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When Renting is a Wise Choice

We’re rather radical when it comes to finances. We live on a cash budget, we don’t have credit cards or debt, we just finished up saving up to pay cash for our first home—oh, and we’ve also rented our entire marriage—all seven years of it so far!

Now, let me reassure you that I’m not here to make the case that everyone should rent, or that you should only buy a house if you can pay 100 percent down. Our circumstances were unique: We had a really good head start—we went into marriage without debt, and we also had all the money saved up to pay cash for law school. Because of these factors and the good income we now have, we have been able to live on significantly less than we make, which has allowed us to save enough to pay cash for our first home.

While I don’t expect many people to follow in our exact footsteps, I do think renting gets a bad rap. In fact, I’m going to make a counterintuitive statement: I think renting can be a really wise choice for some situations.

Read the full article.

Note: This article was written a few months before we bought our house. Also, I just thought I should clarify that I had committed to writing three articles for Currency.com months ago — and just found out a few weeks ago, to my dismay, that this new financial site was going to be sponsored by American Express.

I would not have written the articles for them had I known of the AMEX sponsorship, as that would be a conflict of interest for me as I do not support or encourage the use of credit cards. However, the articles were already written and slated for publication so I wanted to share this one with you as I’m often asked whether I believe renting or buying is a better option.

photo by ASurroca

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105 Comments

  • Jolean says:

    We, too, have rented all 8 years of marriage. It has been a perfect situation for us. I agree that most people think of renting as silly or a waste of money, but for as little as we pay per month, it has been perfect.

  • Erin says:

    While I agree with you that credit card use can be dangerous for many people if they are not careful and savvy with their money, I don’t think it’s fair to completely disavow their use.

    My husband and I have had credit cards for our entire marriage and have NEVER carried a balance. We only buy with our credit cards what we know we could afford with cash and we pay off the balance each and every month. We have many reasons for preferring to use credit cards over cash in most situations:

    1. It is much easier to keep track of your spending when you are able to check your statement either monthly or even daily. My husband keeps a very detailed Excel workbook budget where he tracks each and every thing we buy. Sometimes we lose or neglect to get a receipt for a transaction and he is able to catch those by monitoring and reconciling our statements.

    2. Online shopping is impossible with cash and dangerous with debit cards. You have little to no recourse if someone gets your debit card info from an online database and uses it fraudulently. With a credit card, you can dispute the charge and are not responsible for it.

    3. Rewards points/cash back. We have flown for free many times over the years due to our rewards points on our credit card (including a flight to Ireland a few years ago). We also got a KitchenAid mixer for free several years ago with our points. This would not have been available with a debit card or cash.

    This all being said, credit card use should be done wisely and only if you are very careful with your money.

    • Erin says:

      @Erin, By the way, I appreciated your article. I agree that renting is the better choice for many people and would have saved many people from financial ruin in the past few years 🙁

      • bethany says:

        @Erin, My Cousin and her husband are debt free but carried one credit card because they were wise, as you say, and never carried a balance at the end of the month. Despite his great credit score and their perfect payment history the credit card company decided to start charging a $500/year nonrefundable fee to just use the card with no advance warning. Needless to say, he paid off the fee, cancelled the card and now only uses his debit card when needing to make a plastic purchase.

        While I think you are correct that it is possible to be responsible with credit, there are still ways for them to charge you that would never happen if you just had a cash system.

        • brookeb says:

          @bethany, I don’t think they can do that with no advance warning. Or, if they could, they can’t anymore due to regulations. I received a warning on mine that it was going to a yearly fee, and I had 3 months to cancel it if I chose.

    • Crystal says:

      I agree that a very small percentage of society can use credit cards wisely. Most, however, have a lack of self-discipline. In many cases, credit card usage can lead to financial ruin or at least financial difficulty. Because of this, my husband and I have chosen to completely avoid using credit cards as we feel it would be hypocritical to do otherwise. In addition, we cannot, in good conscience, endorse the use of them as we have seen too many families suffer as a result of credit cards.

      That said, you are more than welcome to use them if you can do so with self-discipline. However, I strongly disagree that online shopping with debit cards is dangerous. Visa credit cards have exactly the same protection as credit cards and there is zero liability: http://usa.visa.com/personal/security/visa_security_program/zero_liability.html?ep=a_cpc_rm_google_security&gclid=CJyMo7ab96ACFRQKswodSG-Xvw

      In addition, many debit cards now offer rewards.

      I think much better than paying with other people’s money (which, in reality is what paying on credit is — even if you have the money!) is paying with your own hard-earned cash. It’s a beautiful thing! 🙂

      • Erin says:

        @Crystal, I didn’t realize that things had changed for debit cards. Thanks for the update!

        One last thing on credit cards: your credit rating. To start, I have to say I think it’s totally awesome that you were able to pay cash for your house. That was always my dream but the house prices in Denver just are too high for that to have worked for us. Instead, we decided to get a mortgage and strive to pay it off early.

        One thing that SHOCKED us when we applied for a mortgage was that we were a bit of a risk for mortgage companies because we didn’t have enough credit history. We’ve only ever had the one credit card, never had a car loan, etc. The 2 things that saved our credit worthiness were our one credit card and my husband’s student loans. These were forced on him by his mother before we met and were payed off by us in under 2 years after graduating college (nearly $100k in loans). If we didn’t have those 2 things in our history, we probably wouldn’t have been approved for the loan. Isn’t that insane? I couldn’t believe that someone with loads of debt from buying cars, furniture, electronics, etc on credit would be a better candidate for a home loan than 2 people like my husband and me. It really is a backwards world.

        • Lisa says:

          @Erin,
          I am glad to see things have changes with debit/credit cards. Ours was hacked online, and it was NIGHTMARE getting it fixed. We still use our credit card when we rent a card (because they freeze at least $500), but other than that we are debit as credit people!

        • @Erin…good job on having very little credit.

          As a long-time residental loan officer and former business banker. You can get a home loan without a lot of credit. You need to find a mortgage lender that has been trained in some underwriting and his/her company has underwriters that manually underwrite. If you can show that your utility bills and rent are paid on time and you have a down payment you WILL be able to borrow money to purchase a home.

          Thanks Crystal for all you do.

      • Laura says:

        @Crystal,
        I only partly agree with your statement about the safety of debit cards. You will get your money back in case of fraud – BUT – while the bank is investigating it, you will be without your cash. This is how my bank (and several others handle it) Until they can figure out the situation (sometimes 10 days) you are without your money…. Not too many people can afford to be in that situation. With all due respect, it is completely foolish to purchase online with a debit card. You will only need to have your info stolen one time and I guarantee it will wreak enough havoc to change your opinion on the “safety” of it. I do agree with you about people’s lack of responsibility with credit cards which is why we only use them for online purchases.

        • Crystal says:

          We’ve actually had our info stolen — to the tune of $3,000. Guess what? With one phone call and one hour’s worth of time, everything was resolved. And we still use debit cards unashamedly. 🙂

          You are more than welcome to call me foolish, but I think it is much more foolish to be using a credit card to buy things you can’t afford with money you don’t have. (I know that not all people use them like this, but many do and that’s why, in good conscience, I can’t endorse or encourage the use of them here because I don’t want to encourage people to use something which could potentially wreck their finances — or even more!)

        • Taryn says:

          @Laura,

          This was my experience about a year ago too. My debit card information was stolen and several thousands dollars taken from my account. Sure, the bank dealt with it quickly, but, for a little over a week, I was just “out” that money. Thank goodness we had two bank accounts and a savings account or ALL of our bills for that week would have been late. I do not use debit cards online anymore either.

          • Crystal says:

            Thanks for mentioning this! This is one reason why we have multiple accounts — which I think is a why practice in general when it comes to money. We don’t pay bills from the same account that we use to order things online, etc. It’s just safe practice to have your accounts diversified and it also helps us track our money better.

            If you don’t feel comfortable using a debit card online, there are other are alternatives to a credit card, such as a pre-paid cards or Paypal.

        • WilliamB says:

          @Laura, You can also use a gift card on line. Buy yourself a Visa/MC/AmEx gift card and you’re set for online purchases without putting your accounts – or your privacy – at risk.

