Do you ever dream of what living debt-free might be like? I did too and now that we are I want to share what living debt-free really looks like for the average middle-class family.
Before we were debt-free, I had this idea in my head that once we were debt-free, we would never worry about money again. My husband would work a 40 hour work week, and we would have money and time to spare. We would live on a small acreage with farm animals and a vast garden to give us fresh food. I could go on, but you get the idea. I was thinking of a debt-free utopia; not at all realistic.
Now that we are free of debt I know that although some aspects of my debt free dreaming were right, most were not.
What The Debt-Free Life Really Looks Like
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1. You Still Discuss Money Often
My husband and I always talk frequently about how much money is coming in and setting priorities for where it will go.
We still keep a running list of non-monthly expenses that will be coming up as well as non-monthly wants so that when extra money does come in through overtime, bonuses, or blog money we use it wisely and not give it to restaurants and Target.
2. You Still Keep A Budget
Our budget is a simple piece of typed paper broken into monthly recurring payments like property taxes, insurance, utilities, and other set payments as well as a set amount of money for food, clothing and other more flexible (yet still needed) expenses. When we get slack on keeping ourselves accountable to our budget, we spend way more than we should and end up not reaching the financial goals we desire to achieve.
Side-jobs are vital to debt-free living here are 12 anyone can do
3. You Still Have To Work Hard To Pay The Bills
My husband is an RN. Shortly before we became 100% debt-free, he was offered a nursing job in another department of the hospital that was a lot less stress than his current position in the ER at the time. In the switch, he lost his evening hour pay and his weekend pay. He also couldn’t work his second job around the new position hours.
The pay off was a hubby who enjoys his work days more and is home with his family more hours per week. The cost was that we broke even financially, meaning the cut in pay equaled the payments we no longer pay. Our budget is essentially just as tight without payments as it was when we had payments.
We chose family time over a bigger paycheck and to do that means sacrificing the extra money freedom that I thought all debt-free families enjoyed. You know–the one you hear all the debt free advisers on the radio talk about. “Think of all you could do with that money you will no longer be using for payments!” We traded that money for time.
My husband’s basic pay each month pays for our “needs budget”–mainly our food, shelter and transportation bills with little wiggle room for other bills.
Thankfully due to investing some of the inheritances we received into rental units we have that monthly income to pay the kids for chores, give my husband and I some spending money and pay for a few activities for the children each month.
My husband also often receives overtime and I earn a small yet above minimum wage income from blogging. These streams of income plus bonuses my husband sometimes receives at work pay for our “unexpected emergency needs” and a few things from our “want it” list.
We feel pretty blessed to meet and sometimes exceed our bills each month. God is faithful to provide for His people.
4. You Might Not Live In A Grand Home
I have no idea why, but for some reason before we were debt- free I always thought that all debt-free people lived in great neighborhoods in fancy homes or could afford all the expenses that come with country living. After reading The Millionaire Next Door I know that isn’t true for all those living debt-free lives–including ourselves.
We live in a very average home that we bought for just under 10,000 dollars–nope, I did not forget a zero. We purchased the house for ten thousand dollars, then spent two years and $30,000 remodeling it from top to bottom by ourselves.
We got a home for under $10,000 because it is in a so-so neighborhood. We really don’t mind though as the location is so near to everything it saves us a lot of time commuting, giving us more time at home together and we set out on our journey to being debt free to do that in order to have more family time.
The house that was once next door to us was once quite the sight to behold (the picture above this section was the view of the house next door from my dining room window). After many years of praying and waiting, we were finally able to purchase that ugly house next door and take it down, creating a beautiful side yard.
5. You Do Worry Less, But You Still Worry
A few months ago my husband came home and told me his department was being bought out by another company and that he wasn’t sure at that point what was going happen.
Before being debt-free with a three month emergency fund and multiple income streams, that type of statement would have sent me into worry mode.
Now with no payments and three months’ worth of income stored away and more than one source of income, I just looked at my husband and said, “God’s got this, no worries. You are a great nurse, we will be okay,” and I 100% meant it and slept peacefully that night.
Everything did work out and he is still working.
However, there are still days when I wonder, “How are we going to afford the glasses the boys need, or the bill for my daughter’s emergency tooth extraction, or the ingrown toenail bill,” but God takes care of that too. It never fails that just as the bill comes due, the money becomes available.
