Discover Debt Freedom!

There’s a commonly held belief that college students are dirt poor and have to find ways of living on practically nothing, and it’s absolutely true. Most students believe they don’t have time to work any serious amount of hours while they are in school, so they don’t make very much money. For being in college, I am doing rather well, but choose to live on next to nothing anyway, because it allows me to put away a ton of money in savings and investments for the future. There are months when I live on 20% to 30% of my income easily, and I really only spend about $600 a month. Here’s how I do it.

The biggest expense that people generally have is their home. Since I’m in college, it really doesn’t make sense to consider buying a home. I had two options for living, a dormitory and a mandatory overpriced meal plan that would cost around $2000 for a semester, or I could try to find a house or apartment to rent. I decided that it was about time for me to move off campus, so I found a room-mate, and we started looking for places to live.

We must have looked at 10 different apartments and houses before we found a winner. It’s only $350 a month plus utilities, and it’s not totally a trash-heap. The utilities average $150 a month between city utilities and the home heating oil bill, so we’re doing pretty well. I do happen to live in rural South Dakota, so that makes the real-estate part of the process much easier. This just can’t be done in a lot of major cities, but don’t think you need to have a very big and fancy house or apartment when a reasonable and livable place can be had for a lot less, if you put the effort in to find it.

After I spend my first $250 a month on housing and utilities, I generally like to eat too, so I buy some groceries. The small town of Madison does not have a Wal-Mart or other big grocery store chain, but fortunately my room-mate commutes to Sioux Falls (a city of 150,000 people) every weekend. We share the grocery bill for convenience, and I usually only spend about $25 a week on food for myself. I also have this habit of eating out after church on Sundays, and on occasion when I really don’t want to cook, which adds up to be another $50 a month.

I’ve got all of the basic requirements of living done, and I’m only at $400 a month. I need gasoline for my car, which averages to be another $50 a month fortunately I don’t need to do a whole lot of driving except to visit the parents that are an hour away every now and then. Oh, and my car is paid for by the way, so I don’t have to deal with a payment for it.

I’m getting married in August to a very wonderful woman, and I like to treat her as best I can. I usually buy her flowers once a month, and take her out to eat once or twice, so there’s another $50 spent. I know I don’t need to spend that much money on her, but I like to treat her well.

For us young people, television and the internet seem to be necessities, so we pay for high-speed cable internet, and cable television. That’s about $80 a month for both of those between me and my room-mate.

We’re at $540, and there’s $60 to go. This money goes to a number of different things, sort of a slush fund if you will. I know I’m going to spend money during the month on entertainment, and random things I might want from one of the box stores, but this is stuff that I never really know in advance, so it serves as a miscellaneous line in my budget.

I have no debt to speak of, so I don’t have to write any checks for things such as big nasty credit card payments, home equity loans, automobile loans, personal loans, and the like, which is very nice. Oh, and by the way, not borrowing the money in the first place is the best way to get and stay out of debt.

There you have it, it’s not pretty, it doesn’t have a lot of luxury in it, but it’s more than enough to give me a very satisfying standard of living and allow me to do the things that I enjoy doing and save a whole mess of money in the process.

I have no debt to speak of, so I don’t have to write any checks for things such as big nasty credit card payments, home equity loans, automobile loans, personal loans, and the like, which is very nice. Oh, and by the way, not borrowing the money in the first place is the best way to get and stay out of debt.