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Living debt free

 
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Howdy Travis and Rolf,

Interesting to see how some Governments and their Farmers operate.

Australia doesn’t subsidise Farmers so they need to continually evolve to meet various World market demands: consumer needs, economic demands and climate necessities. If you were to talk to an Aussie Farmer about subsidising food production, sure, some would hold out both hands and bring along their wheelbarrow for good measure; most however would ask ‘what’s the catch’ and say ‘no thanks’. (I think, in the OECD, we’re second only to New Zealand for lack of Government funding to Farmers.)

However, the Government does fund via Programs that manage seasonal variability, and provide tax deductions e.g. water subsidies, drought assistance, Primary Production Tax Incentives (PP), etc. Most of these Programs are based on LOANS, so Farmers need to pay the money back to Government … lower interest rates than banks.

So, it’s very much a free business model where responsibility is on the owner. The PP incentives means Farmers can claim certain things to gain tax advantages e.g. deductions on equipment costs/devaluation, carbon-sink forest deductions, etc.

In our experience, subsidies just make Farmers complacent and slow to react when market circumstances change. And, they drive down food costs to a point where it is unrealistic. There’s also the very important matter of quantity over quality.

In a dry climate, not having subsidies means relying on other things to be successful – we have a very robust relationship between Farmers and our various science organisations (CSIRO, Landcare, etc) who assist in some brilliant ways to improve cropping, animal production, balancing environmental needs, etc.

To date, we’ve resisted the wholesale spread of GMO crops, and I hope they get the flick completely. A quick check showed we only grow GM cotton, Canola, Safflower and, for some reason, Carnations! Apparently ‘other’ crops are being ‘trialled’. Importation of GM food is another thing altogether.

Dairy Farmers have been treated appallingly, with the big grocery companies subsidising and selling milk at $1 a litre for years and Government doing little to assist. Only recently, following a steady decline in  Dairy Farming, suicide rates, potential supply issues, and media outcry, did the big companies raise the price to keep their ‘cash cow’ churning. It’s still not good enough – I’d like to see milk production go back to the era when real co-operatives existed, milk was priced on market demand, and companies could only buy from co-operatives which couldn’t be owned or influenced by business.

In regards to specialising: for commodity (world market) crops or supplying a designated food-chain (canning factory, supermarket contract), there’s no real alternative. But, for local (national/regional) markets, specialising is usually a risky proposition for a variety of reasons – income from multi-cropping is by far more reliable than a single crop. For example: a Farmer may choose to grow only potatoes whilst their neighbour grows a mixed crop of corn, potatoes, greens and has chickens (eggs). There’s an unusual season and the potato crop fails. At least one of the Farmers has an income.

The traditional pre-WW2 farm was typically a multi-crop affair, selling fresh produce to nearby towns and cities via train and truck transport. It was economical because inputs and outputs on the farms were balanced (fertiliser from animals, feed sourced on-site or from neighbours farms), not influenced by trucking/grocery shop magnates who wanted to control every facet of the supply chain.

We now see a resurgence of these olde ways: ‘Farmers Markets’ and ‘Farm Gate’ stalls. At any of these markets/stalls you’ll find local raw produce like fruit, meat, eggs, etc. The savvy Farmer value adds and provides things like jams, wine, cheese, smoked meats to their counters = $$$$ (usually free of Mr. Taxman!)


 
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I was always told in the agricultural classes I took, and based on my own farming experience this is solid advice, and that is, to always have (3) major production lines on a farm.

They say that because less than three means if one commodity tanks on price, the other two will keep the farm going, and while it is possible two commodities will tank, the chances of all three tanking at the same time are low. Yet when there is more than three commodities produced, a farmer cannot dedicate enough time, knowledge and experience to really get a good grasp on what they are producing.

In my experience, I have suffered because I never had three production lines. I was doing okay when I had a job/logging/sheep, but suffered when I only had logging/sheep.

But I think for most people, rather then doing three things really well and being profitable, they try to "diversify" and end up struggling. To me it just makes sense because while a decent day could be made of tending to the sheep in the mornings and at night, logging in the winter, and raising potatoes during the summer; the focus is very concentrated. It is called Effeciency of Scale. But when a person is trying to care for sheep, care for chickens, care for goats, milk a few cows, etc, because each commodity requires different things, not only is their chore time stretched out, they are scattered-brained because every few minutes their brain has to switch gears, and start a new task, and fear missing a step in between. That induces inefficiency, but also stress.

