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Can You Buy A House, Have A Car, Or Go To College Without Debt?

With a plan you can!  It seems like every time I write an article like this I lose a few subscribers.  That’s fine, I am fully aware that I will not please everyone.  This would be too easy if I could, and frankly I like the challenge. For some reason people seem to get angry about someone (me) telling them that it is ABSOLUTELY POSSIBLE to live life without accepting the chains and bondage that come with debt.  I could speculate all day long about why they get mad, but I’ll just keep it simple.  The truth hurts! It hurts in this case most likely because accepting my argument against debt means that change has to happen.  People don’t like change, or people that point out the things that need to be changed, so I guess this makes me the bad guy!

People have accepted for so long that they will always have a car payment, that they can’t have a house without a mortgage, and can’t go to school without a bunch of student loans.  This is so far from the truth, but since it has been implanted in our head as truth from a very early age, people refuse to accept any alternatives, especially if it means the word sacrifice comes into play.  As I’ve stated before, I was taught growing up that debt and building your credit score is the ONLY way to have certain things.  My dad sticks to this way of thinking and has said that I will never get people to give up their credit cards or car payments.  Never?  Leading only two 13 week Financial Peace University workshops, and writing for this blog says otherwise.

I get emails from co-workers, members of those FPU classes, as well as readers that glow with excitement over their newly paid off credit card, or that feeling of freedom they feel after paying their car off for good.  There is another way and if you continue to read EOD, you could be convinced of it too.  It’s called having a plan to get what you want, instead of getting what you want without having a plan!  It’s called saving to buy, instead of buying to slave! It’s called taking control of your finances by making better decisions!!  It’s also called personal responsibility.  We seem to hold the President responsible for his decisions, but why not ourselves?

Proof That This Dangerous Mindset Is Alive And Well

I was reading an excellent article from a fellow PF blogger today called, Top 10 Reasons That Living With Debt – BITES!.  Jeff over at My Super-Charged Life gave 10 reasons that to him, explain why living with debt should not be an option.  I happen to agree with him, but I am very aware that our way of thinking is not accepted as rational or even possible, in a culture of excessive consumerism and the “I need it now” way of thinking.  Dawn responded with this, and for the record I am not picking on her, I just feel that her comment is the wrong but normal way of looking at things.

“I agree with you, but there are certain things that most people could not pay cash for, namely, when buying a house, and also for college tuition.”

Could not?  Just because it isn’t very common doesn’t mean it isn’t possible to buy a home or pay for college without debt. The truth is that IF people had a better and more responsible financial plan then they very well could do those things with 100% cash down. (100% cash down refers to not going into debt to get something, NOT that you physically only spend cash.)  I admit that it’s not very popular, but what if it was?   If you look at the savings habits of MOST people you will see the reason it is not currently possible.  Isn’t it logical to believe if people saved more, and planned more, they could accomplish some of these “impossible” goals?

I am going to school debt free and my kids are going to be going to school debt free.  There are in fact people who either pay off their mortgage early, or pay for a house without a mortgage at all.  Don’t those two examples mean that it is possible?  If I can go to school debt free, and some have paid off their mortgage early, can’t you also save money to buy that house too?  It might mean that you will have to wait to get that dream house or that school takes a little longer to complete, but what is the rush?  Why does everything have to be done without patience and proper planning to get it?

I just wanted to point out that most people feel the same as Dawn but most people are broke and living paycheck to paycheck, and that is not me being mean, it’s statistically proven.  Maybe it is time for people to plan their future instead of running full steam ahead without knowing where the track leads.  Maybe it’s time for people to stop doing the same things over and over again and expecting different results.  There’s a thought!

“I believe that if you are disciplined about paying your credit cards off every month, short-term financing like that made possible by credit cards can be a convenience when you’d rather not carry large sums of cash in your pocket. Assuming your card charges no annual fee and you pay in full each month, you’re paying $0 for a short-term loan.”

