8 Tips to Be Debt Free Before 40!

For most young families, money is tight. Families are living paycheck to paycheck. And the dream of EVER being debt free in this lifetime seems next to impossible. But with discipline, hard work and a plan, it IS possible to be debt free before FORTY!
My husband and I did it, and so can you.

Yea right, you might be saying:

“They probably married late in life, and had built up a tidy nest egg before marriage!” Nope, we married right out of college at 22 and had nothing (but school loans) to our name.

“They probably didn’t have kids!”
Wrong, we had four kids within just a few years of marriage, with our 4th actually arriving on our 7th wedding anniversary.

“They probably came from wealthy families!”
No again ‘” no silver spoons here; far from it!

“They probably didn’t buy a home!” Not true, but we did go the unconventional route here (see our story below about how we did that!)

“They probably both had high paying professional jobs, earning huge salaries!” No again. I was a stay at home mom and my husband earned a modest income (just $12,000 a year in 1978 the year we were married).

So, are you intrigued as to how we did it? Great! I’d like to share our story ‘” our family tips and habits – that enabled us to be completely debt free before we were forty!

1) Don’t hire out what you can do (or learn to do) yourself.
The big and little things:

We married at 22, and were parents at 23, ten months later! We were young, but ambitious, strong and resourceful. So at 24 years old, we decided that the only way we would ever be able to afford a home was to build it ourselves ‘” LITERALLY! (Don’t quit reading now ‘” thinking there will be no tips for you. This was our most ambitious endeavor and I know most of you will not undertake this one!)

My husband came from a family of doers. His father and two younger brothers (yes, younger – ages 20 and 22) had built their own homes, so I was blessed with a husband with a can-do mentality built into his core. What we didn’t know, we learned as best we could. We asked friends and family to help on weekends, and after just 18 months of hard work, our home was finished enough to move in. So when other folks tell us they can’t do something, we just shrug our shoulders and say, “Are you sure?”

Our can-do attitude has spilled over into other aspects of our life as well, adding up to big savings over the years. Our philosophy is always “Can I do this or learn to do this myself?”
Whether it’s tax preparation, hair cuts, fixing our cars, refinishing our hardwood floors, or simply clipping our cats claws, doing the little things in life instead of paying others to do them, have added up to huge savings over our lifetime. It often amazes me that some people often pay to have some very simple things done by others rather than doing it themselves, but then complain about being broke! Adopting this “Can Do” mindset will enable you to be completely debt free that much faster. Of course, don’t forget the simple day to day things too. Just preparing your own meals instead of eating out, is (in my humble opinion) the very biggest waste of money of this generation. Don’t get me wrong, I sometimes don’t feel inspired to cook either (most eat out for the ease, rather than for the great taste), but those are the days to simply throw in the frozen pizza, or just have soup for dinner. And really, we have it so easy today. There are so many ready made dinners in the grocery store’s freezer section, unlike generations of the past who did not have those options ‘” or the microwave! And we complain!

2) 15 Year Mortgage rather than the typical 30 year – this is important!
At 24 years old, the decision to go with a 15 rather than 30 year mortgage was a difficult one for us, given we were so broke. But this one decision was probably the most instrumental in having us be debt free at the tender age of 39. It meant making sacrifices along the way, many of which are detailed here. But the payoff was huge. Let me give you an example: Choosing a 15 year $150,000 mortgage at 6% would save almost $100,000 as compared to that same loan paid off over the traditional 30 year longer time frame. Paying off our home mortgage three years before our first child graduated from High School, freed up much needed monthly income to help fund our children’s college education. And besides that, knowing your home is free, clear and all yours is a fantastic feeling ‘” especially when you’re not yet forty!

3) Don’t expect to have everything when you’re just starting out
When you’re young, I contend it’s okay (and actually good) not to immediately have everything that your parents have accumulated over their lifetimes. There is a wonderful satisfaction to gradually accumulating the “stuff” of life over the course of a lifetime. My husband and I have a comfortable home now (we’re mostly finished with the projects), filled with some pretty nice stuff ‘” but it wasn’t that way in the beginning or for many years, for that matter. We lived with hand me down furniture, garage sale finds (which I still do by the way), plywood on the floor for 5 years, and simply lived with less. In reality, most purchases tend to be WANTS rather than NEEDS! And we did well with less, as did our children. The mentality that newlyweds and young families should have beautifully furnished homes, and brand new cars in their garages is simply not realistic, or (I would contend) good for the family’s financial health. For me, waiting for something — saving up for a while — then finally getting it at some point, trumps the “right now” mentality culture almost every time.