To wit, rather than switch gears and milk cows, it takes far less time, resources, and mental prowess, to just stay on the tractor and feed 75 more sheep. That just makes the sheep production line much more efficient as no extra time needs to be used in figuring out marketing, storage, nutritional, and equipment needs of the cows. But do not get me wrong, if a person likes cows, by all means just eliminate the sheep, and focus on a higher dairy production system. The point is, do three things, and do them darn well.

But here is the thing, there is something intensely strange about money. You can point of deficiencies in how people handle their money, and how they make it, and yet despite failing at what they are doing, people will defend their method until their death. It is the strangest thing because it is not just people dislike change, no...they defend their system to the point of down-right anger, even though it is clearly evident that it is not even working to them.

 
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F Agricola wrote:Howdy Travis and Rolf,

Interesting to see how some Governments and their Farmers operate.

Australia doesn’t subsidise Farmers so they need to continually evolve to meet various World market demands: consumer needs, economic demands and climate necessities. If you were to talk to an Aussie Farmer about subsidising food production, sure, some would hold out both hands and bring along their wheelbarrow for good measure; most however would ask ‘what’s the catch’ and say ‘no thanks’. (I think, in the OECD, we’re second only to New Zealand for lack of Government funding to Farmers.)

However, the Government does fund via Programs that manage seasonal variability, and provide tax deductions e.g. water subsidies, drought assistance, Primary Production Tax Incentives (PP), etc. Most of these Programs are based on LOANS, so Farmers need to pay the money back to Government … lower interest rates than banks.

So, it’s very much a free business model where responsibility is on the owner. The PP incentives means Farmers can claim certain things to gain tax advantages e.g. deductions on equipment costs/devaluation, carbon-sink forest deductions, etc.

In our experience, subsidies just make Farmers complacent and slow to react when market circumstances change. And, they drive down food costs to a point where it is unrealistic. There’s also the very important matter of quantity over quality.

In a dry climate, not having subsidies means relying on other things to be successful – we have a very robust relationship between Farmers and our various science organisations (CSIRO, Landcare, etc) who assist in some brilliant ways to improve cropping, animal production, balancing environmental needs, etc.

To date, we’ve resisted the wholesale spread of GMO crops, and I hope they get the flick completely. A quick check showed we only grow GM cotton, Canola, Safflower and, for some reason, Carnations! Apparently ‘other’ crops are being ‘trialled’. Importation of GM food is another thing altogether.

Dairy Farmers have been treated appallingly, with the big grocery companies subsidising and selling milk at $1 a litre for years and Government doing little to assist. Only recently, following a steady decline in  Dairy Farming, suicide rates, potential supply issues, and media outcry, did the big companies raise the price to keep their ‘cash cow’ churning. It’s still not good enough – I’d like to see milk production go back to the era when real co-operatives existed, milk was priced on market demand, and companies could only buy from co-operatives which couldn’t be owned or influenced by business.

In regards to specialising: for commodity (world market) crops or supplying a designated food-chain (canning factory, supermarket contract), there’s no real alternative. But, for local (national/regional) markets, specialising is usually a risky proposition for a variety of reasons – income from multi-cropping is by far more reliable than a single crop. For example: a Farmer may choose to grow only potatoes whilst their neighbour grows a mixed crop of corn, potatoes, greens and has chickens (eggs). There’s an unusual season and the potato crop fails. At least one of the Farmers has an income.

The traditional pre-WW2 farm was typically a multi-crop affair, selling fresh produce to nearby towns and cities via train and truck transport. It was economical because inputs and outputs on the farms were balanced (fertiliser from animals, feed sourced on-site or from neighbours farms), not influenced by trucking/grocery shop magnates who wanted to control every facet of the supply chain.

We now see a resurgence of these olde ways: ‘Farmers Markets’ and ‘Farm Gate’ stalls. At any of these markets/stalls you’ll find local raw produce like fruit, meat, eggs, etc. The savvy Farmer value adds and provides things like jams, wine, cheese, smoked meats to their counters = $$$$ (usually free of Mr. Taxman!)







