Tuesday, July 14, 2015

“Home, Debt-Free, Home” Chapter 2 Soul Crushing Debt

 Chapter 2

Soul Crushing Debt

Honestly, I know some people are already losing interest in this financial babble. But, if you are serious about owning our own place debt-free, you have to learn to get focused on getting out of debt first.

We ended the first chapter with the fact we were basically, hard-working people in debt up to our eyeballs. Then a friend had a conversation with us and handed us a book entitled "Aftershock" that changed our thinking entirely. We sat down and had a talk and decided that we had to change our way of life before it was too late...

While I don't ascribe to all of their solutions, what I found was real assessment of the financial crisis the United States in currently experiencing. This was the impetus for us finally making the decision of getting out of debt & actually owning our home and cars.

First, I would like to to pause right now and find an envelop, any envelope will do. In fact I think it would be ironic if you happen to find an envelope that your credit card bill came in.
Then find $20 and put it in the envelope. Hang it on our fridge (next to your goal maybe) or put it in a drawer. I prefer the fridge. This is the beginning of you savings at home.

Now is the time to start tightening your budget.

While this is a silly video, I think it illustrates how people often think. If you start with disciplining yourself to set aside real money for your purchases, you will be further ahead than most people.

Don't buy stuff you CANNOT afford
If you don't have any money, you should not buy anything
If you want something and you don't have any money...you don't buy it
Seriously, if you don't have the Money Don't Buy it
It's not that confusing.

My dad was the son of a coal miner in Southern IL. There was this song my dad used to play on the record player the title was “Sixteen Tons” by Merle Travis and sung by Tennessee Ernie Ford, the chorus went like this:

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

In that era working as a coal miner, led to soul crushing debt. The coal mining company would pay the workers with scrip coins, which in turn could only be spent at the company store. Their scrip pay didn't match the cost of the inflated prices at the company store, therefore the miners only got deeper in debt each day. That is why the songs laments, “I owe my soul to the company store”.

Coal Mining Company Scrip Coinage

While the scrip pay system was abhorrent, credit card debt and mortgages even more heinous. Not only are you in debt, you pay much higher amounts of money in interest. You ultimately will be paying much more money back, sometimes up to 30%.
In some ways I want to apologize that these are not happy posts, But, the reality is we got into debt on our own & it's time to pull up out boot straps and start be accountable to ourselves and our families. We started this series to show you how we paid cash for our new home, in the end it's all about focusing on getting out of debt.

Are you ready to stop owing your soul to someone else? Have you started the “CHALLENGE”?
Did you tuck your $20 in an envelope?
I'd really like to know if you are still with me here, if so pop back on Facebook and respond with $20.

Feel free to join our community at Perky Gramma Teaches on Facebook. We have a nice little group of people and we share various vintage skills & tips. It's all about the journey of farming/homesteading.

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"Home, Debt, Free, Home"
Chapter 1: You Must Be Rich

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