        • @Laura, I’ve had my information stolen and used online for some pretty shady stuff. Not only did someone use my card to rack up over 500 dollars over a month but they also created web accounts in my name with the card. SHADY websites. I was very dismayed by this, it took a few weeks to get the money back, but It’s totally put me off from using my debit card online. If that had been my checking account I wouldn’t have made my rent that month! It took some real stressful days to get it straightened out, and so now we use a prepaid credit card for most things online. For things it’s just easier to pay online on a monthly basis, I do use a regular cc and pay it in full asap. In fact I sometimes write and mail the check the same day I make the charge, lol. I think it’s fair to say that in some cases using a cc can make sense, but I don’t think it’s just a matter of us being mindful and responsible, I don’t trust the cc companies all that much personally. I once had a cc up my interest rate to 28% because I went over my balance (because they lowered the limit without notice, pretty shady, but this was years ago.) So I try not to use credit if I can avoid it. I can see the pros and cons but I think it’s just like anything else, something that works for some folks won’t always work across the board for everyone. 🙂

        • @Laura, I also forgot to mention that a once I mailed a payment to a cc company just a day or so before it was due, so they got it a few days late, and you know what they did? they held onto the check for about 25 days, before cashing it, so they could charge me a late fee and also up my interest rate. When I called to find out what was going on I was told it was the normal practice for them to hold onto a late payment until the next payment is due the following month. I totally recognize that I was at fault for not sending it sooner, but I still thought this was a rather shady practice because they could then report on my credit I was 30 days late, when in fact I was only 2 days late. :/ I don’t like giving them that power.

      • Laura says:

        @Crystal,
        Using multiple accounts clarifies things a bit – thanks for sharing that idea.

        I do respect your stance, but there are a lot of us who have the self-control and forethought to pay off our cc’s every month. The blanket statements about the evils of credit cards is probably what causes some of us to bristle. If you don’t trust yourself with one, then I totally respect that … but you alienate people that make different choices than you about their finances. I wish you were as gracious about this subject as you are about the cash-only house purchase.

        • Crystal says:

          I’m so sorry that you feel like I’ve been ungracious. Can you point out specifically where I’ve been unkind towards you or others regarding this? I certainly have not meant to come across in a harsh manner. Please forgive me! As far as I know, I’ve never called credit cards “evil” or the users of them “evil” but if I did somehow or somewhere, can you please let me know so that I can redact those statements and apologize profusely?

          Let me re-iterate again what I’ve said in the comments here and that is: I believe there is a small percentage of people who can practice self-discipline and use credit cards. However, we personally do not feel comfortable using or endorsing them because of the awful effects we’ve seen the excessive use of them have on families. If you could read the emails I receive every week on the tragic financial circumstances families are in — often through massive credit card debt — you’d likely understand more why I can’t endorse the use of them personally.

          I hope that clarifies things a bit; but if not, again, I apologize for seemingly coming across as harsh and ungracious. That certainly wasn’t my intent at all!

          • Crystal says:

            I just re-read through my earlier comment to you above and realized that I left out part of what I meant to say when I said I thought it was foolish to use credit cards. Oops, now I realize why I came across as ungracious. I’m so sorry, please forgive me. I’ve amended my comment to reflect what I originally intended for it to say. If I’ve been harsh or ungracious elsewhere, please let me know.

      • Liz says:

        @Crystal,
        I agree that credit cards are not a good thing for most people. You said you can’t endorse them because of the negative circumstances they put a lot of people through. You endorse cash use and people are also very irresponsible with cash. Cash also can cause tragic consequences. I am not disagreeing with you at all. I’m just saying that people are going to be irresponsible with credit cards, debit cards, cash and checks. I very rarely use credit cards unless it’s for points towards a reward and I pay it off asap. It does take someone with a lot of discipline to be responsible with a credit card and not get into debt. The same is said about cash. People can blow all of their cash and not have enough to pay their bills, which still results in debt. I just think it’s a matter of responsibility and not what form of payment they are using. Either way, if you are not responsible, you will still end up in financial troubles.

        • Crystal says:

          You’re right, indeed. However, I think it’s easier to get into more financial trouble if you are using other people’s money than your own. If you’re cash only, when you run out of cash, well, you’re just done spending. Credit cards, on the other hand, you can just keep spending and then you have to pay a boatload of interest.

          But you’re absolutely right that if people can’t learn responsibility, then no matter what they use is going to cause problems.

  • Emily says:

    Go renting! We owned for first home for just under two years; the job my husband had in that particular town ended up being a disaster, and we had to move in order for him to take his new job (which he loves 🙂 We sold that home and managed to break even financially, but it was such a source of stress for us. For the past year, we’ve been renting a TINY little house (700 square feet), which is a tight fit for my husband, myself, and our two little boys. But we only pay $500 a month for this house, and that includes ALL of our utilities. It even includes lawn care! Living in this house hasn’t always been easy or comfortable, but over the past year, we’ve been able to give generously in a way we never have before. Now, we feel like God’s calling us to buy another house in a particular town. By staying in this rental for just one more year (one more tight, squeezed-in-like-sardines year), we think we’ll be able to save the extra $15,000 we need to have a nice downpayment and cash to cover our closing costs. We wouldn’t trade this rental for anything; it’s been nothing but a blessing for us!

  • Jeannine says:

    We have rented most of our 16+ year marriage.

  • LeAnna says:

    Renting is the way we go also. My husband is military and I’ve seen many families live apart, because they cannot sell their house. Spouse gets a new duty station, and the other spouse stays behind with the kids until the house is sold.
    As far as my family goes; we plan on moving when my husband retires. Why buy a house when you know you will move in a few years? 🙂

    • Heather says:

      @LeAnna, we are also military and have spent two of our three years of marriage separated – during the time we’ve been together, we have rented. It can be frustrating to watch friends look for a house that’s perfect for them, but we just aren’t in a position to do that. We try so hard not to feel behind on the “American dream” and most days we manage to keep our eye on the ball, but there are those times when we think it’d be nice to have a place that’s “ours.”

      • Jenna says:

        My husband is also active military, and we haven’t purchased our first home yet. It would have definitely put more stress on us to buy/sell while under the unknowns of the military. We hope to buy in the next few years, after he gets out in 2011!

  • Suzy says:

    I love credit cards! They are not an evil thing if you use them correctly and I am with Erin, we use them correctly. I have had a credit card for 20 years and only once by mistake did not pay it off competely. I think I must have reversed my numbers. I had to pay $3.17 in interest that month. It is funny but that was probably 15 years ago and I still remember the exact amount.

    Every month our credit card bill comes out in full from our checking account automatically. What could be better.

    We have redemed 10 flights in the past 4 years to anywhere we wanted to go in the country. This has been wonderful since my in-laws live 2000 miles away and we love to fly each of our nephews out to visit use when they turn 13 to show them they are a grown up. All for FREE. No annual fees, no interest just plan free. What could be better.

    • Suzy says:

      Oh and both my husband and I have credit scores in the 800’s, no debt and 6 figures in the bank, though 4 years ago when we got married, my husband had $75K in student debt.

      Good think I am a saver and my husband likes to invest. We complement each other.

  • I enjoyed this article as well as the one you linked to in it on getrichslowly. It’s hard to explain to people sometimes why we’re renting, but I think those who question it the most are those who had the advantage of a much more affordable market (we live in California) 30 years ago than we do today. I used the NY Times rent v. buy calculator mentioned, and it said that it was never better to buy v. rent at this point, not even after 30 years! We have several friends too who got in when the market was at its peak, and for those who were able to afford staying in their homes, they are still forced to stay there even if they want to move unless they want to take a $100K loss. When things break down as well, we are much more thankful that we don’t own, even if it means being unable to make renovations or changes that we would like to do to our place for the time being.

  • marney says:

    I don’t see how posting your article on a site associated with AMEX is an endorsement of credit cards. They are involved in many other financial services too. How about travelers cheques!

