Just a 47-year-old mom of 2 in Northern California. My kids are Monkey Monkey(MM) and Drama Llama (DL). I am married to Monkey Hubby (MH). It's kind of funny for me, because I do often feel like I live on another planet or speak another language from those around me. Anyway, I grew up in a debt free, creative, and open minded household. Thus, I was not raised with the preconceived notions that most people seem to pick up somewhere along the line.
Examples?
**It is impossible to pay cash for a car.**
**It is impossible to afford a decent house around here.**
**It is impossible to raise a family on one income.**
You know, stuff like that. Oh, I could go on all day!!
Anyway, these comments always throw me for a loop! & at age 35, I often feel like I am still learning where other people are coming from. I still get these lightbulb moments in my head when I finally understand some preconceived notion that I never learned, but that everyone else is assuming.
The latest???
I am understanding that there is some preconceived notion that debt free must be somewhat equated with *broke* and *cash poor.*
Ding ding ding!
*Debt free* means I am the crazy one who pays off debt at expense of all other financial goals. I never have money for anything else, because I have to pay cash for anything.
Hmmmmm. Interesting perspective. But not anything in line with my personal reality. 
I am sure a lot of this comes from the Dave Ramsey mindset and the popularity of his plan. I have been watching some non-SA debt bloggers whose financial priorities seem terribly screwed up. Okay, I totally understand putting retirement on hold and draining cash for that 20%+ credit card debt. IT's quite a mess, and you do need a shovel to dig out. BUT, what I don't understand is paying down low interest car and student loans while ignoring retirement and not saving any money in cash. ??? Would I Recommend that? Um, no???
& so I get my lightbulb moment.
I believe in being debt free. BUT, I also do not believe in being cash poor and I do not believe in putting the rest of my finances on hold.
I have never been cash poor. I do not believe being debt free and having only $1,000 in the bank. Being debt free does not go in line with having no cash. The opposite is the truth. You need to be able to save and have savings to avoid debt.
I have never scrimped on my retirement savings. Retirement has always been a priority for us.
I think I have noticed it a lot with the car thing, lately. You say you pay cash for your cars, you might as well say you have a third eye. The thing is, if we keep our car 10 years, and we save $100/month, we have $12k cash every decade to replace our cars. IT's really no biggie. It's not a huge financial commitment that drains our savings and that we can never get past. Heck, the reality is dh's car is 11 years old and I will probably save up $5k this year and $5k next year, to replace it. We've got enough cash if that doesn't quite work out, but I honestly have not been saving up for his car for 10 years, anyway. From my perspective, I paid cash 10 years ago, and that's it. Notice how I didn't say we bought a car for $20k. That is infinitely more to the point in being debt free.
When you pay cash for everything, you simply don't spend as much. That is the bottom line and that is the part that works for us. IT's not that I am diverting hundreds or thousands of dollars every year to pay cash for cars or to pay down debt. My experience is the opposite. I have no payments to worry about, and so we have far more money to invest, save, and do what we WANT to do with it. OF course, a cash mentality means you can't just buy everything on a whim. So I think it gives you the added of bonus to give you time to really think about what is important. I don't know how many times I mentioned in this blog that I really want to buy x, y or z, but then the moment eventually passes. By the time the money is saved? By then I have a clearer idea what I truly want, and am not wasting money on a bunch of whims.
Anyway, obviously not everyone equates *debt free* with *cash poor* but I am just starting to understand the mindset when people look horrified when I say that we pay cash for our cars. I think the lightbulb moment came from a comment in the forums. "I would never pay cash for a car because I would never spend all my savings like that." Something like that. As if when you finance a car, you never have to pay that money out??? To me it's kind of semantics. You save up the money first, or you pay it out later. Either way, a big purchase is a big money drain, but there isn't anything extraordinarily negative, to me, about just saving up the money first.
Debt Free, Cash Poor
December 16th, 2011 at 02:12 pm
December 16th, 2011 at 04:45 pm 1324053903
That's it in a nutshell, I think, and it's why I'm going back to DR's envelope system. I have my wallet ready, the credit and debit cards put away, and am going to the bank today to get cash for the next two weeks. It's the only thing that works for me.
December 16th, 2011 at 04:45 pm 1324053951
December 16th, 2011 at 05:43 pm 1324057413
December 16th, 2011 at 07:02 pm 1324062163
Saving up for things is hard. Not impossible. It means self-sacrifice and paying attention to your finances and being organized. It means knowing what your goals are and figuring out ways to achieve them. It means keeping focus when everyone else is buying the latest must have gimic. But it's amazing how much easier saving becomes the more you do it, the more it becomes a habit.
December 16th, 2011 at 10:25 pm 1324074313
December 17th, 2011 at 01:49 am 1324086572
So true!
December 17th, 2011 at 02:37 am 1324089465
If my car can just hold out another two years ... I might be able to replace it with cash. *cross fingers*