONE can make us move if we dont make payments.

It has taken us alot of dicipline to achieve a debt free lifestyle. We pay cash so we know its ours.

When the house is paid for, we plan on doing alot of redecorating and doing alot of the things we have been putting off for the last 10 years. And we're gonna pay cash for it all!

Fordman

danny_galaga:

--- Quote from: Donkbaca on March 23, 2011, 05:27:13 pm ---depressing.  I drive a 2008 bmw, my wife has 2006 bmw, we live in a gated community on a golf course in a house way too big for us.  I have enough money and credit stashed away for a rainy day, we have equity in our home, I have a 401k, a 529 for my daughter, and we barely make over 100k a year.  How can we have all of this?  Through the smart use of leverage.  For example, the cars are financed for as long as they will let me finance them out, why?  because I am paying 1.9% interest.  Why would I plunk down cash for our cars, that are depreciating every day, when I could instead put that money towards my daughters 529 that has returned around 9%?  You don't pay cash for assets that depreciate in value, especially when you can finance them at a rate that is lower than inflation, its throwing away money.

--- End quote ---

See, I'm in the 'if you didn't buy it with cash, you don't own it' camp. There's absolutely no joy in borrowing money for a car to me. You turn X dollars into X/2 dollars in five years. Now THAT is depressing!

I paid $2500 for my car, and that makes me much happier than pretending to own a luxury car. For you, obviously pretending to own a luxury car makes you happier. Horses for courses. I won't criticise you. Give me the figures for your car finance. See which is cheaper. Who is able to put away more for investments, super annuation etc? You can't really say your way is the right way and that's that.

Reading Fordmans post rings true with me. And it reminds me that there is little pride nowadays in owning anything. I'm going to sound like Gramps, but when I was young, if you didn't have the money, you didn't buy the thing. You saved, and then you bought it, and it felt good to have WORKED to buy this object. Now everyone wants the instant gratification that credit gives. But buying stuff on credit is just not a very satisfying feeling for some people, like me and Fordman. The only thing that you might have to borrow money for is a house, which I have.

My house is paid off next year by the way. Bought at 200K, now pushing 600k. Took maybe ten years of not driving BMW's  ;)

There is absolutely no way you would convince someone who is going to have paid off their house in the next year or so that no, it's better to let 'the man' keep owning it...

HaRuMaN:

--- Quote from: pinballjim on March 24, 2011, 09:28:54 am ---student loans are low interest

--- End quote ---

Not necessarily.  I had federal student loans, APR was close to 7%, so I payed them off in 3 years...  saved myself over $50K in interest payments.

javeryh:

--- Quote from: Fordman on March 24, 2011, 03:37:10 am ---
--- Quote from: javeryh on March 23, 2011, 04:43:09 pm ---This is insane.  How are you doing this on $60,000 a year???    If you don't mind me asking, how much did your house cost?  I guess that is a huge factor in all of this but even still, 5 kids aren't cheap.  Do you have any savings?  Kids' college funds?  I am super strict about spending but it is still hard to get ahead of things and we do pretty good with our combined jobs...

--- End quote ---

We dont always buy new. We use coupons at the grocery and make a menu prior to shopping. My house (2250 sq ft in a rural area east of Cincinnati, OH) was $152,000 when we signed for it. We pay a 1/2 payment on our home every 14 days. The interest cycle is a 14 day cycle instead of a 30 day cycle. We dont eat out in restaurants except 2 times per month. We have a Christmas club account with a set dollar amount and when the money is gone, its gone, we dont spend another cent on Christmas. Our kids use alot of hand me downs. Play video games that are 2-3 years old and used.

We arnt cheapskates, we just want our home to be paid for so NO ONE can make us move if we dont make payments.

It has taken us alot of dicipline to achieve a debt free lifestyle. We pay cash so we know its ours.

When the house is paid for, we plan on doing alot of redecorating and doing alot of the things we have been putting off for the last 10 years. And we're gonna pay cash for it all!

Fordman

--- End quote ---

Ahhh, makes more sense now.  $152,000 is crazy!  I think I need to move to Cincinnati (although I don't think I could stand having to watch and read about the Bengals all the time - yuck).  Unless I want to commute 2 hours to work each way moving really isn't an option.  The real estate prices around me are out of control.  Plus, the kids are in school and we don't want to uproot them and our entire family is on the east coast.  I guess I just have to accept that life in and around NYC is ridiculously expensive.

HaRuMaN:

--- Quote from: pinballjim on March 24, 2011, 09:37:40 am ---
--- Quote from: HarumaN on March 24, 2011, 09:33:18 am ---
--- Quote from: pinballjim on March 24, 2011, 09:28:54 am ---student loans are low interest

--- End quote ---

Not necessarily.  I had federal student loans, APR was close to 7%, so I payed them off in 3 years...  saved myself over $50K in interest payments.

--- End quote ---

Right, and what was the market rate on loans when you got 7%?

 ::)

--- End quote ---

Hell if I know, but I wouldn't call 7% low interest

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