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One Step Closer

The goal of self sufficiency gets closer each day. The plan has been to rid ourselves of as many monthly bills as possible. To date we have eliminated all credit cards. I must say it is very liberating to know that we do not have any credit cards. We navigate on a cash only basis. We have one car payment and two cars. The Pacifica has a $9,000.00 payoff and we will pay that off by July 1. Our student loans total $15,000.00 and will also be paid off by July 1.

Remaining large monthly payments will be our mortgage and a land payment. Totaling (with excess paid monthly on both principles) $2,100month $25,200 year

Additional monthly bills :

Gas 40 (480 year)

Oil 20 (240 year)

Electrical 80 (960 year)

Landline phone 30 (360 year)

Music lessons 125 (1500 year)

Camps 20 (240 year)

Museum membership 12.50 (150 year)

Fitness gym 30 (360 year)

Wood FREE main heating and hot water source

Auto gas, ins, maintenance 160 (1920 year)

Groceries 325 (3900 year)

Gifts mostly homemade 60 (720 year)

TOTALS $902.50 month ($10,830.00 year)

GRAND TOTAL $3002.50 month ($36,030.00 year)

If you are wondering how to pay off big bills I can offer you our strategy. First we made a budget based on what we wanted pay off or to SAVE, not the amount of money we made. This is huge. As Americans we are taught to spend according to what we make and what we can obtain through loans. This method of spending is wrong and only puts the consumer in debt and the producer (BIG BOX STORES, AUTO MAKERS, BANKS…..) gets richer. We looked at the car payment and our student loans as the immediate burden. Could we save $24,000.00 in less than a year? The answer was yes, but….we would need to manage our money very closely. We paid our monthly SL and car payments and put our tax return and $1500-$2000 a month away. Some months we put away more money some months less money. The goal was to pay these two bills off in March. We slipped up here and there, we underestimated heating costs and had some unexpected expenses but we didn’t let that get us down. We kept our goal in sight. By July 1 we will have $24,000.00 to pay off those bills.

Why not pay extra each month instead of balloon payments? This is personal choice. We were fueled by watching our money grow. It depends on what gets you fired up. Seeing my husband work so hard and sending all that money out the door each month just didn’t fit us. We needed to see the fruits of our labors. Would we do it that way again? We are hoping we never have monthly loan payments. We do not intend on ever taking out another auto loan. With our surplus income we are planning on making car payments to ourselves and when we reach the dollar amount we need to purchase a car we will take our pillowcase of cash and buy a car. We have already proven to ourselves that we can save.

What is missing? Cell phone…I am blessed in this area, my daughter put me on her plan and she pays the monthly bill. She generously provides me with a cell phone because she knows I would not have a cell phone otherwise. I don’t feel as if I need a cell phone. My parents and grandparents survived without a cell phone - and quite frankly the phone can be a disruptive bother that I can easily do without. Cable and internet? I put cable and internet together because to me they are one of the same. They both provide endless hours of mindless entertainment. Internet and cable both can be used constructively of course. One can search the internet for facts and recipes, read money saving blogs and the like. Cable can be educational and informative. However the ratio of informative viewing on either to the ratio of entertainment viewing is quite low. On average Americans watch 5 hours of television every day- with the bulk of their viewing being mindless entertainment. $130.00 a month for cable and internet! NO thank you. Internet is free at my local library and if I am not feeling social or the library is closed I sit in my car in the parking lot and upload my blog entries and check my e-mail and face book.---For FREE! At first it was a pain but like most things you get used to it and I really enjoy saving money. Besides cable would be a waste of money for us because we do not own a TV.

What about eating out and other frivolous spending? We eat out on average once a month. We are able to do this because I thrift store shop and consign a lot of clothes. Being a stay at home- school at home mom lends itself to saving money. One thrift store allows you to fill a paper bag with items for a $3.00 donation. Many times I find wonderful clothes for myself or family members and occasionally I find a beautiful Banana Republic skirt in pristine condition that is destined for a quick $5.00 in my pocket from the local consignment shop where it will sell for a fast $10.00. I have made my money back plus a $2.00 profit. Find 20-30 items in a month to consign and we have made the $50-$60 needed to go out to dinner without messing with the family budget. I must say that we like eating out but we don’t LOVE eating out. I enjoy cooking and have learned over the years that good home cooking beats restaurant food every time. All of out best meals have been at home. I contribute that to the fact that I do not work outside of the home. I have plenty of time to plan meals, shop for the ingredients and then leisurely prepare the meal.

All in all the way you decide to live your life and spend your money is ultimately your choice. I would caution you though…if your lifestyle reflects your neighbors and your neighbors neighbor and so on…is it really your choice? Or have you essentially conformed to a producer based theory of spending? Rather than a consumer based theory of saving and pay cash as you go?

One last thought… Which sounds better to you?

Pay off your current car loan. Keep your paid off car and continue to make car payments to yourself . In 3 years have enough cash to buy a factory left over or a low mileage used car of your liking. Pay cash and eliminate the interest! Pay cash and really dicker with the salesman and get the car you want at a low price. Walk away with a car you own!! No payments!

Or perpetually make car loan AND INTEREST payments. Pay thousands of dollars more for a car than it is worth. You are lining someone else pocket with your hard earned money………

It’s hard to change - we have been taught this Producer based theory all of our lives…….It is time for the consumer theory of spending our cash (not loaned cash with interest) they way we choose.

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Summer on the back porch

Summer on the back porch