    • juli says:

      @marney, I agree! They also have charge cards that have to be paid in full each month. My husband has worked for them for many years. I think it’s great of them to help people with financial problems. As far as I understand, they like their balances paid in full each month and get most of their income from merchant fees not interest. I know debit cards are supposed to have the same security as a credit card but I recently had fraud on my debit card and it took a week to get the money back in my account. When I’ve had fraudulent charges on my Amex card they’ve been taken care of right away.

  • Jan says:

    4 year ago I would have said renting a house was crazy but wow how things have changed- you were ahead of the game! I know so many people who cannot sell their houses.

  • Melodie says:

    We have rented all our marriage too! 5 years running now with no home ownership in sight. Our situation is somewhat unique, but it fits in the “wiser to rent than buy” category.

    Here in NJ, where property taxes are the second highest in the nation, I find it a blessing to be able to rent our tax exempt house from our church. Our rent is far less than yearly property tax payments to Big Brother would be. On top of that, our water utilities by law are to be paid by our landlord. That’s another blessing of renting for us.

    Needless to say, when renting is less expensive than owning because of property taxes, and when “building equity” is just throwing money into a big hole in the ground because of a housing bubble that just popped and is resulting in an endlessly falling property value in your area, renting is a great idea.

  • Megan says:

    Thank you for all the credit card comments. I agree, that some people don’t have the self discipline, but I truly love having a credit card and using other people’s money knowing it will be paid off by my money each month. I think there are many pros to credit cards and if you can’t handle one, don’t have one. But most likely, if you read this site, you aren’t having a problem with spending too much money and a credit card could be very beneficial for you…..it can help your credit score and help for financial bookkeeping and so on.

    I also agree that renting makes the most sense in some situations. But I really wish a point would be made that having a mortgage is not a bad thing. I am very anti-debt….I’ve never had a car payment or credit card debt. I took a very small loan to finish my mba and be able to do a study abroad (the main reason I took the loan was to spend three weeks in europe studying international businesses…don’t regret that a bit….it was a great deal and I got to see many things that would have cost me a lot more if I had waited until I had cash to pay for a trip like that). My mortgage is the only debt I have had and I’m sure glad I have. I had a really big down payment and after six years, when we moved to another state, instead ending a lease and walking away having spend around $80,000 on rent, I walked away with $150,000 of equity to put into my next house. I totally agree….if you can’t afford a house, don’t buy one. It’s put the United States in a real estate mess because of all the people who have walked away from their houses. And I agree, if you think you might be moving, don’t rent. However, in many, many situations, the best thing to do would be to buy a home. And I think that was very discredited in the article.

    • Crystal says:

      I absolutely agree that a mortgage is not always a bad thing. However, the emphasis of this article was on why renting can be a good thing so I stuck with that topic. In the future, I hope to write more on when I think it’d be a good idea to buy (and take out a mortgage) vs. rent. Because I definitely think that a mortgage can be a good choice in many circumstances.

  • Audrey says:

    I love this! My sister bought a house a few months ago, and everyone is so proud of her for doing it. She didn’t pay in cash, but she and her husband are making payments. My husband and I moved an hour and a half away shortly before that, and everyone has been on us since we got married 4 years ago about buying a house. We just aren’t ready! We don’t even know if we’re going to stay in this part of the country. We love it here, but he can move up quicker in his job if we’re willing to relocate. A friend of mine bought a house 4 months ago, and now they have to move because he lost his job, and they can’t afford their house payment now. I think it might even be in foreclosure. Yikes!

    I have a question though…. I know you talk about all these ways to save money, and anyone can do it, etc. etc. but it just doesn’t seem possible for us! I use coupons to save money, but even then we have no wiggle room in our budget for anything. We never have. My husband makes $1400/month (sometimes $1600… this is way better than what he was making before) after tax. They’re automatically taking out from his budget for insurance, retirement, etc. We just moved to a new apartment last month that is cheaper than what we were renting before… but after months of searching, this place is the cheapest in the area (I’ve heard this part of the country has pretty expensive housing compared to other places). We’re paying $900/month here (water, sewer, and garbage included). That leaves $500/month to spend on the REST of our bills…. phone, electricity, internet, etc. We don’t have cable (for obvious reasons), and we have a great deal on internet and phone, and I use coupons like crazy to save money on everything, but with our two kids (3 and 1), it’s just barely enough to get by (well, it’s not right now, we’re getting behind on bills). If we want to go visit our families for the holidays, we can’t afford the $40 gas money it takes! I hate how broke we are all the time (and always have been). Thankfully, the only debt we have is a bill we’re a couple months behind on. But we don’t have a car payment (our old car is desperately in need of repairs though… I’m afraid the tires are going to fall off, but we can’t afford to fix it!), we tithe, we don’t have credit cards, etc. But it just seems impossible to set money aside for big purchases (or even little purchases, like getting the car fixed!). I have NO idea how to remedy this situation. I do odds and ends from home (although my blog only brings in about $2/month…. I’m beginning to think that’s not even worth the stress)… I clean houses when I can, and that sort of thing… but that brings in an average of $25/month, and my husband is already burnt out working as often as he is. He’s had no luck finding a second job (he’s already working so much already), either. I’m just not sure how to get ourselves out of this hole! We’ve even though about not tithing periodically, but that sounds even worse than where we’re already at!
    And, as much as I try to trust God when it comes to having kids (children are a blessing, etc.), I just feel like we can’t even take care of the ones we have, and if we get pregnant again, I’m not sure what we’ll do.
    Sorry for whining and complaining… we really are blessed with each other, and we all have great health. I guess I just feel discouraged a lot, because we want so badly to save money (we don’t ever want debt), it just doesn’t feel possible. We’ve been trying for 4 years to save money and it just gets depleted because my husband’s hours get cut (which seems to happen to us a lot, no matter who he works for) and he can’t find more work. Any advice or encouragement for those of us who do rent because it’s cheaper, but have to use up more than half our income on our housing?

    • Allison V. says:

      @Audrey, Wow, I am so with you! I’m a stay-at-home mom, we have three kids preschool age and under, and up until June, my hubby made $10/hr, and his work averaged 35 hours a week! Talk about tight! Our rent is $620, elec, cell, internet, and auto ins. are about $350. We have old paid off cars, and we’re lucky to fill our gas tanks. Now granted, we get food stamps & WIC, because we’d be awfully hungry without them, and our kids are on state insurance. My hubby also smokes, but I have no sway over that. MoneySavingMom has enabled me to take my diaper money (I use cloth a lot too) and turn it into diaper/personal care/household products money. We paid off all our debt in 2009 with our tax refund, and paid $1000 cash to have a second car, one that would actually hold all three car seats!

      I have learned so much about contentment the last few years, what is really necessary to live. God has provided, but not necessarily when most people would think as soon as they needed it. That old car we bought? I spent the summer of 2009 carrying gallon jugs of water everywhere I went, and every time I got in the car, I refilled the leaky radiator. The money to fix it came just before winter’s freeze. Then the tires were bald. BALD. Steel-coming-out-of-the-rubber bald. I couldn’t drive on the highway, which meant my normal 20 minute drive took 45 minutes. Drove that way for months. I knew the tires could blow any second! And you know what? They did…in my own parking stall. Not stranded in the freezing weather somewhere with my kids. That was God. And I was perfectly okay with it. It wasn’t a bad day. Tax time rolled around soon enough, and we paid for new tires, and other repairs that had put the car out of commission.

      God is taking care of me in so many ways right now…we should be evicted but we’re not! I won’t get into it here because it’s a long and personal story, but if you need someone to talk to, email me at couponalli at hotmail dot com. You are not alone!

      • Crystal says:

        I so appreciate your spirit of contentment in the midst of what many might consider to be a downright “awful” situation. Thanks for sharing how God is continuing to look after you. I know He has some incredible plans for you and your family; don’t lose that spirit of trust and joy in the midst of difficulties!

