While You Wait...to be Debt Free

One of the biggest problems I've had with my new lifestyle and life change is what to do while I'm waiting. What do I do with my time while I wait to go on vacation? Or buy season tickets for a baseball game? Or buy my niece an iPad for college?

This thinking led me to realize that there is really more to becoming debt free or financially independent than just paying one's bills on time. Being aware of one's money, how it's used, and who it goes to is like a meditative practice. It forces you to levels of heightened awareness. For example, in buying a pair of shoes, you have to stop yourself and say, "Is what I'm about to buy a true need or a want?" The very act of thinking before you buy or, to borrow from another phrase, looking before you leap, draws us into awareness about what our motives are for buying things and causes us always to seek the truth in our financial actions.

What I find is that as I separate the wants from the needs, I find myself realizing that I don't really need all that much. So, whereas with an impulse some might be inclined to buy just anything that catches their eye, I wouldn't because it doesn't fit into my values or my goals for becoming debt free.

So what happens is all that time that was spent in the past doing idle things, like window shopping or buying things out of boredom, begins to go by the wayside. The energy that was left to engaging in those things is now in need of someplace else to go or something else to do.

When trying to become debt-free or even after they've become debt-free, some people turn to home economics to fill this energy gap. They grow their own food. They start canning. They learn to sew. They take up some sort of hobby that fills the gap between excess and fulfilling a need. Most people like this do not need to grow their own food to survive. They do not need to sew their own clothes. Even under the guise of simply saving money, activities like these fall short because there are so many other healthful, fast, cost-effective ways to save money and still get food for one's family or put clothes on their back. A simple look at the opportunity costs versus the financial costs of these activities illustrates this point.

Let's say it takes someone 20 minutes to look through a newspaper to find all the stores within a 5-mile radius with sales on fruits and vegetables. Then let's say it takes 3 hours of yard work on average to grow the same amount of vegetables you might buy from the store. On the one hand, growing the vegetables might be a bit cheaper, but on the other hand, buying the vegetables is faster and likely more convenient. The extra 2.5 hours you spend digging in the ground for a tomato could have instead been spent on taking the kids to the park, going to the gym, or reading your favorite blog (which I hope one day will be Simplify and Prosper). That's opportunity cost in a nutshell.

What drives people to make these choices is the need to exhaust the energy that was once used spending money and instead use it something for else. What that something else is can be a confounding question.

What else besides home economics do you do to replace the time and energy you spent spending money? How do you occupy your time while you wait to be debt free?

Car Sharing With Zipcar

Zipcar is one of the more popular car sharing companies now gaining a large share of consumer interest in major cities all across the country, including at over 100 college and university campuses. You can also find Zipcar in some not so major cities like Frederick, Maryland and Carlisle, Pennsylvania. There are also Zipcars in Canada and London.

How it works

To reserve a Zipcar, you just go online and choose the time and location where you’d like to pick up a car. The cars come in various sizes and colors and can fit many driving needs. If a car with your selected criteria is available, you can put in a reservation. If a car isn’t available, you can choose from other nearby locations or different times. When your reservation is over, you return the car on time to avoid any penalties. That’s it.

Membership benefits

For an annual fee, you can become a Zipcar member. The membership allows you access to rent cars in any location around the world. This means that if you are a Zipcar member in Florida and take a trip to DC in July, you can get a Zipcar to use while you are on vacation. It would be good for a weekend trip from DC to Fredericksburg, Maryland, for example, since commuter buses and trains to that area do not run on the weekend.

Being a member of Zipcar also affords you additional benefits. People who use Zipcar a lot can save money by registering for one their frequent user programs. If you know for example, that you will use a car often enough to spend $125 each month, you can enroll in one of the programs for that rate and receive discounts every time you rent a Zipcar. Members are also privy to special discounts at area businesses. In San Francisco, you can get discounts from the Bend Yoga studio, Fog City News, Lombardi Sports, SixFlags Discovery Kingdom and more. Each city has different offers.

Despite all those benefits, the best perk about renting with Zipcar is that there are no hidden fees. Let me say that again: There are no hidden fees. Included with your rental is insurance, roadside assistance, and gasoline. That’s everything you need. You don’t have to worry about maintenance fees, oil changes, or keeping air in your tires. The vehicles are kept clean and they run well.

Is there a downside?

While Zipcar is terrific, I will admit that it would be nice to have the vehicles vacuumed a little more often (I always seem to get the cars with pet hair left in them), but really I can’t complain. Besides, buying a hand vacuum cleaner to carry with you is a lot cheaper than buying a whole car. I can live with that.