Once I had a teacher who said that humans are by nature lazy and yes,in some way with subsidiry it is tru.Besides of that you loose your pride and to work for subsidires and you will never get a confirmation that you produce for the market and what people really want.
 
Rolf Olsson
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Travis Johnson wrote:I was always told in the agricultural classes I took, and based on my own farming experience this is solid advice, and that is, to always have (3) major production lines on a farm.

They say that because less than three means if one commodity tanks on price, the other two will keep the farm going, and while it is possible two commodities will tank, the chances of all three tanking at the same time are low. Yet when there is more than three commodities produced, a farmer cannot dedicate enough time, knowledge and experience to really get a good grasp on what they are producing.

In my experience, I have suffered because I never had three production lines. I was doing okay when I had a job/logging/sheep, but suffered when I only had logging/sheep.

But I think for most people, rather then doing three things really well and being profitable, they try to "diversify" and end up struggling. To me it just makes sense because while a decent day could be made of tending to the sheep in the mornings and at night, logging in the winter, and raising potatoes during the summer; the focus is very concentrated. It is called Effeciency of Scale. But when a person is trying to care for sheep, care for chickens, care for goats, milk a few cows, etc, because each commodity requires different things, not only is their chore time stretched out, they are scattered-brained because every few minutes their brain has to switch gears, and start a new task, and fear missing a step in between. That induces inefficiency, but also stress.

To wit, rather than switch gears and milk cows, it takes far less time, resources, and mental prowess, to just stay on the tractor and feed 75 more sheep. That just makes the sheep production line much more efficient as no extra time needs to be used in figuring out marketing, storage, nutritional, and equipment needs of the cows. But do not get me wrong, if a person likes cows, by all means just eliminate the sheep, and focus on a higher dairy production system. The point is, do three things, and do them darn well.

But here is the thing, there is something intensely strange about money. You can point of deficiencies in how people handle their money, and how they make it, and yet despite failing at what they are doing, people will defend their method until their death. It is the strangest thing because it is not just people dislike change, no...they defend their system to the point of down-right anger, even though it is clearly evident that it is not even working to them.



I think that these three lines should be connected.For example if you raise meat animanls you start a slaughter factory.
Yes,I have thought about that how stubborn people and even me are about to not change.Big and succesfull companies just shut down a branch.To be able to change bad things is maybe the biggest key to success.
 
Travis Johnson
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I am horrible as well, but one successful thing I have done this year is to track both bad and good spending habits.

On my budget, I have a place where if I deny myself something, I put a value on it, and if I cave, and give in and buy something I should not; I put that price down. Every month those two things get tallied, with the naughty column subtracted from the good column. In that way I see up to the day, month and year how well I am doing at saving money.

Like last night, normally I might have my wife bring me home dinner instead of eating by myself, but instead I ate at home. That was a savings of $10 for yesterday, but a few days before, I did not eat breakfast at home, and so I stopped into McDonalds and got a $7 breakfast meal. So tallied up, I saved $3, but had I been more frugal, I could have saved $17.

Seeing your spending habits really helps you save money.
 
Travis Johnson
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Out of anyone who has ever got one over on a bank, I believe it was Katie (my wife) who has.

She worked as a banker, and they were constantly pushing her to "sell" more stuff. Yes banks "sell" things, which for her was credit cards and auto loans; the two high interest payments that make the banks the most revenue. But we believe in being debt free, and it went against Katie's morals. So her approach was to take care of the customers needs. If there was something she could do to save them money, she would suggest it, but if she looked at their finances and they obviously could not benefit from a new credit card or car loan, she would stay mum.

This put her at odds with the bank. She had 100% customer service, won awards, free stuff from the bank for their appreciation, but her boss hated her becaue her numbers did not look good for him.

So one day he told her, "On Monday I want to know if you really want to work here or not. You think about it, and give me an answer on Monday".

So we talked, and on Monday she went in, sat down and told her boss that we had talked things over and that because we did not have any appreciable amount of debt, that she did not need her job at the bank, and that she would be terminating her emoployment. His jaw dropped. It was not what he wanted, or expected.

We are not debt free yet, but our bills are so low that Katie could do that.

