Living debt free

When I was the PR director of a credit union, I was asked to give a talk to newly divorced and widowed women on how to handle their finances.

It was like asking me to swim the English channel. I can't swim.

However, I am a good researcher and put together a damned good presentation.

It also made me look at my own finances.

The first thing I recommended to the women, is track everything they spent. I still do that although it much easier on Excel than a notebook.

Looking at the expenditures it was easy to determine what was necessary:

• Mortgage (or rent)
  
• Car payment
• Car costs
  
• Heat
• Electricity
• Day care
• Food
• Insurance (life and medical)
• Taxes
  

Everything else was optional with different degrees of desirability. 

From there on it is a question of life style and choices, assuming basic income. If you're paid 7.25 an hour there are not many options on expenditures. This is more for people who make a living wage and are struggling with debt.

Mortgage

I never thought of my house (condo) as an investment. It is a refuge, a place to build happy memories. For me color-coordinated is important but it isn't reflected in the mortgage. I looked at my first house payment. $8 against principle $125 total. I found out I could pay double the principle or even triple or quadruple to reduce the overall interest payments. 

For personal reasons, I had to move including changing countries which made this harder and often I was paying rent but that's another story.

Car Payment and Costs

At some points in my life I needed a car to get to work. I didn't need an expensive car. It bought a tiny Ford Escort. My coworkers teased me that I didn't have a big shiny status car like theirs. My boss asked if he gave me a raise would I buy a better car. I said he could give me a raise anyway. He didn't. I pointed out living in Boston, there were too many car thefts. My Escort was not on the wish list of many car thieves.

Because I learned to live where there is good public transportation, I didn't need a car for 20 years. Savings gave me cash to buy an apartment cash. I didn't care about the price of gas which in Europe is high. When I married, we decided to buy a car BUT we bought a used one that we could pay cash for so no interest charges. 

Heat, Electricity

I always felt because I saved money on other things, I could have enough light and keep the place warm in winter and cool in summer. I didn't heat or light rooms I wasn't in, and made sure to shut off as much as possible when we were away.

Day care

This wasn't an option until my daughter turned 12. I was lucky to find good solutions at reasonable prices, but it is not an area where one can scrimp.

Food

When I was an Army wife of a PFC and later a SP4, we often ran out of money and food before the end of the month. Stored Spam, rice, beans, combining left overs with other wives were solutions. 

When it was my daughter and me, Friday nights were Garbage soup nights where all left overs were combined in bullion, pureed and cream was added. No waste. Most Fridays it was wonderful. The only problem was that we would never be able to duplicate it.

Today, we waste too much food by either cooking too much or forgetting to use leftovers. Pre-pandemic with many restaurants in walking distance, whoever is cooking may say "I think I'll cook at La Noisette" or "What do you think of my cooking at Flowers." The pandemic has reduced out waste because restaurants are closed. Because we are careful with other purchases or lack thereof, we can eat guilt free at a restaurant and no dishes to wash after before and hopefully after the pandemic.

There may something wrong with me that I never wanted a big car or a big house to impress the neighbors. My retirement home was to be an 18 sq.mt. loft in a 400-year old building in a French village. At one time I thought my retirement would be $600 a month and with no mortgage I could live quite comfortable. There was train and bus service so a car wouldn't be necessary and almost everything was in walking distance including the movie theater. Over the years the available retirement income increased dramatically, but I still wanted to keep my unnecessary spending low.

I named the studio The Nest and I loved everything in it: fireplace, beams, the stone walls skylight, things that had meaning. Not an extra thing was there, but everything had a purpose, a memory and was beautiful. A good thing? It could be left spotless with only an hours work.

I told God my plans. He laughed and sent me the love of my life. The flat would not house both of us so we rented a two-bedroom flat two doors down. The Nest, as I called my studio, could be rented, but we use it as a guest room.

Credit Cards

For years I only had an American Express and that I used primarily for business trips. They want payment in full so never any interest charges.

When my mother was dying because I couldn't work full time. I got and lived on several credit cards. and between that and her expenses, after she died I was $75,000 in debt. Fortunately I ended up with a well-paying job in Switzerland and in five years I was able to pay everything off. If I have to use a credit card now, I make sure it is paid off at the end of the month. I don't want to waste money on interest.

Shopping

It helps I'm shopping phobic. Spending time in a mall makes me unhappy and if I have to go in one, I walk straight to what I need and try not to look right or left.

 

We often shop vide greniers (flea markets) or recycling places  and find things at a fraction of the cost. I adore my leather couch and coffee table bought for a total of $100 (translated from Euros). We've done that with most of our furniture including a hand carved desk. We do buy art work. We can because we've saved money elsewhere and we aren't worried about the next MasterCard Bill. It's fun to walk through a vide grenier on a summer day and talk with the people.

Little things save a lot

My husband was used to a more spendthrift life but slowly I'm converting him into reusing or not using or needing. 

Plastic bags for dry trash? One can last for years. 

 

It took me over 18 months to use a roll of paper towels. I only used it for bacon and I didn't have bacon very often. 

I cringe when he tears off four or five paper towels to wipe a spill when we have enough rags to do it. 

Aluminum foil? We reuse. I remember the aluminum ball my grandmother had for the war effort, but she would use some of it if needed before washing and replacing on the ball. Because the brownie lady on the Saturday marché wraps her brownies in aluminum, we almost never have to buy a roll. We reuse hers.

Paper napkins. Only when the cloth ones need washing. Or if we are entertaining a largish group and want something special.

Plastic wrap or cling film? Never. We have mason jars, a one time expenditures. 

 

Mouth wash? Four of five drops does the same as a throat-chocking swig. 

 

Tooth paste? Half my baby finger nail and even that produces too much foam. Four years ago a friend coming from the States to visit asked if I wanted anything. I told him Crest. He brought nine tubes. We still have half.

My beloved stepmom asked why I bought a reliable used Fridge instead of a new one. I told her the difference in the price between that and the new one she showed me were tickets (sale price) to Europe for my daughter.

Because we watch our pennies and centimes, they grow into dollars, Euros and Francs. This means a freedom from worry about bills. There is always money there. We also can look at a piece of art work, decide to go to Scotland, Germany, Italy, some place in Switzerland overnight and the money is there.

This is accomplished without investments. Both for lack of knowledge and disgust with so many companies, certain investments are out of the question. But then again, I have the flat I bought cash. It has already brought in 2/3rds of the purchase price and I has the original value plus. I don't need to feel guilty about the damage my investments are doing. Meanwhile I've provided a home to a little old lady from Paris. 

I don't think like many people on many things and money is one of them. I have enough. Much more than enough.  I still can't swim.