First Person: Completely Debt Free by Age 35

Debt has never been my friend. I don't like it, I do just about everything I can't not to have it, and if I do get it, I'll try my best to be rid of it as quickly as possible. That being said, it's not always easy to avoid debt.

From mortgages to student loan debt, credit cards to vehicle loans, there are all sorts of ways to encounter debt, but having that debt stick around isn't always necessary. Therefore, here are a few of the ways that my wife and I managed to keep debt to a minimum and become completely debt free by age 35.

Hitting Student Loan Debt Head-on

I tackled my nearly $8,000 in student loan dead head-on once out of college, getting it paid off in less than a year. My wife, who entered graduate school while I worked full-time, eventually came out with over $40,000 in student loan debt, which we then paid off in less than three years. By putting our financial efforts toward clearing such debt as quickly as possible, we were better able to focus on our financial future.

Avoiding Credit Cards and Debt

During these early years, while we were focused on paying off our student loans, we made a conscious effort to live below our means and remain credit card debt free. While we wanted to get our loans paid off in a timely manner, we didn't want to do so by taking on debt in other areas; therefore, over the years, we eventually downsized to just one credit card and paired that with our banking debit cards. We also ensured that we paid off our monthly credit card statement on time and in full.

Buying Cars Outright

We've never had a car payment. I've always taken the view that if I can't afford to buy a vehicle outright, I won't buy it. While I've tended to stick to used vehicles in the process, it's worked out reasonably well and has kept us from having to take on debt and make vehicle payments along the way.

Paying off a Home

We carried a 15-year fixed rate mortgage on our first home, at an annual interest rate just under 5.5%. We made extra payments toward this mortgage along the way to help minimize the amount of interest we paid to our lender. Therefore, when we decided to downsize and sell our home, we were able to use to equity from this sale (even though we lost quite a bit in the sale process due to the housing market bubble bursting) to buy a small, lower-priced condo outright, riding ourselves of the largest form of debt many people carry - a mortgage.

Building an Emergency Fund

We like to at least try to keep a decent sized emergency fund of around $5,000 available. While this isn't always possible 100 percent of the time, having had such a fund available to us in the past has helped us avoid having to go into debt when things like vehicle or home repairs pop up or we have higher medical costs due to the birth of a child or another health-related event occurs. Having this backup fund helps us to utilize this emergency money in place of a credit card or loan that could leave us having to take on debt.

source;http://finance.yahoo.com/news/first-person-completely-debt-free-age-35-173700422--finance.html