6. You can give more (and that is my favorite thing)
My favorite thing about being debt-free is how much easier it is to give. To help a person out and not wonder “If I give this can I still afford to pay the payment for…by the 15th of the month when it is due” is a very freeing feeling.
When you are debt-free, you have more control over your budget and say about where your money can go and if you wish to give, you can.
Yes, I know I said above that our budget it still tight and that is true, but it seems like whenever we give, God takes care of it and we once again pay our bills and have a bit left over for wants. We are blessed.
In fact, I set aside a portion of my inheritance specifically for giving. God allowed my husband and I to help out people in impactful ways with that money and I pray continually that He will use our family to give in that way again. To me, giving is healing.
Update: One Really Cool Benefit Of Staying Debt-Free And Keeping Your Expenses Small
I wrote this post when debt-free living was still pretty new and fresh, now we are several years into it and I wanted to add one more point–If you stay debt-free, keep your expenses small and keep growing new and ongoing income sources, you will get to a significant benefit of debt-free living–choices!
Choices such as buying a bigger and nicer home or helping the kids out with college or buying another rental unit or taking a five and a half month RV road trip across North America as a family. And yes, both of those last two are real-life examples from our family.
Read More About Our Debt-Free Journey:
- Why I Rarely Talk About Our Family’s Journey To A Debt-Free Life
- Our Debt-Free Story Part 2: Back Into Debt & Out Again
- 10 Tools To Help You With Your Debt-Free Journey
Available in paperback and Kindle on Amazon–get your copy here!
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I appreciate this post. I long to be debt-free and we are trying to figure out how to get there. My dreams sound like what yours did in the beginning so it is nice to hear the reality of it and know that it is still SO worth the effort to get there!
What a great post! I think number 6 will be my favorite, too. We are on our way!
Thank you for such an honest post. I just approached my husband on really working on knocking out the mortgage. We have always talked of moving to land away from the city but in reality, what we have allows me to garden heavily, we have decent neighbors that don’t complain about my “illegal” hens and ducks and the yard is large enough to also accommodate our great dane easily. It has plenty of room for all of my sewing business needs and is located close to everything. SO, I suggested we stay where we are for the foreseeable future and make the best of all of it. And if the kids need to move back home, we are located close to all of the major corporations for jobs and have the room here for everyone to have space. Nope. not my dream, but close enough and the payoff of having no mortgage (or any other debt for that matter) will be well worth it. Again, thank you – I needed to see this today!
Your welcome, and I have always loved great danes! There is one that greets me every time I bike through his neighborhood and I am always amazed at just how big and yet beautiful they are.
I love your post because it is real… and realistic. Coming from another country (a different perspective), I grew up knowing these basic principles, but they are not so obvious in this society. Kudos to you for busting these myths. Millionaires practice these same principles, that’s how they became millionaires in the first place (or someone in their family did).
we are debt free for one simple reason. My husband is a saver. His parents sacrificed to put him through college, so he was very lucky not have had that expense. But he still worked through school and is probably the only person I know to have left school with a savings account. It’s true what they say about starting early. We didn’t meet until we were in our 30s. He was debt free and I wasn’t. When I knew we were on a permanent path I began frantically trying to get my finances in order. After we married and he went through my bills I was shocked to find how much savings he was able to find by reading the fine print. He found about $60 a month that was wasted on fees and unnecessary expenses. It was all a dollar or two here and there. The biggest thing that I’ve learned from him is that the pennies matter. Even though we have a healthy savings account and can now save about 50 percent our income we still are very mindful of every expense big or small. We live in a nice neighborhood next to a much nicer neighborhood, I’m sure most of my neighbors think we are struggling because we live frugally and not lavishly. But being savers and not spenders is a state of mind. I’ve adopted my husband’s philosophy and while we still argue about money occasionally it’s not coming from a stressful place but rather the how to get the most bang for our buck or need vs want. I’ve sacrificed my old ideas about what it means to be wealthy. People not things make you rich.
I so agree with “people NOT things make you rich”. After my mother passed away, I really learned that more than ever as we went through her things. It amazed me what few “things” she owned I felt real attachment too, and those that I did were only because they held a memory of precious time spent together. It was those realizations that engrained in my mind that we were going to use the inheritance she gave us in a way that gave us “more time together” not “more things”.