What Is Car Sharing?

Car sharing offers all the benefits of owning your own car without all the burden. The concept is like renting studio space. You have 24 hours in a day, and people can sign up to rent that space in 30-minute increments. You can rent the space for as long as a day or more. Then when you’re done, the space is free and open for someone else to reserve. The difference with car sharing is that the “space” you’re renting is not just space but an entire vehicle that you can use to drive as far and long as your time permits.

Sharing vs. Renting

Getting a rental car differs from car sharing because rental cars require you to pay for your own gas and insurance and limit the time you can rent a car to full-day increments. You could not just rent a car for an hour or two, and those items that are included with car sharing—insurance, roadside assistance, and gas—are additional costs when you rent with a rental car company.

Car sharing can save you money if you need to have a car only sporadically. Taking day trips or using a car to transport heavy purchases or moves are ideal uses for a car sharing rental. These are trips that take only a few hours to complete and no more than 24 or 36 hours at the most.

People who will need a car to drive around for an entire weekend or more are better off getting a rental car. The savings generally begins to level out after the first 24 hours. Then the cost of car sharing becomes more expensive than renting. It is likely that the car sharing system was designed that way on purpose. It is best used for local and shorter term trips.

Pros and Cons

The benefits of car sharing are its convenience and low cost. However, because you are sharing a vehicle with hundreds of others, you do run into the following problems:

--Not having a car available at the time and place you prefer
--Ending up with a car that is not up to your own standard of cleanliness

The workaround to these obstacles is, of course, planning. Reserving a vehicle well in advance reduces the likelihood of not being able to reserve a car when you need or want one. Brining a hand vacuum or some baby wipes to spruce up a car before you drive it can resolve the cleanliness issue for most people.

Car sharing is catching on with a lot of people, and those who remain flexible can enjoy the benefits of it the most.

Life Without a Car

Since my last post, I did actually sell my car. The process was relatively simple. This is not to say that going without a car has been all cherries and roses. I've had my fair share of feeling too lazy to walk from a bus stop to a friend's house on more than one occassion, but all in all, I feel great about not having the extra burden of car payments, parking fees, maintenance costs, and the like each month.

Yesterday, in particular, was a moment of truth for me. I was to meet a friend at a location in the city that was not readily accessible by public transportation. I had agreed to do it, and I knew in advance that it would require me to walk about a full mile. I was up for it...until I actually started walking.

My trip was set for midday, at the peak of high summer temperatures and high weekend traffic on city streets not designed for pedestrians. As I walked, I thought about how much faster I'd have gotten to my destination if only I had driven a car. I doubted for a moment whether selling my car was actually the right thing. I complained internally about the heat, about the food I was carrying that had to be refridgerated, about the sweat dripping down my back, about how terribly foolish I must have been to sell my car. I could have avoided all the discomfort and worry if only I were driving.

When I spotted a 7-Eleven, I went in for a Slurpee. Then I realized that I was at a crossroads. I was at a six-way intersection and I didn't know which way to turn. I was lost in a way. I knew the street I wanted was just one block away, but I didn't know which one to take.

My thinking about how I sold my car was like being at that crossroads. I had two options:

--Accept and embrace my decision to sell my car.
--Fret and go back into debt to buy another car.

I knew I did not want to go back into debt, so I just accepted what lay before me. I embraced my decision and came out on the other side of that day alright. I made it to my friend without any trouble (using my GPS) and I freed myself from having to feel any regret.

After having lived through the process of selling a car and continuing to live by that decision today, I wholly recommend going carless to everyone who lives in an area with good public transportation. I'm living the life to tell you about it...with no regrets.

Selling Your Car Can Save You Hundreds Each Month

It's been a while since I've written. That's surprising really because I've been thinking a lot about this blog and all the great information and ideas I want to share with you.

Recently, I finally got around to thinking about selling my car again. I've been toying with the idea for several years, but when living in the nation where the automobile was built, it is sometimes difficult to garner support for such a move from friends and loved ones. I know Americans are dependent on their cars because we're still buying gas like it's free-flowing tap water. It's nearly $5.00 a gallon, and many people have yet to break their stride or their dependency on oil and gasoline.

I have been dependent on my car for a long time, too, but I'm beginning to make more use of public transportation, car sharing, biking, and dozens of other alternatives to owning and driving my own car. If I think about it and remain honest with myself, the only time I use my car these days is when I'm feeling lazy or when I want to do something at the spur of the moment. Yet, as I continue to research alternatives to driving, I am beginning to find that there are even options available that can counter both my occassional laziness and the impromptu errand to the other side of town.