Being debt free is NOT impossible for anyone; and yet it is so freeing! I do not say this to sound like, "look what Katie did", in boasting; I say it so that others will be inspired and say, "THAT IS WHAT I WANT." I want people on this forum to work where people want to work because they want to, not because they have to pay off things.

I do not have a lot of stuff, but the pay off is not having the woman I love work at a high stress job...saying, "No, I do not want, nor do I have to work here", was priceless!

Oh, and the kicker...two weeks after Katie quit, she got another recognition letter in the mail for perfect customer service again.
 
Travis Johnson
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If people are reading this and getting upset...GREAT! As Dave Ramsey says, "Get mad!" I will add, get DAMN MAD.

The system is deceitful and it is wrong! But to change, a person really has to get mad, and change what they have done.

Everyone has "junk". Yes it has value, so sell it off, and put the money you get for it, to paying off debt. How much a person sells is based on how mad they get. There is no other way out, you have to pay for what you bought, but the more stuff you sell, the faster you will get out of debt. I am talking selling your couch and sitting on the floor, sell everything to get out of debt kind of selling.

It is worth it! When you finally buy a couch to replace the one you sold down the road, it will be with cash and on your terms, not Discover Bondage!
 
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Not sure if this is the right place for this post, but I'm new here so am taking a shot at this.

We have been living debt free for over 35 years. We commuted and slaved at jobs, built equity in homes and chucked it all to live the life of OUR choice - remote property and build own home/homestead. I remember saying to my husband that the way to go was 'legal poverty' - basically finding and living below the 'poverty' level considered by the IRS 'zero pay'. We leveraged (and risked! ) the savings that we had built from the equity of our previous house(s) using that for materials needed to build with. Sweat equity, NO 'wages' and DIY as much as possible resulted in a very nice and livable house & homestead. During those years we used wood heat, solar electricity and cooked with a solar oven weather allowing. It wasn't as primitive or backwards as people usually associate but it was a bit haute camping at the beginning.

We also created and developed a flea market business that not only allowed us to have some income and work 2 days a week, but provided us with the BEST shopping one could imagine. Unfortunately the quality and variety of resale items dropped to the junk level that is found in most stores today. Any decent and serviceable item is now considered an 'antique' or collectible and sells for way over any store bought replacement item.

We sold and moved away from that location as citidiots (city idiots) began to move in around us. these folks wanted a country atmosphere but with city type living. Needless to say, they ruined the area and we were glad to collect our enriched equity and move on to a saner situation. The equity built up by our efforts resulted in more than we needed for next place & house built allowing us to invest savings for retirement living.

We still live 'extreme' frugal - its just a wonderful habit and self reliant way to NOT be hooked into so-called modern living. Not only do we live debt free, we haven't paid an electric bill for 35+ years, and enjoy fresh eating from our garden season allowing.
 
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elle sagenev wrote:Hey all,

We are currently teaching a Dave Ramsey class which has my mind on this topic. Plus my husband wants to quit his job because he hates it. We have no consumer debt. We DO have a mortgage which is on a 15 year mortgage and will be paid off early. How early kind of depends on our dedication at this point.

I think living debt free is the solution to most problems. I enjoy the extra money having no payments has given us.

Just wondering who else out there is doing it and such. Seems like a real permie thing, no debt.



I love stumbling across this topic.  I decided to search for "Dave Ramsey" here in the forums and this was the first thread I came across.  I've been a fan of Dave Ramsey's program for 10 years now.  I attained debt freedom once, just before some medical expenses and the same old stupid thinking got me back into it again.  After attending FPU personally a couple years ago, I've jumped back on the debt wagon again with gazelle intensity and am putting everything I can into getting out of debt...again - and planning on how to *stay* out for the rest of my life.  I believe this is a *very* solid permaculture principle and often overlooked within our life planning.  Look forward to reading all the replies here on this thread.
 
Travis Johnson
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Rob Kaiser wrote:

elle sagenev wrote:Hey all,

We are currently teaching a Dave Ramsey class which has my mind on this topic. Plus my husband wants to quit his job because he hates it. We have no consumer debt. We DO have a mortgage which is on a 15 year mortgage and will be paid off early. How early kind of depends on our dedication at this point.

I think living debt free is the solution to most problems. I enjoy the extra money having no payments has given us.

Just wondering who else out there is doing it and such. Seems like a real permie thing, no debt.



