Living Debt-Free and Staying That Way!

#bankblack

When it comes to money, we live by three principles:  only spend what you can afford to; repay debts as soon as possible; and spend with principle, purpose, and longevity in mind.  What this translates to in our lives is that we rent our apartment, own a used car, and have limited possessions.  Such a lifestyle suits us now, but when we think of the life we envision around the bend—a life without work, debt, or poverty–we wonder how to responsibly manage the money we currently have.

The Good…

The start of our financial fairy tale goes like this.  Woman and Man meet.  Woman and Man become friends.  Man likes Woman.  Woman eventually likes Man.  Man and Woman court and then marry.  Man has no debt.  Woman has undergraduate loan debt.  Man provides for Woman.  Woman works and pays off debts.  Man and Woman never own credit cards, borrow money, or benefit from interest and live debt-freely ever after.  This simple story has given us a lot of peace of mind.  We have been in situations where our income was limited, generous, and absent, but our financial approach of living within our means and not placing our self-worth in our possessions has buoyed us from scarcity, thanks be to God!

The Challenge…

For years, our money management has been relegated to free checking accounts and debit cards.  We avoid savings accounts because ethically, we cannot profit from interest.  We have been members at a large corporate bank for years, but when we realized that this particular banking corporation was a critical player in the mortgage crisis some years ago and confronting the fact that we don’t share the same values as large corporate banks anyway, we considered switching to a credit union or locally owned bank.  In all of the credit unions we encountered, an interest-bearing savings account was required with no option of waiving the interest accrual, so we felt stuck.

The Consequence…

Though living debt-free means we can sleep peacefully at night, there is a natural consequence to not owing anyone money—we have no credit.  I don’t know what our credit score is but from what we hear, it’s really bad.  How bad?  Got turned down for Budget car rental bad!  This is a nuisance for sure, but we find ways around it.  Once, while booking an Asian, budget airline flight, we were unable to make our purchase using a debit card and a friend booked with her credit card on our behalf.  Every now and again, the consequence of not having credit or a credit card makes life mildly inconvenient.  We considered the idea of building our credit just in case the need to buy or rent property in the United States in the future, but the idea of getting a conventional credit card doesn’t appeal to us.

#bankblack

 

Our Solution…

Thankfully, we came across One United—the largest black owned bank in the United States. They are a primarily online, FDIC-backed financial institution, and they issue VISA debit and credit cards.  Most attractively, they have a clear corporate mission and vision to foster investment and support financial responsibility and prosperity in the Black community.  Once we were in-country, we completed our applications and quickly became card-carrying members of One United.  I was able to close my previous bank account but Urbndervish is holding on until we find another way to facilitate international bank transfers which we need to do a few times a year.

As for credit-building,  One United issues secured VISA credit cards, which means you deposit an amount of money that will be your “credit limit” and can use your secured card for any typical credit card purchase.  By repaying the cost of the purchase within the billing cycle, you avoid paying interest and can play the game of moving money to and fro for the sake of generating a credit history that shows the financial acrobatics of borrowing and repaying.  But like a trapeze act, one must be careful not to fall into the trap of overspending, delayed repayment, and the inevitable fine of interest that comes with it.  I don’t think any one bank alone will meet everyone’s financial needs but for now, One United has our vote.  You can easily open account online here if One United’s principles match your own.

Halal, ethical investments

As for investing, we’re looking to Wahed as our guide.  By ensuring that our money is invested in businesses that don’t profit from alcohol, gambling, adult entertainment, etc., we won’t have a religious conflict with how our investment generates revenue, and we can have a portfolio that multiplies our savings.  We’ve bought gold in the past as a means of holding the worth of our savings, but the idea of turning our savings into investments is a risk that we can afford, knowing that we’ve tucked away money enough emergency money in the event of a crisis.

Halal, ethical investing

How do you plan for your financial future?

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One thought on “Living Debt-Free and Staying That Way!

  1. In a world of bloggers who are the least bothered about walking the talk, you have raggamuslims, like a breath of fresh air amongst all the chatter for they certainly walk the talk and inspire more people than they realise.
    Thank you for sharing these with us

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