4) Don’t buy into the “Keeping up with the Jones’ “ mentality
Why do we always want what others have? Whether it’s getting the newest and latest electronic gadget, upgrading your kitchen to granite counter tops, or trading in that perfectly good five year old car, Americans (I contend more than any other culture) tend to get sucked into the keeping up with the Jones’ mentality. Does your life really change dramatically because you update your bathroom fixtures, or replace perfectly good furniture? It seems we are enticed by HGTV and the like, and start thinking everyone is doing it, and so should we. But hold on. After a few years your new stuff will be outdated again. My husband and I are still living with teal colored bedroom carpeting from 1994, and foil wallpaper in a bathroom. Neither are “in” now, but it simply isn’t worn out yet. You never know, it might come back in style!

5) Don’t buy new cars
As a young family, we went through many used cars, typically paying no more than a few thousand dollars (cash) a piece for them in the 1980’s. It wasn’t until 1999 at the age of 44, that we bought our first new car, when interest rates were at zero, making it actually comparable to buying used. And by then or course, we had already paid off our home mortgage! Remember that a new car is new only until you drive it off the lot, then it’s used!

6) Borrow or share items you rarely use, rather than owning them
Do you have a shed or garage full of tools you bought for a project, then found that you never used that tool again? Maybe it’s that tile cutter you bought when you re-tiled your bathroom, or a wallpaper steamer from a decade ago. Or, do you have some bulky items that you use just a few times a year? Maybe a fertilizer spreader or a tall ladder for those rare occasions when you wash your windows or clean out the gutters. What if you shared or borrowed tools, ladders, tents, canopies, baby equipment, and those rarely used items instead of purchasing them? Besides saving lots of money, it will build relationships with family and neighbors, and free up much needed space in your home and garage. Sure there are some items that we each want and need to own, like a lawn mower, but most families own far too much “STUFF”. Just look at the storage rental business ‘” it is a direct result of our addiction to owning and wanting more.

6) Buy used or on sale – ALWAYS!
There’s always a sale coming! It is the American past time after all ‘” shopping! And retailers are constantly enticing us into their stores with specials and deals. By planning well, I was always able to buy just about everything at a steep discount. For example, our appliances often had small dents (on the sides where no one saw them) and were usually purchased at 50% savings (still under full warranty though). And don’t forget to keep your receipts and warranty’s well organized. We recently received a full refund for our $250.00 kitchen sink purchased 13 years ago. It had a lifetime warranty. With a few digital photos along with a copy of the original receipt and simple letter noting the issue, the full purchase price was refunded. And now with Craig’s List, it is so easy and convenient to scout out great deals for just about anything. The notion that “one mans junk is another man’s treasure” is true, as is evident by prevalence of garage sales. And don’t forget to negotiate prices, whether it is new or used. You will be surprised at the deals that are there for the asking. By buying at discounts, you are freeing up dollars to pay down that debt even faster.

7) Have fun without spending money

Who says having family fun has to be expensive? Again, remember your mission. Paying down the mortgage as a young person ‘” not when you’re almost ready to retire! As a young parent of four kids I tried to make their lives fun and exciting, while still living within our limited budget. A regular excursion to the nearby lake to feed the geese with our stale leftover bread was one of my kid’s favorites. It really takes very little to amuse young children ‘” unless, that is, we groom them to expect expensive excursions. We had visits to the park playground (sometimes with other families), went on nature hikes, visited friends and cousins houses, picnicked by the lake and went on bike rides. We checked out the local library summer programs (which were wonderful), and watched summer parades and fireworks. All of the above mentioned excursions were completely free! I invested in a freezer and kept it well stocked with ice-cream for the summer, instead of heading off to the Dairy Queen, and our vacations were typically camping trips. Later on, our do it yourself backyard in-ground pool became the go to yard for our teens and their friends. Our kids, now all grown and in their 20’s and 30’s, have told us many times what a great childhood they experienced. They weren’t deprived because we lived on a budget! Amazing!

8) Live below your means
Long before I had ever heard of Warren Buffet (he lives by this tip by the way), my husband and I were living the simple life. As my husband’s career advanced, and raises came along, we continued to live our scaled back life (by other people’s standards), living below our means. Our life had value and meaning through the simple pleasures in life, rather than the extravagance of materialism and consumerism. Today, we continue to live that philosophy. Now, my husband and I both drive 1999 model cars, rather than buying new ones with all the latest bells and whistles, and rarely go out to restaurants for a meal. We find joy and fulfillment instead in day to day living: helping our kids, volunteering at church and community, or a simple evening of dinner and games with friends. For us, this IS living the good life!

Our simple debt free life has been no accident, it has been through the adherence to the principles I’ve outlined here. It has taken discipline and hard work. I expect that the joy of seeing your debt decrease by leaps and bounds as YOU adopt and implement these ideas will soon fill you with a joy unlike shopping or spending ever did. What used to be essential, very soon falls by the wayside. You can do it. The end result is worth the struggles and sacrifices along the way. Being debt free at forty, or soon after, is attainable and liberating. I challenge you, go for it and see what owing nothing feels like.
Hint: It feels GREAT!