        By the way, have you ever considered blogging? I think a lot of people would love to read more about how you’re surviving and making do — and it would be a great encouragement to others who are in really tight financial situation. You could monetize the blog, too, so that it’d be worth your time. 😉

      • Audrey says:

        @Allison V., God is so good! It’s encouraging just reading that. God always provides… ALWAYS. It’s just so exhausting sometimes, because I think God should provide for us at certain times (like before the bill is due, for example!), and God has other plans. And now, our move out bill from our last apartment came, and we’re going to have an extra bill every month for the next four months…. $230/month!! I have no idea how we’re going to do this. We are praying that God provides a second job for my husband, and possibly a job for me as well (my husband works days right now, and he would work evenings with his second job, and I’m hoping to find a job working nights while they’re all sleeping so we don’t have to find a way to pay for day care as well, since we don’t have family in the area). I’ve been playing the drug store game for a while, but there is only so much I can do since we don’t have a printer (and can’t afford one… it’s one of our many tax return plans) and don’t know anyone in the area where we live. I’m really praying that God will give us a financial boost soon. I don’t normally stress about things like this (I’m normally very laid back and know that God always provides, so I don’t need to worry), but it’s just getting exhausting. We have actually tried taking out a small personal loan that we would pay off with tax returns, but our student loan debt (that we paid off in March) is still showing up on our credit report as a debt, so they denied us. Which is probably a good thing, since it would just put us further in debt, ha!

    • Crystal says:

      I started a comment in reply to you and it turned into a post. So, if you don’t mind, I’m going to save it to post in the next week or so — once I finish editing it! Be encouraged, there is a world of possibilities out there and I think you all are very much on the right track. I’ll just share some things which have helped me and some ideas for increasing your income so you have actually have wiggle room to save.

    • theresa says:

      @Audrey, i am right there with you audrey – a few things that came to mind as i was reading your story were: consider using a magic jack to further reduce your phone/internet bill and get in the drugstore game, especially rite aid – i made money on diapers just last week and i do not pay for any health and beauty products anymore – plus, if the blog is a stress-producing, you might consider swapping out that time spent over to using couponing websites to reduce your food budget – and get energy-conscious like crazy! keep everyone in sweats all winter if it means being able to keep the heat down! and i will remind myself while i tell you that God works all things after the counsel of His own will, that His will is good, perfect, and pleasing, and that He works all things together to those that love Him! Be encouraged!

      • Audrey says:

        @theresa, we have considered using a magic jack, but we’re currently in a cell phone contract (that we committed to when things finally started looking up for us a while back… my husband was getting steady hours, and all that), so we’re stuck there. Thankfully, we don’t have fancy extras or anything, and we use a pretty cheap company, so we don’t pay all that much. As for internet, we shopped around for the cheapest provider (which is ONE option in the area of town we live in, and my mom is paying for it!), so not much we can do there either. I have also gotten into the drug store game, but we don’t have a printer (and can’t quite afford one… it’s a tax return plan!), so there’s only so much I can do about that. And we actually haven’t turned the heat on since February. Since we always live in apartments, we’re used to being sandwiched between other apartments, and our apartment is always really warm (and we don’t have A/C), and we keep the lights, computer, etc. off when not in use. I’m telling you, we’ve tried everything to keep costs down! haha. And like Allison V., we get food stamps and WIC, which helps SOOOO much. We don’t get a lot, but if I use coupons and cook from scratch, what we get with food stamps is enough to keep us from going hungry. I hate that we get that stuff, it’s honestly embarrassing, but it helps so much.

        Thanks so much for the responses! I’m feeling so encouraged already!

    • anonymous says:

      @Audrey, When we lived in LA we were in kind of the same situation. They always say not to spend more than 25% of your take-home pay on rent/mortgage, but when you are in a high cost of living area there is little choice. (When we lived there, buying was not an option because of the incredibly expensive home prices.) Unfortunately, in the current economy there are a lot of people in your situation. I guess the only thing to do is try to hang in there, do the best you can with what you have, and keep praying!!

    • RachaelP says:

      @Audrey, Audrey, thanks for sharing your story. It really encouraged me to hear someone else is going through hard times. My hubby brings home about $1300/mo…it’s VERY hard. We have two little ones-three and one year old. My hubby lost the job we never thought he’d lose due to the economy a year ago. We had an emergency fund and no debt other than our mortgage so we were ok for a while.

      I am so thankful that my husband, as soon as he found out his job was ending, started looking for work. He worked at the hospital and had 15+ years experience in the medical field…when his job ended, he worked for a friend at a construction company. He started out working in the office then at Christmas, they had to send him out to ‘the field’. He worked in 0 degree weather, rain, ice, etc. just to provide for us. He is now working at a nursing home getting back into the medical field and is going to school full time as well.

      I am really struggling with finances right now. It is scary having such little money and trying to provide for our little ones. I recently lost 10 lbs. and don’t have money to buy clothes that fit. Our kids are going on Medicaid and I just signed up with WIC…food stamps is not that far away either, I hate to say. My friends say that those gov’t programs are there for people who need them. I’ve always been one to say not to rely on gov’t and now here I am accepting the help with open arms.

      My business playing the harp for weddings has not gone well AT ALL this year. I’ve done the most advertising I’ve ever done and fully expected to be busy. I have only had three weddings this year (that is VERY VERY slow). I’ve started a business selling diaper cakes and burp cloths and while I haven’t sold any on my Etsy account, I’ve sold some things here and there.

      So far, we have not missed paying a bill, thanks to the grace of God and to our friends and family. Hang in there and I’ll be praying for you!!

      • Crystal says:

        I can’t imagine what it’d be like to be in your shoes, but I’ll be praying for you!

        Just a few ideas I had when I heard you play the harp:

        Have you considered advertising your harp business for other functions outside of weddings? With the Christmas season coming up, I’m guessing there would be office parties and other Christmas functions that would love to have a harpist. What about seeing if ritzy stores or nice restaurants would hire you to play for a few hours? You might contact your local music stores and see if you could advertise there. In addition, make sure you’re advertising on Craigslist if you aren’t already.

        Have you considered teaching harp lessons? Perhaps a local music store would allow you to teach through them or advertise through them.

        • RachaelP says:

          @Crystal, Yes, Christmas is usually a time when I do pick up extra ‘gigs’, and I’m sure they’ll come around this year too. I sent out a flyer last year to several businesses around town offering to play for their Christmas parties but didn’t get a response from that. Last year, I came in contact with a talent agent and they kept me busy at Christmas, thank goodness!!

          That is a great idea about Craigslist. I’ll have to try it.

          Yes, I used to teach private harp lessons and have just become so wary of it in the end. I have had lots of problems with the parents of students…keeping their lesson times, paying for lessons/harp rentals, and basic common courtesy. Maybe someday I’ll get the gumption up to do it again.

  • Nancy says:

    Crystal, I admire you and your husband. You were raised well and started out on the right path early in life which is critical to the success of living without debt. My husband and I have been married over 20 years. We’ve been through a lot, lean times in the early years, didn’t own our first home until 7 years into our marriage. We’ve always stayed out of debt but to be honest I don’t think we could have done it without the grace period of paying on credit.

    I’m a huge fan of Dave Ramsey but I think his thinking underestimates people and their ability to budget and save. We’ve used the buy now and pay later to get us through many a time. And, even now with my husband making 6 figures, we have four children, currently one in college, one in private school. We’ve never experienced a period where some emergency didn’t swallow up any hope of saving for an emergency fund. Our special needs daughter is needing thousands in therapy, my son who plays baseball competitively recently had shoulder surgery which cost thousands of dollars even with insurance, and all the years of traveling with baseball has always come at a large cost. I don’t know how we could do it without being able to pay with credit. We budget, we know just what we have each month to spend making sure we always cover our credit card. I will say that we only pay with credit for unexpected large costs – like surgeries or car repairs or plumbing problems or therapy for my daughter. It takes the same discipline he teaches to do this but I know that there are many in our society that just don’t have this type of discipline.

    Like I said, I love Dave Ramsey, we have no payments except our house but am I the only one that cannot get that emergency fund funded??

    Crystal, you are a great role model for the younger generation and I hope that many many couples just starting out will be inspired to live like you do!

    • anonymous says:

      @Nancy, No, you aren’t the only one. We have six children and it seems like every time I think we will have some extra money to put into a savings account, something else comes up.

