The following is a blog swap from Derek at Life And My Finances, where he writes about saving, investing, and his goal to share financial knowledge.
I grew up in quite a large family. My parents had 4 boys and 1 girl – I am the youngest of the bunch. Since my parents started their family very early in life, they always had to watch their money. If I remember the story correctly, it wasn’t natural from the beginning. In fact, when they got married, my dad immediately went out and bought a motorcycle! Once my mom explained that their finances could not support the purchase, he had to give it up.
When they bought their first house, they were very uncomfortable with the large loan (I think it was $5,000 or so at the time, but today, that would equate to $30,000). They decided that even though money was tight, they were going to pay off that loan as soon as possible! Well, when they moved out of that house a few years later, it was fully paid off. And, they have never taken out a home loan since.
Through the years, because they made the decision to remain debt free, they were able to put 5 kids through private schooling, and even assisted with college tuition! Today, they still remain in a mortgage-free house and will most likely retire at the age of 62. It’s amazing how much one can afford when there are no debt payments.
I know that some of my siblings are still astonished, and they have actually asked my mom and dad how they did it! As I’m getting older, I am beginning to understand what a huge accomplishment that was as well. I mean, we didn’t grow up in a one bedroom house or anything. In fact, most of my childhood years were spent in a 4 bedroom, 2 bath house. We often went out to eat on the weekends and had regular vacations – it was a well-rounded life, and there was still some money to spare in the end because those large debts were gone early on in life.
This is the best lesson that my parents taught me. Live within my means, and if there are debts in your life, pay them off as fast as you can. My wife and I are actually working to pay off our debts right now. We are still young, but we believe in the power of getting rid of debt early, just like my parents did. If all goes according to plan, we should have our debts paid off by the end of March! Once we do this, it’s time to invest in our future! If we keep that up, wealth will certainly be showing up at our doorstep in no-time.
Wow, that is a big family! It’s so great that Derek’s parents were able to pay off their debt early. I hate consumer debt too and we do not have any right now. Yes! I had some private student loans when I first graduated college, but that had been paid off. We still have a mortgage though and we are working on that a little at a time.