How to live debt-free

By: | News Channel 7
Published: November 04, 2008

In this tough economy, many people are struggling to pay their bills. But you don't have to. How would you like to not have to pay a mortgage, car payments, or credit card bills, and live debt free? One Upstate family shows us how they're doing just that in this Seven On Your Side Consumer Watch.

When Tracy and Janet Painter lived in China for a year, they noticed something. Said Tracy, "It's a cash oriented society. They pay as they go. They don't have any debt. They don't have a lot of stress."

So when they returned home to Boiling Springs, they decided to do the same. First they tracked every cent they spent. Said Tracy, "Eating out, hundreds of dollars a month. You don't realize it."

And they decided what were needs and what were wants. They paid off their smallest debts first and do not use credit cards. Said Janet, "We saw that we were able to make two and three payments per month by saving on the things that aren't necessities."

When the Painters do want something, like a new washer and dryer, they save until they can pay for it in cash. And they have an emergency fund for unexpected bills.

Saving a thousand dollars a month, they finished paying off their home years early. Said Tracy, "We live in what many would consider a starter home, but it fits our needs."

And when they bought the house, they took a loan based on only one income, not two. Said Janet, "If one of us lost our jobs, if we had children, we based it on that instead of what they tell you you can buy."

Now living debt free has freed them up. Said Tracy, "It frees you up in what you have to give. We're able to give back to the church, back the community."

And they have less stress when the bills arrive.

The Painters say learned their money management skills from financial expert Dave Ramsey's book "Total Money Makeover."