  • Stephanie says:

    Thank you for this article!! It is encouraging to hear ocassionally that we are not crazy for renting. We have rented our 7 yrs of marriage so far, and really like the peace of mind we have. We have 4 children close enough in age that each year one child will enter school for the next 4 yrs! We either plan on homeschooling or sending them to a christian school, so renting allows us to allot the appropriate amounts to those needs. We are currently working on paying off the cc debt we have and renting keeps a lot of unexpected expenses from creeping in! And yes, one day we would LOVE to own our own home! lol Anyway, thank you for the encouraging article!

  • shelly says:

    I wish that young couples wouldn’t give renting such a bad rap. If you find something that is reasonable, it ends up costing you the same as just the “extras” on a home would. (homeowner’s insurance, property taxes, maintenance, upkeep, etc).
    The best advice given to us when were were young, was to take the amount that the mortgage calculator came up with as our monthly payment and double it. Low and behold, our financial planner was exactly right. Our mortgage may be only $865 a month, but after everything else you have to pay for that goes into maintaining a home, it ends up being around $1,600 a month!

  • Heidi says:

    Perhaps you didn’t know that an ad for American Express is currently on your website. Just thought I’d let you know in case you didn’t want it there : ).

    • Crystal Paine says:

      @Heidi, No, it certainly shouldn’t be there and I’ve not seen it on my end nor heard from anyone else who has seem it. If you see it again, send me the URL and I’ll make sure it’s blocked.

      Thanks so much!

  • Carrie says:

    We rent and have rented the entirety of our 9 year marriage. We’ve thought about buying several times but aren’t sure that this is where we want to be forever. Our rent is super cheap, the house is great and the location is spectacular. If we bought the place, our mortgage alone would easily be double what we pay for rent. It just doesn’t make sense for us. Our income is unstable to boot… my husband is plugging away at his teaching degree, we’re paying down (bad) debt, etc. My brother and sister in law just bought a house and are struggling to afford the upgrades it needs. Before we buy, I want to get to a place where I can afford a house PLUS what it needs to make it my own. So right now I could be paying twice the cost and have a house I couldn’t really make my own because I couldn’t afford it or I could just keep saving and paying off debt to buy our ‘dream house’ with low cost renting. To me, it just makes sense to rent.

  • Debi says:

    Audrey, I just wanted to say hang in there!! HUGS!!My hubby and I were in your shoes and never thought we would get out, most all of our income went to housing. It sounds like you are doing the right thing, and I am inspired that you don’t have debt….that is AMAZING!! Eventually after submitting hundreds of resumes and following up with phone calls, my hubby was able to get a better paying job. Honestly, I owe it to prayer…and lots and lots of it! I will pray for your family. Btw…have you ever done any mystery shopping? I work for trendsource and marketforce, both are legitimate companies. It’s not a large income, but it helps us with groceries and an occasional splurge. Also, have you considered garage sales, craft shows, teaching piano, voice or a foreign language or perhaps babysitting? These are things you should be able to do from home or at least with your kids. God Bless You!!

    • Audrey says:

      @Debi, I have considered mystery shopping, but I’m really bad at judging what companies are legit. I’ll keep trendsource and marketforce in mind! Could you post a link, maybe?
      I actually LOVE garage sales, and would do it more if we had the money! My mom does a lot of garage sales, so I always give her a list of things to watch for and she buys them for me. I’m not creative in any way (seriously, it’s shocking how much creativity I don’t have! lol!), and I don’t have anything I could teach others (nor do I have contacts here… we still haven’t even found a church). I have considered babysitting, but to be honest, I haven’t decided if it would be worth it. This might sound bad, but I am NOT a kid person. At ALL. I love my own kids, but other peoples’ kids make me uncomfortable! I don’t babysit because it stresses me out. My sister has suggested I start an in-home day care, but I honestly wonder if it would actually be worth it given how much kids stress me out. I’ve been on the fence about it for a while, but I haven’t decided because the thought of babysitting (not that I actually have any contacts, LOL) makes me sick to my stomach. I’m not trying to sound like a bad person or anything, I’m just really not a kid person. Would it be worth it though? How much money do people even make babysitting? Maybe if the price is right, I might be willing to try to force myself to become a kid person, haha!

      • Debi says:

        Audrey here are the links for Trendsource and Marketforce
        http://www.trendsource.com/
        http://www.marketforce.com/
        I hear you on the babysitting, it doesn’t work for me either. In home daycare can be worth it, but you really do have to consider your sanity, I did it for awhile for 1 child and when his mother didn’t need me anymore, I was very relieved. When I mentioned garage sales, I was thinking maybe you could have one, we just had one last week at our house and did very well. I have also sold items on craigslist which is free to list items. Crystal has also mentioned online surveys and mypoints that you earn points just for opening emails. Since you read this fabulous blog, I’m sure you sign up for all the freebies and coupons which really does help stretch the pennies. Doing lots and lots of little things really does add up. I could probably go on and on with a ton of little things that we do at our house to save money, but you might be doing those already.
        Sorry…this was kind of a long reply!!

        • Audrey says:

          @Debi, Yeah, I do mypoints and inboxdollars already, along with Swagbucks.
          Not sure about the garage sale though… we’re kind of minimalists, so we don’t really have anything to get rid of. In fact, the apartment we live in now (which we’ve only lived in for a month) has the first garage either of us have had in our adult lives! So we haven’t really had a place to accumulate enough stuff to have a garage sale. lol.

          Thanks so much for the links, I will check them out!

  • Tammy L says:

    I liked your article, Crystal! I agree, it’s not a one-size-fits-all case. 🙂

    As you know, we’ve rented for 8+ years. I think if we had bought a house pre-2000 and sold it in, say 2005, we would have come out “ahead”. 😉 SO many people doubled or tripled their investments that way! But if we had bought in 2005, we wouldn’t be coming out ahead… more likely losing at a faster rate than renting. But, these people seem to buy houses as investments rather than buying a home that they actually want to live in and own (i.e. paid off) for a long time.

    Since we’re currently living in a large(r) city (Seattle area) and housing is very disproportionate to my husband’s salary, we’re still renting and choosing to be content with ENOUGH and trying not to worry too much about getting “ahead” right now when it comes to housing… we save as we are able… Who knows the future? 🙂

  • Rochele says:

    I use credit cards and I am a little confused as to why you think they are so evil? Credit cards don’t get you into a financial mess, lack of self control, worldliness, and coveting others possessions does. Can’t just clean the outside of the dish to make it clean, nothing wrong with credit cards, its the heart.

    • Rochele says:

      @Rochele, I really want to sound nice here lol! I love you and your blog, you have helped me tremedously….so yeah, just don’t know why credit cards are bad. Maybe I shouldn’t of commented….

    • Crystal says:

      @Rochele, See my comments above to other commentors which explains our stance on credit cards. I don’t think they are “evil”, but I do believe that they can be dangerous for many people who don’t have self-discipline. In addition, they can inhibit your ability to achieve financial success.

      As always, that’s just my take. You’re more than welcome to disagree. 🙂

      • Lyn says:

        @Crystal, I feel the same as Crystal does on this issue. Credit card debt has been and is a huge problem for many people who don’t have the discipline to handle them (consumer debt being a part of the problem of this recession). We have no credit card debt presently, even though we live on a smaller income. We pay cash for everything possible or go without. If my husband were to lose his job and we were paying all our bills by credit cards, there is no guarantee we would be able to pay that balance off – it’s a big risk to gamble like that. The credit card companies are not out to help anyone, they are out to make money. We have had cc debt before and it was a long road (years) to pay it off several times. We did it by scrimping, saving, and going without. With living on a smaller and tight budget, it makes a difference for us by not having any debt (of surviving vs. not surviving). I would encourage others to do all they can to get out of debt. It is not easy, but it is very freeing to not be a slave to any credit card company.

  • Courtney says:

    Good article, Crystal!

    We use credit cards and have always been very disciplined and pay them off in full each month. The rewards have been a huge plus. Using our Amex rewards, we were able to get two leather sofas for our living room and bedroom furniture for our kids from Pottery Barn – free! We have gotten several hundred dollars in Land’s End gift cards and made a large donation to Ronald McDonald House, all by using our rewards. We also have an Amazon Visa and get Amazon gift cards as rewards almost every month.