The next few posts will explore the journey I'm taking to sell my car and whether at the end of it all I'll actually do it. I think I will though, and I'll walk you through the process.

The most compelling reason for my considering the sale of my car, of course, is all the money I'll save. I am very excited about not having to pay $5.00 for a gallon of gas and not having to make car payments, insurance payments, parking storage fees, etc.

Now, as I go through this journey, I'd like to hear from you. Have you ever thought about selling your car? What was the defining factor for you that made you decide to keep it or sell it?

Evaluate Your Hobbies and Save

One step toward achieving a more simplified life is to examine your hobbies. If one of your major interests is something that requires expensive memberships, high-priced gadgets, or large amounts of time with little intrinsic return, then you may need to reevaluate how you spend both your money and your time. There is a saying that the best things in life are free. There may be some truth to that, and it could be, for many people, the key to living a simplified and prosperous life.

While many people may already be familiar with this concept, it is much harder to implement than preach because it requires thinking of and adapting to alternatives to things that you may have grown accustomed to doing in a certain way. Let’s take exercise, for example, and our hefty health club memberships.

The alternative to exercising at a gym is exercising at home or outdoors. The principle is simple enough, but why don’t more people do it?

One reason is that fitness machines make the work of exercise a lot easier than it is real life. People accustomed to jogging on a treadmill sometimes comment how much harder it is run on asphalt. The conveyer belt we run on in the gym gives us a little boost of speed that we don’t get when there’s nothing between us and the ground.

Another reason is that people feel like they’re not exercising alone when they exercise with others in a gym. Just being on the elliptical next someone makes people feel they are in a crowd even if they are exercising alone, isolated by the music blaring from their iPods.

Adapting to the alternatives to exercising in a gym requires more thought and effort. People who feel a little slow running on asphalt might try modifying their exercise program to develop their speed rather than giving up or going back to the gym. People who would like to exercise or run in the company of others can join a free outdoor running group, walking group, or yoga class.

Exercise and gym memberships are just one example, but people whose hobby it is to buy the latest techno-gadget, collect stamps, or download the latest novel to their reading device all have options and alternatives to excess spending. Perhaps a common theme to many of these alternatives is the power of collaborating with others.

The alternatives are out there, but it does take some time and effort to make them work.

About Debt

Recently, I had a conversation with a friend about finances. Essentially, I was trying to convince him that the whole mindset most people have about debt being “natural” and okay is hugely flawed. Even Shakespeare advises against it. In Hamlet, he writes:

Neither a borrower or lender be

For loan oft loses both himself and friend

And borrowing dulls the edge of husbandry

We all know how the stress of debt changes people. It eats away at them like a virus, especially when the amount they owe seems insurmountable. Debtors also risk losing their sense of self-sufficiency, of being able to save for things, of developing a dependency on a system that discourages the accumulation of wealth. Similarly, lenders of credit must be cautious against greed, against the loss of humanity, against the root of all evil.

So, this one friend I have says he’s content with debt. Of course, he’d rather not have it, but he accepts his condition and is working to get out of it. But getting out of it is not one of his biggest goals. When I confide that getting rid of my debt is crucial to me and that I think it should also be crucial to him, we end up arguing about it.

What is wrong with wanting to be debt free? What is wrong with wanting to keep the money you earn? This isn’t even about wanting to become a millionaire, but if it happens, what is so wrong with obtaining such a level of financial independence?

Part of simplifying your life includes getting rid of the shackles. Debt is a shackle, a hindrance. So, why on earth do people cling to it?! Why do people when made consciously aware of the dangers and limitations of having debt continue to hold on to it? Why don’t they fight for their lives back?!

My friend holds a belief that I am supposing many other people (and our government) subscribe to. Whether they voice it or not, their actions show that they are comfortable with debt and that in some cases, they have no intention of paying it off anytime soon. In fact, they would just as easily accumulate more debt than look for ways to pay it off faster or pay it off at all.

I don’t have a solution for them, but I do know that for me, controlling and conquering my debt is a top priority. I realize I will not have everyone’s support on this (and by “everyone,” I mean society and friends and family who believe that having debt is okay), but in an earlier post, I talked about how sometimes a person just has to be willing to go out on his or her own. It looks like I will have to do more agreeing to disagree in the miles still left in my journey.