I hear this ALL THE TIME, and quite honestly it is completely full of holes.  Not the short term use of credit, but the reason why it’s more convenient.  I believe that not carrying a balance is the most responsible way to use a credit card, but is it the only way?  Nope!  For a business that purchases goods and has 30 days to pay, I think it is useful, but for personal use I strongly disagree?  Why?  An account payable makes it so that you are not having to pay the delivery guy EVERY TIME he delivers goods to your business, but instead you just cut one check at the end of the month.  For a business it makes sense, but for personal use it does not.  I think that there is a better way that gives you peace of mind with less risk. Wait, hear me out!

Dawn says that it is convenient so that you don’t have to carry around large sums of cash.  Can’t a check card be used to do this very same thing? I am sure of it, and the truth is that you don’t carry with you the risk of having a CC balance should a major emergency happen to you, before paying the balance.  Like rewards? Get a check card that gives you rewards for using it.  Like having a buffer to cover expenses in between paychecks? Take a minute to determine how much you need every month to do this and save it, then replenish the fund instead of the credit card when you get paid.  Do you believe that you are more protected against fraud if you use a credit card? That is a lie too if you swipe your debit/check card as a credit purchase instead of a debit using your pin number.  Don’t believe me? Go to the Visa website and see for yourself!

“Personally, I steer clear of the mega-banks who threw us into a global monetary crisis and then accepted taxpayer-funded bailout monies. I prefer doing business with small community banks and a credit union.”

I believe this to be complete denial and a true sign of someone who doesn’t believe in personal responsibility.  Banks are not the reason for our global crisis we find ourselves in at the moment. It is first the people who signed their name on any dotted line’s fault, to accept debt to cover the spending that exceeded their income. If you want to blame someone for allowing that to happen you can blame Washington for forcing some of these same banks to give loans to a larger amount of people in the name of equality. I am not a fan of big banks either, more for customer service issues, but personal responsibility is something that should be considered before pointing the finger.

If people shared Jeff’s attitude about debt, as do I, then there would be no banks to blame in the first place. It’s just something to think about and the very reason I feel so passionately about spreading this very message to all who are willing to hear it. Not accepting debt as the answer gives you MORE options in life instead of chaining you down. I hope you can at least consider what I have said as a possible alternative to using debt to get stuff. The solution is in us and our plan, not in blaming others for our own mistakes.

Now I know that my opinion on this is going to ruffle some feathers because people have been led to believe that the banks are to blame, I just happen to disagree with that line of thinking.  Have there been banks that have deliberately taken advantage of consumers?  Absolutely, and without shame! Does that mean that you, the borrower is faultless?  Not a chance, because you signed the line and likely didn’t read the fine print that told you what was going to happen if you did this or that.  Yeah but…nothing, you could of said no to the slavery that is DEBT!  When you make a choice and it is wrong, that doesn’t give you the right to blame someone else.

My Answer Is:  MAKE A DIFFERENT CHOICE!

You can live without debt!  You can buy a house!  You can buy a car!  You can rent a car!  You can go on vacation!  You can do absolutely EVERYTHING that you can do with debt, WITHOUT IT!  The only thing you won’t have is a FICO score that says you LOVE to borrow money!  OOOOH SCARY!  No FICO score?  That’s not possible right?  Oh yes it is!  The only good argument I have ever heard about why someone would NEED a good FICO score is because of some jobs requiring it for employment.  Just because it is required doesn’t make it right.  First of all it is just plain wrong!  To expect someone to go into debt by borrowing money in order to do something that they can very easily do just the same as if they had no debt, is STUPID!!!!!

How Can You Get What You Want Without Debt?

It’s called having a plan!  Brian Tracy, a motivational speaker and a master at goal setting, teaches the 5 P’s.  Proper Planning Prevents Poor Performance!  Create a plan that will allow you to have the things you want, and what you want, you will have.  No Debt is needed!!  Create a plan for savings!  Create a plan for spending!  Most of all, create a plan for your future, as well as for your children’s future.  It’s amazing how much you can do when you realize that debt is holding you back!  Get rid of that debt and go do it, and remember these 8 words:  SAVE TO BUY, INSTEAD OF BUYING TO SLAVE!

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