    Credit cards have been of great benefit to us – but as others have already pointed out, you need to be a very responsible person and use them wisely!

  • When thinking of maintenance that comes with home ownership, we also need consider the time involved. Even if you have money budgeted for repairs, you still have all the headaches of getting estimates, hiring the repair man, and making sure things get fixed before problems get worse. Right now with two little ones and my husband traveling often we are better off to rent just so that I can make one call to the landlord about repairs and be done with it. Plus hubby doesn’t have to cut the grass! 🙂

  • Brantley says:

    With the percentage rate at what it is, it’s cheaper to buy then rent. Is cheaper always better though? Not always. Before you buy, make sure you know the following:
    1) Do you plan on being there 4-5 years or more?
    2) Do you plan on staying at your job?
    3) Does your company plan on you staying at your job?
    4) Is it cheaper to rent or own?
    5) Is it within your budget? (crown financial has great budget guides)

    The Bible warns about debt because of the outcome of defaulting on it. You’ll lose everything. Then again, even if you’re renting, you still lose your home if you don’t pay so the outcome is the same. Buying is an investment like your 401k, stocks, etc. Hopefully you invested wisely if you bought. If you answered yes to the first 3 questions above then it could very well be.

    Question 4 can be answered this way.
    Find a mortgage calculator and put in price of house. That should give you how much you pay. The principle is yours… you get that back when you sell. Compare the cost of renting each month with the interest paid to bank only each month. Often owning is cheaper but not always. Then consider that interest is tax deductible so you get even more money back.

    • Crystal says:

      I also think it’s important to do a long-term analysis. Where will you be financially in 10 years from now if you rent and save as opposed to where you will be in ten years from now if you buy a home and pay the mortgage payments? Of course, circumstances can change a great deal over the ten years, but this will give you a great starting point.

      When we mapped this out on paper it clarified things for us a great deal as to which was the savvier option long-term.

  • Trixie says:

    I’m in favor of renting. My husband and I never want to be landlords though!! I rented for my first 8 years on my own and then bought a house with a good down payment.

    Here is another very good reason why more people should rent:

    Maintenance and repairs! My husband owns a home repair business and many of his customers are people that cannot affort to keep their house fixed up properly. It just sits there and continues to deteriorate all because they cannot afford to fix things — and then, before they know it, their house is in such bad shape, it needs a major remodel. Do NOT let yourself get into this situation, these are some very stressed out people, that have to deal with living in a home like this.

  • Brantley says:

    Why so down on credit cards?
    1) There is a fee for using credit cards that store pays but it also brings business in. That’s the same as grocery stores offering loss leaders and you have no problem planning your budget around those.
    2) It’s the future. Paper money will eventually go away (Revelations) and that’s something we’re going to have to accept. You can use a pin as apposed to Visa or AMEX but that also has a fee associated. It’s just smaller because it’s less popular.
    3) You get free stuff – CC points for airline miles and other prizes
    4) There is no fee as long as you pay off full balance at the end of the month.
    5) It’s more secure then cash. If someone steals your card or number, you get it all back and much faster then if you used a check.

    Aside from the temptation to spend more then I make (which isn’t a temptation for me), I can’t see any reason not to use a credit card.

    • Crystal says:

      I’m not a proponent of credit cards because of the havoc I’ve seen them wreak in families lives disabling them from being able to give, save or even pay for their basic needs because they were so deep in credit card debt. Unless you are extremely self-disciplined, they can encourage you to spend money you don’t have on things you can’t afford.

      Why set yourself up for temptation? Pay cash and you don’t ever have to worry about overextending yourself or creditors calling you. 🙂

  • Jennifer says:

    As former renters, current homeowners, and soon-to-be renters again (long story), I am not looking forward to renting again. I don’t like having to rely upon a landlord to fix everything. Every landlord I’ve ever had has taken their sweet time taking care of things.

    In my first apartment, the landlord refused to do anything about my neighbors blasting their stereo or letting their cats run around loose. There was a really tall shrub in front of my patio that I was afraid someone could hide behind and jump me very easily (I was young and single at the time).

    In my second rental, a townhome, the landlord refused to fix the hot water tank and it exploded all over at 11 PM. They wouldn’t fix the oven and I got horrific food poisoning which landed me in the hospital and meant lost work time. And they wouldn’t do some PM on the heater and it went out in the middle of winter…in MI. Not fun stuff.

    The landlords of my third apartment refused to do anything about our noisy neighbor who threatened me with bodily harm (he was a Marine, BTW, and probably could’ve done something!) when I told him to turn his stereo down. None of these places were slums by any stretch of the imagination, some of them were the nicest places in town.

    My FIL, who is a renter, is handicapped, has COPD, and is a veteran, had his landlord refuse to fix his AC (in AZ…in July) and he had to move into a hotel for 2 weeks. His landlord didn’t fix anything until one of the news channel’s problem solvers called him and told him he was going to be on TV unless he fixed it.

    At least when I own my own home I have control over everything-who comes into my house, whether or not things get fixed, doing PM on things before they break down, keeping the landscaping how I want it, having some color on the walls… With all the rental nightmares I’ve gone through, I’m surprised to see so many positive comments posted here!

    • Crystal says:

      One thing I think is vitally important when looking into rentals is to make who your landlords are a big priority. They can either make or break your renting experience. We’ve had wonderful landlords and pretty downright terrible landlords and we’ve learned it makes a world of difference if you do a lot of research ahead of time.

      I hope you end up with great landlords this time around!

      • @Crystal, Could you explain more about how you researched the landlords? In my experiences renting, there wasn’t a way to find out who they were. And many hire a property manager, and that is the one you have to contact if you need maintenance. I’m a homeowner, but curious about this. Thanks!

        • Cherie says:

          @Milk Donor Mama, I’m a landlord (we own and rent out three houses, a duplex, and a five-plex) and we’re grateful for the good tenants we have. We rely on them to keep our property clean, tell us about maintenance issues, etc., but it is definitely a two-way street and a few bad landlords give us a bad rep. Being a good landlord is MUCH harder than being a good tenant. I have a lot more at risk than the tenant does. In my area I can only get one month’s rent as a deposit and a tenant can easily do far more damage than that. My husband and I have heard so many sob stories (many of which turned out to be lies) and got burned often in this business before we set strict guidelines that we no longer stray from.
          As far as checking out your landlord, you can enter the prospective address into your county assessor’s website to find out who the owner is. Ideally, the owner should be the same person (or couple or company name) as the person you’ve been dealing with. An owner has more at stake than someone who’s just a property manager.

  • Lynette says:

    Here’s an interesting catch-22. We couldn’t really afford to buy the house we were living in, but neither could we afford to rent. The monthly payment was about the same or even a little less than what we would have needed to rent (we had four kids at the time). We were spending 66% of my hubby’s takehome pay on housing–mortgage, repairs, etc. God provided and saw us through that time–debt-free. I’m glad we sacrificed and made it work–when we sold after 3 years we saw some of that money back–had we been renting it would have been gone.

  • Helene says:

    I stopped using my gas credit card a couple years ago when gas was at its highest price. I thought I’d never drive again as I couldn’t afford gas. Somehow though I always managed to pay for a tankful in cash and haven’t used it since.
    For me here in the Chicago-area, renting a 2 bedroom apartment would be the same as my mortgage payment for my 3 bedroom house. The cheaper areas are not safe nor are the apartment aeas in my better town.

  • Christina says:

    I agree that sometimes renting is the best choice. For the first three years of our marriage we lived in Northern California where housing prices in a good neighborhood were 700K+ and that’s with a long commute. We were blessed to have good jobs with good salaries but the thought of taking out that huge of a mortgage was daunting. Rent was also expensive, but not nearly as much as our mortgage would have been. Even though there were times when I was going crazy in our one bedroom apartment I’m glad we put up with it because we were able to save a rather substantial amount of money and recently moved to Oregon for a new job for my husband, where we were able to purchase our first home. Had we bought in California we would have been strapped with a huge mortgage in a bad market and would not have been able to take advantage of the job opportunity when it came up.

