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Old 2016-11-09, 15:40   #4
petrw1
1976 Toyota Corona years forever!
 
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"Wayne"
Nov 2006
Saskatchewan, Canada

17×281 Posts
Default Patience and Priorities

We have 1 joint account and have very basic priorities::

In order (barring extreme unforeseen circumstances):

1. Day to day necessities like groceries and gas are a given.
2. Every utility bill is paid when due.
3. Credit cards are paid in full when due (we consider the 19% or 29% interest rates almost Mafia-like).
4. A predetermined fix amount goes into retirement savings every month
5. If there is leftover money then there is no guilt spending it on anything we desire

We are both reasonable and frugal, we won't spend money on what we consider frivolous things just because we have extra money or worse yet, because there is still "room" on our credit card.

Granted there are times when there are major expenses like a new car or major home repairs or a big vacation. These we finance with our own secured Line-Of-Credit (again Bank Loan rates are too high).

And to be fair. we are older and established now but when we were young the priorities were no different. For a while there was no #4. and not a lot of #5.
Even though I easily could have afforded car payments I drove an old Rust-Bucket for several years until College Loans and the House Mortgage were paid off.
And the reason it didn't take 25 (or even 10) years to pay off the house is partly due to the rules above but more so due to the mindset that the first house is not the dream home.
It was very modest. We did not even get close to a house price that the bank claimed we could afford based on our income (as they wrung their greedy little hands under their Solid Oak desk).
Having the house paid off early is what enabled us to get the low-interest secured Line-Of-Credit to cheaply finance things like the next car.

I have many friends and co-workers (read: have the same income I do) that early on got the fancy new car(s) and the big beautiful house in the best neighborhood.
And now 30 years later as we are all closing in on retirement:
We have been debt free for years and enjoy a winter vacation every year.
They are excited to announce that in only 3 more years the house will be paid off and they hope to travel after they retire.
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