My Grandma lived in a house like your neighbors most of her life. Her riches were not monetary but pure love and the most wonderful biscuits in the world. My husband and I live in a small single wide trailer that needs work. Our plan is to save, buy a trailer that will last longer, and become free of all debt. The ability to give more is such a wonderful bonus of getting our finances in order. Your post is beautiful and inspiring. It is comforting finding others who recognize the importance of a better way to live. I wish you a blessed day. Thank you.
Thank you for your kind words. It sounds like your grandma was a very special lady.
I am always looking for inspiration to live without debt and manage money wisely. Your points are great and very helpful.
My debt-free experience is very similar to yours. We have been debt-free for two years, ever since we paid off our mortgage. Because we too have prioritized family time over extra income, our combined income has gone down and we still definitely have to be careful, budget, go without, and worry about money. I love my home and I am able to see ample beauty in it, but I could go through every room and make a list of projects I would like to finance. But family time is the priority, so we keep plugging, and it is well worth it.
Yes, family time is so precious. My eldest son turns 19 tomorrow and has his first real job interview on Monday. I am so glad for every family moment we have gotten to share with him over the years. I know he won’t be in our nest that much longer.
This was such a wonderful post, first because you have put your Lord and Savior first. He does not want us to have debt, plain and simple. We should be indebted to him and him alone. You have started giving money away, another thing Jesus ask us to do. Do you know how blessed you are? You’ve got it, you’ve figured it out! Jesus never promised us riches except what he gives us in blessings and you are getting those. He gives you those blessings because you have been obedient and there are not many people out there these days. My husband and I made the same commitment, we are still working on debt (college loans) but we give and we give gladly all that he asks us to give and more, because we know he will take care of us, always and forever! My life and my husband’s life is free, free in our Lord and Savior and you dear one are too. Praise be to God, there is someone out there who knows the real truth of this world, it is not ours, we are here briefly to do his will, to be trained for bigger and better things. Our destiny lies in our eternity with the Creator of the World. God bless you!
Thank you for your kind words. I really do feel blessed. I hope your debt repayment goes smoothly.
We are debt-free! We paid our mortgage off about 1 1/2 years ago. I would say it looks very similar to us as it does to you, but for different reasons. We now have the goal of getting my husband retired early (I’m a SAHM), so we keep our budget tight so that we can put more into retirement savings. I definitely feel that my husband isn’t as stressed about his job performance now that we don’t have any debts. We do worry about big upcoming expenses, but it’s because those things put us at risk of not being able to put away as much for retirement as we’d like. It’s kind of funny that since our retirement savings are automated to come out of every paycheck, I still feel poor, but it’s a good thing. It keeps me on a budget and from wasting money on things we don’t need 🙂
Automatic withdrawal is the way to go. We do that for our car replacement fund and it helps us forget that we even have it. Those are great goals!
What a great reminder that just because you reach your goals doesn’t mean the work is over! Money is always a work in progress.
Debt free to us looks like a double wide mobile home, 1200 square feet, 30 years old. You have to give up, once and for all, keeping up with the Jones. Oh yeah, I drive a 1999 Toyota Camry with 228K miles on it.
We started our marriage in a single wide home. Toyotas go forever don’t they? When we were stuck in a hard spot once very early in our marriage my husband and I bought a Toyota for $250 . It had a few issues and didn’t look pretty, but it gave us the time we needed to save up for a better vehicle. We are actually currently saving for another Toyota Camry or Corolla since we have such fond memories of that one.
My husband and I had two main goals in life; be debt-free including the house and put our sons through college by cash flowing their education. Last month we paid off our house and all consumer debt. We put our eldest through college and we are half way through with our youngest. Last month we were able to save my husband’s income and live on mine and this month looks promising. I am now able to help my elderly mother by supplementing her fixed income as well as my sister. God is good.
Congrats on getting the house paid off! Our eldest is graduating from High school this spring so cash flowing college is the next thing on our list.
What an inspiring post! I can totally relate. The only debt we have is the house and we’re working hard on getting a better budget in place so we can work towards some goals. Thanks for sharing!