  • Jennifer says:

    We recently sold our house that my husband bought before we were married. We were there over 8 years and are now renting.
    In hindsight, I wish we had rented those years, rather than had the mortgage.
    God blessed us with a buyer before it was “market ready”, thus eliminating the need for a realtor (private sale!) and the other odds/ends that go with selling.
    I’m loving that I have a lot less house to clean (from 5 bed, 2 full bath to a small 3 bed 1 bath townhome), cheaper utilities and a more friendly neighborhood!

  • Ann says:

    My sister who has lived abroad for many years could not rent a car or book a hotel room when she came home this past summer. She had no credit card. She told me that b/c she had no credit card, she could not enroll in classes offered online. There is nothing wrong with owning and using a credit card judiciously. How do you pay for airline tickets without being redflagged by Homeland Security? Or book hotel reservations or car rentals without one? Eventually you have to travel on an important business trip or to a wedding and someone will have to pull out a credit card.

    • Crystal says:

      We use a debit card for renting cars and booking flights and hotels; it’s never been an issue.

      • Wendy says:

        @Crystal, There’s another issue, though – more and more employers are doing a credit check before hiring new employees. If you don’t carry any debt (good or bad), you will not show up in the system and you can be passed over for a job! In addition, if/when you DO need to borrow money for a mortgage or an emergency you haven’t saved enough for, you end up paying extra if you don’t have a good credit score.

        Between this and the 1-5% I get back on my credit cards (we charge just about everything and pay them off in full each month, for budget tracking purposes), I think it’s worth the few thousand dollars a year to me to withstand temptation!

  • Laura says:

    We love our only credit card – American Express. We use it for everything we can including groceries and rack up Hilton Honors points earning about a dozen free hotel nights each year. You’re right, you have to be extremely disciplined, but the nights (we sure use them too) add up to around $1500 in savings each year – that’s fantastic for us!

    • A.S. says:

      @Laura, This is our favorite card too! We pay off in full every month, and the points gave my husband and I 7 free nights at a Hilton in Paris for our honeymoon. If used wisely, CC are the way to go – while debit cards offer rewards, those offered by CC, in my opinion, give the user more back.

      • Rachel says:

        @A.S., We also use an American Express card for almost all of our purchases. I monitor what we spend through mint.com and make sure we stick to our budget. Instead of a cash envelope, we have a virtual one. Then we pay off the balance in full each month.

        On top of staying within our budget, we then get cash back every year and add this to our vacation “envelope” to visit family.

  • WilliamB says:

    I think that homeownership is overrated. It’s presented as the be-all and end-all in the US, whereas I consider it to be a good idea in some situations and a bad idea in others. Brantley posted a good list, also throw in how stable is your employer and how is the job market in your area in case you do lose your job.

    @Brantley: you’re not quite right that the effect of skipping out on your landlord is the same as skipping out on your bank. The former is a big hit on your credit record, the latter is bankruptcy – not the same thing at all.

    WilliamB, who’s never had trouble using credit cards wisely but who recognizes this isn’t true for everyone.

  • We rent and I hate the bad rap it gets. We do it because it is the best financial decision for us right now in this season of our life and honestly we live “better off” than most people I know our age that rushed to buy houses. Several of our friends are always on the verge of losing their houses because they got in way over their heads.

    In regards to credit cards. I’ll raise my hand and take one for the team…we are not disciplined enough to have credit cards. To live within our means, only money we actually earn can be at our disposal. We like to save money! But we also enjoy spending it. Spending our hard earned dollars hurts a lot more than spending a plastic card.

    Just yesterday my 20 month old saw my husband’s debit card laying on the table and said “money!”. We try to use cash most of the time, but I think we need to do it more. I don’t want my kids thinking we just swipe the magic plastic card and we get what we want. I think using cash is a GREAT way to teach your kids about the value of actual paper money.

    • @Heather@Family Friendly Frugality, I totally agree about teaching the kids. I don’t have kids myself, but I remember vividly (being the oldest child) how one of my younger siblings thought you could just write on the paper (checks) to “make” money, or use the card at a machine to just get more. lol. He made these revelations about his understanding of money while asking for a new toy and being told we couldn’t afford it. “Just write a check to get more then!” he exclaimed. Try explaining cred it and checks to a 3 year old. hah.

  • Elizabeth says:

    I’m going to chime in here as another voice for the judicious use of credit cards, and, despite your chagrin, Crystal, especially for American Express. From a customer standpoint, AmEx is a great tool in purchasing- provided, like all tools, you use it correctly. Amex just wrote me a check for over $500 for repairs to my dishwasher when Sears wouldn’t cover them because Amex doubles manufacturer’s warranties up to an additional year. Their customer service is fantastic, and I get 1.5% cash back for charging things like auto insurance, life insurance, and utilities that I have to buy anyway. I totally “get” that people spend less when they use cash, but, especially for major purchases, spending cash comes with its own opportunity costs. Nothing wrong with that, but they have to be acknowledged, and in my case, this year, Amex alone has saved me about $1500. Would I have spent a little less if I hadn’t had credit cards? Probably. But looking at my bills over the year (with the help of mint.com), no where in the neighborhood of $1500.

    Of course, there are a lot of people who abuse credit, but, to me, avoiding and encouraging others to avoid credit cards because there are those who abuse them is like saying we shouldn’t drive cars because some people drive drunk. Or that no one should drink alcohol because some people have an addiction problem. If people, knowing that they may be denied jobs because of a lack of credit rating, or may not be able to get credit in a situation where it is truly, direly necessary, choose to live “off the grid,” that is, of course, their right and should be respected. But, Crystal, please don’t feel like you have to apologize for participating in a conversation that has affiliations with an industry of which you don’t approve– if we all just kept to the little groups of people with whom we fully agreed, then there wouldn’t be much dialogue in the world. I think your repeated protestations of how you never would have agreed to write some articles if you knew that the site you were writing for was sponsored by big, bad, American Express makes it sound like you are condemning American Express as somehow evil or at least distasteful, and, then, by association, the many of your readers who are loyal customers of them. You must feel, by now, that you wish the whole thing had never come up! 🙂

    • Crystal says:

      I think it’s really important for me to explain the situation. If I don’t encourage the use of credit cards on my blog (which I don’t), then it’d be hypocritical for me to take money from them in ad revenue or be hired by a major credit card company to write for them. And when I posted my initial article on Currency.com, I received an email from a very upset longtime reader who assumed this is exactly what happened. So I felt an explanation was in order since it wasn’t what it seemed.

      It’s just like if I were to have a blog on healthful eating where I had said that I felt it was unwise to buy fast food. But then, I accepted advertising from major fast food chains on my blog. To me, that’s contradictory. If you believe something is unwise, you need to stand by it 100% — even if it means losing revenue. I need to not just talk the talk, but also walk the walk. Otherwise, I’m a fraud.

  • Beth says:

    On the renting, it can be wise and it can be a major money-loss! I truly wish we could buy a house! In our area the rent is going MUCH more than what the payments would be to buy a house. With it being a college town rent is way overpriced!!!

    I also have to say, though I respect your position on credit cards, not everyone that uses them is recklessly spending. Everything we buy is placed on one but it is paid off each month. It’s like a check. We’ve been able to get some very nice furniture through our rewards! 🙂 By far and large I don’t think it’s the credit cards/companies that should be blamed, it’s those people’s reckless spending. Also, sometimes I feel looked down upon on this blog because I do have student loan debt. While I am truly am excited that you all were able to avoid that, I was in a situation that avoiding debt was impossible without not attending school. I worked three jobs throughout college and still came up short. I totally understand your position on wanting others to avoid debt, but sometimes there is no other route.

    • Crystal says:

      I completely agree that not everyone is using credit cards for reckless spending. As I said in the comments above, I believe there is a small percentage of people who can use credit cards responsibly (many who read this blog!). But I’d wager to say that the vast majority of people are “swiping without thinking”. I think the first step to financial success comes in knowing where your money is going, and if you’re just swiping and not taking account of your money, you’ll likely never get a handle on it.

