My friends John and Lisa recently shared some exciting news with me: for the very first time in their lives they paid cash for a car – a sweet 2 year old Toyota Prius with only 29,000 miles on it. They saved up the $17,000 purchase price (new price was $31,000), did some shopping and drove off in a vehicle that will last them for years and will never require a single payment. As we talked, I learned that this family has been doing all the things I like to write about: they have zero debt and a paid for house.
Naturally, I assumed you would want to know more of their story, so I asked if they would agree to an interview. Good sports that they are, they agreed. Thank you John and Lisa! Here is their story:
When did you get serious about getting your finances under control?
Our finances have never really been out of control, but after listening to the Financial Peace seminar it became obvious we needed to get out of debt. We found paying interest for “stuff” to financial institutions was making us have to work harder and enjoy our family less.
How did the car purchase itself go?
Quickly. haha The oddest part was writing a check out of our personal account and driving away with only a receipt.
Did you struggle with the decision to pay cash?
Not at all.
How do you feel about it now?
Great and in control.
How have your lives changed since you decided to get rid of your debt?
We feel more secure and stable. We know that no matter what happens, we will have our basic necessities protected. It makes not following the Jones’ much easier. We are no longer enslaved by the atmosphere of consumerism.
How much debt have you paid off in the past few years?
We have paid off $130K (including the home) since starting. We also have paid cash for all needs since deciding to not take on debt. It has been 3 or 4 years.
What has been the most difficult part of this journey?
Weekly budgeting and controlling daily spending. We still haven’t mastered this yet.
Have the two of you been on the same page throughout the process?
Yes, both of our families discouraged borrowing. So we were raised with the same similar mindset toward family finances.
How have you differed?
Not much. We have had to redirect each other at times, but it wasn’t a struggle.
What has been the key in working together?
Having the same goal and desired outcome. We want to play with our kids more. We work so we can live, not live so we can work.
I know you have one daughter who has graduated from college and two preteen daughters at home. How has this focus on your finances affected them?
We are fortunate to have healthy incomes, so the burden has not been too great for them. But they are getting an education along the way. They are also not kids that place a lot of value on “stuff”.
Do you think your journey has been a good influence on them?
Absolutely and for Kathe too. She had to struggle through college and manage her finances well. She did not take on school loans or credit card debt for her bachelors degree. She worked throughout college and finished in 4 years. She drove the same car she had in high school. She lived on campus and worked campus jobs. She aggressively pursued opportunities for stipends, grants or other positive financial assistance programs.
What is your biggest financial challenge going forward?
Staying comfortable in the stock market with investment strategies. Lost $7200 over the last 3 months in my 401k. Wisest investment for us to date has been property.
Do you believe you will stay debt free for the rest of your lives?
ABSOLUTELY!! We are even looking to downsize our housing to a more modest and realistic size.
Anything else you would like to add?
We think the work you are doing is very helpful for people and we are thankful for our experience with you.
You have just read a real life story of a family who is debt free (having paid off $130,000 in debt) and committed to staying that way. John and Lisa are passing this legacy on to their children; their daughter worked and sacrificed to make it through college with no credit card or student loan debt. My hunch is that their two younger daughters will do the same. My congratulations to John and Lisa: you are doing it right!
How about you? Do you pay cash for your cars? Are you debt free? Are you working toward becoming debt free? How are you progressing?