I know a couple who are completely debt-free. They’re in their early to mid-thirties and have no mortgage, no car loans and no credit card debt. Pretty impressive.

While they don’t live unnecessarily frugally (no, they didn’t eat noodles and boiled rice for a year) they have made some major decisions that helped them achieve debt-free status.

1. They’re not having kids

Not having kids means major savings! In San Diego, day care runs about $800-$1,200 per month depending on where you live. Thats a $10,000/year per kid saving! Not having to worry about college expenses means you don’t have to save for it either. Thats another $2,000-$5,000/year.

Plus, you don’t have to buy diapers, baby clothes, baby books, those darn expensive Baby Einstein DVDs which probably amounts to another $2,000/year. All added, thats roughly a $15,000-$20,000 savings for the first few years.

Of course, once the kid is old enough to place in school your expenses drop. Until they’re about 7, at which point you’ll be paying through your nose for activities, classes, trips and gadgets. I read an article in the Wall Street Journal about how it costs about $180,000 to have a kid and I didn’t believe it, until my friends started having kids and I started seeing all these crazy expenses.

2. None of their friends are having kids.

They dumped most of their friends who started having kids and started hanging around with like-minded people. This helps saving money since you don’t have to spend money on other people’s kids. I didn’t think this would be a major expense but if you have 6 friends and each of them have 2-3 kids, this can easily add up. Between birthdays and christmas you’re looking at spending several hundred dollars.(One of my friends had 72 people at his wife’s baby shower!) Plus there’s the trips to disney land. Heck, even a trip to the movies costs $25/person with soda and popcorn.

3. They put off saving for retirement.

They decided not to start saving for retirement until they debt-free. While this isn’t a good decision, atleast now they have more money to sock away for retirement.

On the flip side, should you really be debt-free?

Your home mortgage is the cheapest money you’ll ever borrow (provided you don’t get ripped off on your home loan). It also provides you with a tax-break. Of course, paying a dollar in interest to save 35 cents in taxes is pretty stupid, but if you invest the money instead of paying off your mortgage and get more than the 6% your paying, you can arbitrage your way into early retirement!

Plus, starting your retirement later is never a good idea. You’ve lost the compounding effect on your savings and its very difficult to make up for that just by contributing extra.

But thats the way it is and its hard to find fault with their choices. They were willing to sacrifice for their goals and they reached them.

What would you do to be debt-free?

Most people subscribe to several magazines. They’re either discarded or put in a box in the attic or basement, only to be thrown away decades later (unless they’re comics or playboy magazines, in which case they’re hold their value).

But today I found a novel way to get rid of them. You sell them on Ebay! Here’s a link I saw today when looking for a book on horse racing. The seller sold last years Economist magazines for around $16 including shipping. Not a lot of profit, but atleast you’re not filling up a landfill and someone else is enjoying them.

I like to read several magazines, but some of them like National Geographic are not time sensitive. Might be cheaper to buy them off ebay!

Make Your Nut is currently hosting a contest on Personal Finance Haikus. The winner gets $20 and some link love. Anyway here are my entries:

Refinance your home
Use it to pay off your debt
Brokers must eat too.

Open a brokerage account
Invest your earnings
Wall street needs your money.

The US Dollar is dropping
People have lost faith
Buy gold instead.

Starbucks coffee is expensive
Do not drink if you cannot afford.
Buy the stock instead.

According to this report on Bloomberg.com, Gemesis is planning on selling 1 million carats worth of man-made diamonds next year.

The major Diamond mining companies like De Beers, Anglo American and Rio are getting a little nervous. They undoubtedly come out with a marketing campaign to squeech sales of “fake” diamonds. Here’s what John Teeling, founder and chairman of African Diamonds Plc. (a Dublin-based mining company in which De Beers has a stake) says.

If you meet a woman that you are going to spend the rest of your life with and have babies with, are you going to give her a diamond made in a lab in Pittsburgh or are you going to give her the real thing?

Teeling doesn’t seem to be worried about it. But I own shares in Anglo American (AAUK) which owns 45% of De Beers so I am!

Synthetic diamonds cost about 70% less than real ones and you need a machine (which was developed by De Beers at a cost of $17 million) to differentiate between the two.

If your fiance or wife couldn’t tell the difference would you sneak in a synthetic? Maybe justify it by paying the same price but getting a rock the size of your big toe?

MoneyNing has calculated that paying $200/month on gasoline over a 45 year period totals over a million dollars.

Thats pretty depressing. But by the same train of thought, the $400 car payment you spend to drive a new car every 4 years will work out to be another $2 million over your lifetime. Add in another $200 for insurance and maintenance and thats another million, bringing your grand total to $4 million dollars just to get from one place to another!

I’m buying a bicycle tomorrow!

Here’s a very short video on what to do in case of a kitchen fire. I’m filling it under personal finance since it could save your house (and maybe even your life).

One of the questions I dread at interview time is the “So, tell me about yourself” question. I usually never have a clue how to answer this. Although in the past 2 years, I have become a lot better at marketing myself and a lot more perceptive of what employers are actually trying to find out.

But its usually these questions that stump me. I once interviewed at Sony, and one of the programmers asked me “so, why do you want to work here?”. Unfortunately, I was speechless. I think he was trying to break the ice and by stumbling I just made it very awkward and I’m appalled that I couldn’t think of anything nice to say about Sony. All I had to say was “coz Sony rocks!”. Of course, I didn’t get the job and I don’t blame them. I certainly wouldn’t hire anyone who didn’t have anything good to say about my company!

Since that experience, I’ve gotten slightly better at interviewing but I until I read The interview that lasts for an hour over at Career Strategist, I didn’t really have an idea of how to lead an interview or even start one firing on all cylinders.

Its a somewhat long post, but by far the best I’ve ever read on that topic. It covers all the salient points concerning an interview including do’s and don’ts and what questions to ask the interviewer at the end.

Good luck with your next interview!