I have read a few book about debt and what to do about it. I have read Suze Orman’s “The Money Book for the Young, Fabulous & Broke” as well as Dave Ramsey’s “Total Money Makeover.” Here is a combo cliff notes version: The easiest way to get out of debt is to not get in it. Sounds simple enough. Don’t spend money you don’t have (duh). In theory, this makes total sense. Practice is much harder. (I am going to skip over gender pay inequality, racial and other current socioeconomic issues in the US in general. That is a whole other post for another day.) I will use my own life as an example.
I am incredibly fortunate to have parents who were able to take on the full responsibility for my higher education and housing. I worked in a market and as a mentor and was able to pay for my own food and going out. I understand majority of my peers are/were not in the same situation as I was. For me, buying a car was the first time my name had debt. I have been saving for a car for the better part of a decade. I did a ton of research on what brand I would like, what model, and new vs. pre-owned. I am currently paying off my pre-owned Honda CR-V. My goal for this is two years from purchase, which means August of this year. I saved up several thousand dollars to make a down payment of more than half of the car. Although I knew that I wanted this car (and needed a vehicle) neither Orman nor Ramesy recommended this path. They would suggest that I buy a cheaper car and pay it off right away. I spent a few years finding the “right” car for me and focused on affordability, safety features, gas efficiency, etc. I do not regret my decision*, but in order to pay my car off in two years, this means I don’t have a ton of money to put into “home” savings.
Trying to balance paying off a car, paying rent, saving in my 401k, grocery shopping, occasionally eating out/maintaining a semblance of a social life makes it hard to save up for a forever home. I don’t think that I spend a ton of money on nonessential things. We don’t have cable, instead we use PlayStation Vue and Netflix. I don’t go to the movies unless I am dying to see what is playing. I do tend to eat out or get to-go food more than I probably should. I am human. I love food. I am too lazy to cook and clean dishes/pots/pans. Sue me. I know that in the near future I will need to change up my habits a bit, but right now I am getting by. I don’t feel like I am living off my credit card or paycheck to paycheck, but I don’t have a ton of cushion.
My personal financial goals:
- Pay off my car
- Get new tires for said car
- Save six months’ salary (just in case)
- Save for a house (either tiny or small)
So … that’s where I’m at in life.
*I know this is a soccer mom car. I honestly didn’t realize it until I was driving around and noticed majority of the other CR-V drivers had a mom haircut and a couple of kids in the back. I, mostly, do not regret getting this car. It was a life saver when Nincol and I were moving into our current apartment and we have taken it to the drive-in with blankets in the back and the trunk popped.
Tiny in Texas 