No Credit Needed, a personal finance blog, has made an interesting post about debt profiles of personal finance bloggers.  Bloggers were asked to answer a short questionnaire regarding their use of debt, and the results were compiled in the following 4 categories: 

1.  Rate conscious borrowers.

2.  The practical borrowers.

3.  The housing borrowers.

4.  The non-borrowers.

Not Made Of Money was placed into the non-borrowers category.  However, we did borrow money to purchase our home and have a mortgage.  The only reason we have not paid our mortgage off in full is that we do not think we will live in this house forever.  Our mortgage is at a fixed rate and we put a substantial down payment on the home when we purchased it.  We also found a lender who agreed to let us pay our own property taxes and insurance instead of collecting them through escrow.  We have a credit card that we do not use. 

So, how exactly do we feel about borrowing?  We absolutely do not believe in borrowing money.  We never wanted to be in debt, which we felt would limit our options in a lot of family life matters. 

When we got married, we made the decision that we would never incur debt.  We each came into the marriage debt free so it was easy to start from scratch.  This has served us well through the years, because we set up our financial system to be a debtless one.  Here are some of the principles we have used:

1.  We spend less than we earn.  Always have.  That means we have not had the newest stuff like DVD players, TVs, cars, etc.  We have always had what we needed and paid for things with cash. 

2.  Our emergency fund has been fully funded to weather the occasional unexpected expenses.  Then, when we have needed to pay for a car repair or medical bill, we have re-funded the emergency fund. 

3.  We’ve never bought a new car, only purchased used ones and have always paid cash.

4.  We set up a budget based on what we could afford to spend, and we stick to it.

5.  Our finances are kept up to date using the Quicken program.  

Now that I’ve discussed some of the methods we have used, I will share the benefits of living a debt free life.

1.  When we began to have children, I was able to quit my full time job and stay home with the kids.  We did not have the financial pressures to deal with because we had been living on one income all along and did not have debt to worry about. 

2.  We do not have the stresses of bill collectors or wondering where we will find the money to pay the next bill.

3.  We have been able to give financially to those in need (tithe).   

We have studied the methods promoted by Larry Burkett, and can highly recommend his book “Debt-Free Living”.  

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