I love stumbling across this topic.  I decided to search for "Dave Ramsey" here in the forums and this was the first thread I came across.  I've been a fan of Dave Ramsey's program for 10 years now.  I attained debt freedom once, just before some medical expenses and the same old stupid thinking got me back into it again.  After attending FPU personally a couple years ago, I've jumped back on the debt wagon again with gazelle intensity and am putting everything I can into getting out of debt...again - and planning on how to *stay* out for the rest of my life.  I believe this is a *very* solid permaculture principle and often overlooked within our life planning.  Look forward to reading all the replies here on this thread.



Katie and I are going through Financial Peace University as well, and while I do not agree 100% with what Dave Ramsey says (mostly dealing with his views on insurance), it has really been freeing. We are running like gazelle's with Springs attached to our legs, and are a few months away from being debt free.

For us, it is hard because we have no income coming in right now. Katie is trying to get her Day Care up and running, and I am sick with Cancer, but we are still selling stuff, paying down debt, and paying bills, so if I can do that with NO INCOME, others with a job surely can!

Gazelle intensity baby!

Probably one of the greatest motivation video segments ever on getting out of debt. "You got to run!" (Dave Ramsey)
 
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Travis Johnson wrote:

Being debt free is NOT impossible for anyone; and yet it is so freeing! I do not say this to sound like, "look what Katie did", in boasting; I say it so that others will be inspired and say, "THAT IS WHAT I WANT." I want people on this forum to work where people want to work because they want to, not because they have to pay off things.

I do not have a lot of stuff, but the pay off is not having the woman I love work at a high stress job...saying, "No, I do not want, nor do I have to work here", was priceless!

Oh, and the kicker...two weeks after Katie quit, she got another recognition letter in the mail for perfect customer service again.



My husband quit his job in February. Not many people could handle the lose of a husband's income. I enjoy flaunting the norm there!!

Good on you guys. I hope you continue to do well and her day care business takes off!
 
Rob Kaiser
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elle sagenev wrote:Hey all,

We are currently teaching a Dave Ramsey class which has my mind on this topic. Plus my husband wants to quit his job because he hates it. We have no consumer debt. We DO have a mortgage which is on a 15 year mortgage and will be paid off early. How early kind of depends on our dedication at this point.

I think living debt free is the solution to most problems. I enjoy the extra money having no payments has given us.

Just wondering who else out there is doing it and such. Seems like a real permie thing, no debt.



Good morning Elle,

I decided to refresh this thread a little bit after searching for an appropriate place for another new post.

We've connected elsewhere on other threads regarding debt and it's great to see you coordinated a Dave Ramsey class also.

I got so much out of the course that I decided to do the same...and we are going into week 4 of our own FPU course.

You wrote:

I think living debt free is the solution to most problems. I enjoy the extra money having no payments has given us.


I couldn't agree more...and am so grateful my biggest financial problem right now is figuring out what "retirement" means to me.

That - and how to continue integrating permaculture into my life (and do so more efficiently) now that I am debt free (or will be within 6 months)!


 
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For me the key is determining what are truly NEEDS and what are actually WANTS.

I lived FAR below the poverty level until I married in my late 40's. Self employed meant boom and bust for the bank account. So priorities were key: rent/mortgage, insurance, power, phone, food.

Anytime I had a windfall I would make sure I paid things like power and phone a year, in advance.

Once that was done, extra money went on account at my vet's, or to make extra housing payments.  I could even buy gas 'in advance' on the co-op gas card at a preset price, and kept that for times when money was short.

Bought food in bulk, often living off the deep freeze and pantry for months. Let the oil tank run dry (okay, I live on the West coast of Canada, but hey, it was on average 50-55 F inside during winter) and only used a space heater for the bathroom and an electric blanket in the bedroom.

Used an antenna for TV. Clothing from the Thrift Store. Shut the power to the hotwater tank - only turned it on an hour before showering twice a week (that sucker was costing $50 a month!!). Never paid more than $500-1,000 for a beater car (what I paid in repair bills annually was less than my friends car payments for one month). I chose a place to live I love, so vacations were/are unnecessary. It is amazing how little one can do with, if one needs to.