I really appreciate reading this post. My husband’s job just happened to be part of the DOD Air Force cuts this past year year, his career field and ranked were overmanned and so he lost his 14 year military career, but we came away with a severance pay that paid off all of our debt. He found a job in a different state so we were blessed to be able to sell our house within 3 days of putting It on the market which left us 100% debt free and we will have a 5 month emergency fund when he gets his final paycheck and we get our tax refund. We are actually going to be on a much tighter budget, the job we felt led to take was one making 20,000 less per year than he made in the military, cost of living is higher in our new city so our housing is now 300 more per month ( hopefully temporary rental)and we now have to pay health care out of pocket including the medical bills that will come from my ongoing 5+ year battle with thyroid cancer. So yes we will still worry..LOL. My big prayer is that medical bills do not turn into a new debt battle. We found out that my husband was being laid off on August 1 2014 and ever since that day God has ordered our steps exactly. He has made things fall into place that should not have worked but for the hand of an almighty God. He has truly taken care of us and I know He will continue to do so. But for now..debt free life is actually harder financially than it was before. BUT…if we still had our debt there is no way we could have made the payments on this paycheck.I am so thankful that it is gone and grateful that we will have a 5 month emergency fund so if he should get laid off again we can afford to life and to move for a job if need be. There is a lot of peace of mind to know that we have the freedom to go where the work is if we need to.
I hope you new ventures go well.
I can relate to your utopia of debt free living, my mind works that way too… However, good to read you’ve made it to debt free and are able to spend more time as a family and give more!
Wow! What an amazingly honest look at being debt free! I admit I have these grand ideas about what our finances and lives will look like, but I know that it cannot be all sunshine and roses 🙂 Thank you so much!
Thanks for sharing the article on twitter.
Loved your number 4.
People will never say im rich, the greatest thing my wife and I did last year was to sell the big house and pay cash for a small condo. It is such a great feeling of freedom to own it.
THANK YOU for this blog post, which obviously was written awhile ago. We became debt free eight years ago, and then I immediately quit full-time work to be at home w/our baby…now 2 babies. 🙂 We got rid of the payments, but we also cut our income in half. So things were still tight – just like you. I worked part time for seven years, and we even survived a 6 month period of unemployment for my husband. Hubby has been promoted over the years, and I was able to quit my part time job to focus on homeschooling our kids. God has blessed!! However, in the last year I’ve really struggled with being content. We would REALLY love to live on an acreage, but we’re not in a position to do it. And I’m totally repulsed by going into a ton of debt to make our dreams come true. It’s been a tough, tough year…..many of our friends live in homes that are a pipe dream for us. It’s frustrating for me. Lately my mindset has been…..here we are doing what we should do, but stuck in the same old, tiny house….meanwhile everyone else you know has the sprawling house on a sprawling acreage. UGH! Reading your post has helped me a little bit…helped me realize we’re not alone and my feelings are not abnormal. I know these feelings will pass…and in the meantime I’m grateful to know that I’m not alone in the way I feel. 🙂
YES. I struggle with the same things. Contentment truly is something that we have to strive for daily.
This is one of my favorite debt free articles that I’ve read. Right now debt free is a long way off for me, but I was encouraged when you spoke of family time being more important than finances. As a single mom I often struggle with doing the best for us in the moment vs. the best for our future. I am blessed to be able to pay all of our bills while working part time, but I would love to see those debt numbers go down faster, and working two extra days would put a huge dent in them.
I am glad you enjoyed the article. My question for you would be how long would you have to work those 2 extra days to pay down the bills? That would drive whether I would do it or not more than anything else. I would chart it out and then let that chart inspire me to stick to the plan. I wish you the best on your journey to becoming debt free.
My life is very different than most. I moved from the United States to Ecuador when my income went from almost livable to $611 per month. I am totally deft-free and love it. If I don’t have the money for it, I don’t buy it. Since I moved here my income went up to $724/mo. and I now do some house sitting and sell afghans I crochet. While I live on my income, that money goes into completely furnishing my home with custom-made solid wood furniture, original artwork, and fun stuff like a 3-day trip to the big city with my women friends. Of course prices are amazingly low here. My rent is $100/mo for an unfurnished little house (300 sq. ft.), gas and electric are about $15/mo. All the fresh vegetables I can eat are less than $40/mo. The rest of the groceries are about an equal cost. Two dozen roses: $3. Bus to the next town over for shopping: $0.35–to the big city: $2.50. Taxi to bring home a heavy load from the market: $1.25–if the driver helps me carry it all in, $1.75-$2. A splurge on a latte: $1.75 (plus a $0.25 tip). Still, there are people here who can easily spend $4,000 a month and have debt. It’s not just because it’s inexpensive to live here. As always, living debt-free is as much a state of mind as a state of the bank balance.