      I’m so sorry you’ve felt looked down upon! That’s certainly not ever my intent and I ask that you please forgive me if you feel I’ve come across in a manner which has been hurtful. I completely understand that people are in different situations and have different backgrounds. We were blessed to have a great financial upbringing and foundation and I know that few people have that nowadays. My goal here is to — hopefully — inspire people to dream big dreams, think outside the box and be radical in their finances. That’s going to look differently for different people, but I hope that by sharing our story and showing that there are alternatives to hundreds of thousands of dollars worth of college debt, that people will be motivated to think beyond the status quo.

  • Jennifer says:

    I thought I would chime in the credit issue because I, like someone above, also found myself in a situation of being a high risk when I went to apply for a mortgage due to the fact that I had never owned a credit card. Ditto when I went to buy a car! I read the comment by the mortgage lender above, about being able to obtain these loans without credit, but with all due respect, that was simply was not my experience nor that of the previous poster.

    I was brought up to believe that they were evil, and, in exact words, “the hand of the devil”. But once I realized that no bank would do business with me, I wised up. I took out a credit card and began using it and making full payments every month. Little by little, I established credit.

    When I see comments like “good for you for not having credit”, it makes me very sad. I do see a movement of people encouraging others to “live off the grid” as was stated, when it comes to credit, and I think that is a very dangerous road to take.

    While it is true that the easy accessibility of credit in our society has led many undisciplined people to financial ruin, the lack of credit is not a good thing. I have seen on many blogs that there is a great backlash against credit in general due to the irresponsibility of people which has contributed to our country’s economic crisis. But like it or not, we live in a world that demands people establish credit. I think it would be far wiser to educate others how to use credit cards properly than to simply discourage their use altogether.

    I also agree with others that home ownership is overrated and THAT has led many people to financial ruin, but I don’t see the same backlash against homeownership that we see with credit cards for some reason. Even if you pay cash for a house, there are many, many other financial responsibilities that go with home ownership which many purchasers are not educated about before making that purchase.

    • Melodie says:

      @Jennifer, I’m a little hesitant to jump in on the debate here. I really respect Crystal and Jesse for their position on credit cards. It takes a lot of courage and fortitude to be so consistent on this issue.

      On the other hand, I think Jennifer and others here have a point. Some have been more gracious than others in presenting them. Teaching folks how to use the cards wisely is also a worthy financial discussion. Distrusting credit cards exclusively may only lead folks into trouble when they find the pressure is too great to avoid building credit, but have no experience or proper training as to how. I mean, some of us are going to have to get mortgages. Not everyone can wait ten years to pay cash for a car: not even a clunker. And if they did pay cash for a clunker, they would have no cash left to pay for the muffler, brakes, fuel pump, transmission, or anything else that is inevitably going to break in the next couple of months. So, taking out a loan is worthy in some cases. And if we must take out a loan, we must have credit. Period. That’s just the way it is.

      Crystal, with these things in mind, would you ever consider allowing some who use credit cards wisely to offer some tips here now and then? My husband and I use cards as an investment. Literally. We gain money in our savings accounts because we use the cards. And the rewards return is better than any debit card rewards available to us in this area at this time that we are aware of.

      In many cases, credit cards offer benefits that beat the CD investment returns offered at the bank. And it doesn’t lock in our money for an indefinite period of time. Yes there are risks, but stock market and commodity trading/investing has risks too. In fact, the bank itself has risks. We learn how to handle the risks that are handed to us. What’s good about credit cards is that the risk, for the most part, is intrinsically connected to myself . . . not some outside force over which I have no control. We have learned to control our credit card use. And we encourage others, not TO use credit cards, but HOW to use them if they must.

      Just as there is a time that renting is wise, there is a time that building credit and using credit cards is wise.

      We don’t bury our savings. We invest them for a return, casting our bread on the water and finding it again after many days. And some of that investing, is through the use of the credit card.

  • Renee says:

    Thanks for posting an article praising the merits of renting instead of buying. I have been married 22 years and we have purchased two homes (the second of which we live in now and built ourselves) and have rented many others (in various shapes and sizes, including two apartments – one was furnished before we could afford furniture). There were quite a few years when we could have bought a home that we chose to wait. MANY people told us we were “throwing our money away” by renting. I understand what they were saying but I still feel that if it puts a roof over your heads, it is not throwing your money away. The Lord gave us what we needed at the time. How can that be wrong or unwise?
    Thanks again.

  • I would just like to point out one small thing that a lot of folks seem to be missing. Crystal never stated that using credit cards is wrong, or that the people who use them are evil or foolish.

    She did say that using them in a manner that places you in debt (using them when you no you don’t have the money to pay them off) is foolish, and probably 99% of the readership will agree.

    Crystal was giving us, her readers, full disclosure, but letting us know that she was writing for a company that she cannot PERSONALLY endorse. Rather than attack her for not personally endorsing the use of credit cards or credit card companies, we should thank her for being open and honest.

    Whether or not we all agree on the use of credit cards is irrelevant. The author of this blog is simply standing by her beliefs. If we had discovered on our own that her post was being sponsored by a credit card company, Crystal would have been called a hypocrite – so let’s not attack her for being honest. Her intention was total transparency, not condemnation.

  • Christine says:

    Renting is often a wise choice. I’ve come to realize that the ideal of home ownership is one of the American dream, but it’s not necessarily a christian ideal. Owning a home or not is just something that one has to decide on its own merits.

    We previously owned a home and sold it at a profit during the boom. The city we moved to, Chicago, hit the downturn among the first. We didn’t buy there, but if we had, we would have been in quite the pickle. Since we’ve moved back “home,” friends and family have pressured us to buy. That it’s somehow always a smart choice. Instead, we’ve rented and continued to watch the market here tank. Friends are trying to sell a home they bought five years ago and are praying they wont have to bring money to the table at closing. Other friends built their dream home, only to carry two mortgages when the old home wouldn’t sell. They’re now renting it out, but it’s been a burden.

    Don’t get me wrong, someday, when the time is right and we feel that God wants us to spend our money on a home and stay somewhere semi-permanently, we’ll likely buy. And renting has its downfalls (I say, as I prepare to go to small claims court to regain our security deposit from our previous place). But it has it’s plusses to. We have considered overseas mission work, have elected for me to stay home with our young children and are now planning for me to return to work, which requires a move to finish my training, all because we are not tied down.

    Your post where you outlined what you did to save for 100% down on your home was inspiring to me. It helped me realize that I don’t care very much about owning a physical home. I care a great deal about traveling and other experiences. My husband and I agree on this. You sacrificed a lot to make your home purchase, which is commendable. You spent your money on what was important to you and made it happen. It helped me to realize that I want to spend our money on what is important to us and not buy a home because it’s what is “expected” as the next step in life.

    Thank you for helping me see home ownership for what it is – a choice one makes and not a necessity!

    • Lyn says:

      @Christine, Good for you for sticking to what you want in life and not going with everyone else. If I had my choice I would sell my home and live unconventionally as well. Owning a home is not always what it is cracked up to be – lots of maintenance, cleaning, repairs, $$$…etc. A home can be anywhere there is love. It does not have to be a standard home – it can be an apartment, an RV, a yurt, there are many choices in this life. We don’t all have to be cookie-cutter people.

  • Abbie says:

    Just food for thought…

    When my husband and I used a credit card, we wouldn’t put much on it and we would pay it off every month. What we did put on it was in the name of the “rewards” it brought us. A little over budget here, and little over budget there…it adds up. So think about this:
    You have $100 budget for groceries a week. You can buy more because you have a credit card and not restricted to cash. You spend $120 instead. You do that every week.
    $20 x 4 = $80
    $80 x 6 months = $480
    The rewards you get on that $480 at 1.5% cash back is $7.20. When in reality you could stick to a cash budget, save that $480 and buy the new furniture, hotel nights, airplane seats quicker using cash.
    Just a reason why we use cash. Are the rewards REALLY saving you?

    • Lyn says:

      @Abbie, I totally agree. Taking a chance of putting everything on credit cards, and perhaps losing one’s job or being affected negatively by the recession or any possible scenario in life does not make it worth it to me for a few credit card freebies. There will always be more security in paying cash, as well as a sense of pride and being able to sleep well at night. Once you swipe that credit card, you are using that company’s money, not your own. I prefer not to take those kind of gambles in life.

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