Cash was king, no debit, no credit card, no overdraft (unless I didn't have enough for the rent/mortgage).  I lived debt free (not counting the mortgage) on less than $20,000 annually, for over 30yrs. My friends made 3 to 10 times what I did, but we're always broke or filing for bankruptcy. The key is identifying needs over wants. I wanted to own land - I got my half acre in my early thirties, even if my parents had to co-sign - the bank said I didn't make enough - but paid it all by myself! Needs, not wants....
 
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Lorinne Anderson wrote:For me the key is determining what are truly NEEDS and what are actually WANTS.

I lived FAR below the poverty level until I married in my late 40's. Self employed meant boom and bust for the bank account. So priorities were key: rent/mortgage, insurance, power, phone, food.

Anytime I had a windfall I would make sure I paid things like power and phone a year, in advance.

Once that was done, extra money went on account at my vet's, or to make extra housing payments.  I could even buy gas 'in advance' on the co-op gas card at a preset price, and kept that for times when money was short.

Bought food in bulk, often living off the deep freeze and pantry for months. Let the oil tank run dry (okay, I live on the West coast of Canada, but hey, it was on average 50-55 F inside during winter) and only used a space heater for the bathroom and an electric blanket in the bedroom.

Used an antenna for TV. Clothing from the Thrift Store. Shut the power to the hotwater tank - only turned it on an hour before showering twice a week (that sucker was costing $50 a month!!). Never paid more than $500-1,000 for a beater car (what I paid in repair bills annually was less than my friends car payments for one month). I chose a place to live I love, so vacations were/are unnecessary. It is amazing how little one can do with, if one needs to.

Cash was king, no debit, no credit card, no overdraft (unless I didn't have enough for the rent/mortgage).  I lived debt free (not counting the mortgage) on less than $20,000 annually, for over 30yrs. My friends made 3 to 10 times what I did, but we're always broke or filing for bankruptcy. The key is identifying needs over wants. I wanted to own land - I got my half acre in my early thirties, even if my parents had to co-sign - the bank said I didn't make enough - but paid it all by myself! Needs, not wants....



Well put.   Wants vs. Needs.  Yep, I use the same terminology when people ask me how I got where I am.  Also, "sacrifices", and "eliminating luxuries".  No Starbucks, no magazine subs, no Netflix, no trips to the movies, no fancy brand name clothes, no restaurants or fast food, no labor cost for car repairs or home repairs (I do them all, even if I have to slowly learn how to), not buying things needed until there's enough actual cash on hand to buy them.  It's not for everyone, but it is a way to get to living debt free.  (* let's not mention beer, that is a necessity, in my opinion.... I'm work'n on it, though.)  



I've been debt free since 2008, but here's the thing.  I live like I'm poor.  Brown rice, beans, potatoes, and whole wheat pasta constitute 70% or so of my diet.  Currently I'm trying to offset even more by growing my own food.  I rent out 80% of my mortgage free home so I can take time off of work for months at a time and still have a passive income.

I've mentioned this before in another thread.  I learned from foreigners I used to work with back in Silicon Valley.  They'd come here with no money to start with, become managers of large apartment buildings (getting to live in a unit rent free comes with the job, along with dealing with collecting rent, and all the other b.s. that comes with dealing with renters, small repairs, painting, plumbing, etc.).  They'd have full time jobs working with me, and then they'd save up to buy a house.  Then, they'd rent that house out for more than the mortgage on it.  Then they'd save up and buy another house.......all while living a meager existence in the apartment.  They are multi-millionaires by now.....

Another way to do it, would be to buy a house that could accommodate an r.v. parked somewhere on the property.  Rent the main house out, and live in the r.v.  Let the renters pay the mortgage.

Not ideal, but sacrifices are needed, not forever, just until one is at a place where they can get out of debt.  Maybe that's a decade + or - , a sacrifice.

Edit, The answer to the question is easy.  The actual "act" of doing it is the hard part, from what I've seen.

For example, and this is not to be negative to anyone's choices, merely an observation on my part.
Everyone knows that to lose weight, they have to eat less/exercise more to achieve that goal.  
The answer is easy, it's not a secret, and it's well known.
Actually practicing it, that's the glitch in the answer.  It's harder for some than for others for whatever reason that is.

That goes for everything in life.  I have a hard time practicing a lot of things that I know the answer to.  It's a conundrum.
 
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