Doesn't Anyone Here Want to Be Debt Free???

[Broken Arrow]

Hmm. I think payday loans are finally banned in my city. I haven't seen one around for a while now.

[simpleyme]

I noticed the other day that the payday loan places in my town are gone ;-0

i do not know that they are all gone but the one next to the shoe store and the one next to the sandwich shop are gone

[mom-from-missouri]

I get the paper from my old hometown and the ones there are gone now too. I didn't realize the same man owned them (3), but it seems he was arrested on federal counts of tax invasion.....
Also, the letters to the editor indicated there is a group trying to make "loan sharking" in the town illegal--so that if anymore come in, they have to follow the citys rules regarding interest rates and service fees. I wonder if that will pass or not...

[Lindahfx]

Okay, I'll fess up... we are not debt free.

We owe over $10k in cc debt - working to pay it off ASAP.
We owe approx. $12K on a car that's on a buyback plan that will come up for renewal next spring.
We owe approx. $25k for my husband's student loans.
We have a mortgage of $240K.

We are not charging anything to cc's that we don't pay back in the same month. And we're trying to pay $500+ every month towards our cc debt. There are lots of things we need/want to buy but everything is basically put on hold until it's absolutely necessary (our computer could die at any time).

We each contribute towards retirement funds through our works although we could certainly be contributing a lot more.

We certainly don't skimp in other ways (groceries, etc.) but we're not out spending money on frivolous items. But I do love to shop... I do a lot more looking than buying.

But I do wish that we didn't have to put out so much $$ every month towards bills and debt that we could be using to invest, etc.

So, I'm a good example of someone on here who isn't debt free and have their financial life in perfect order. But we are working on it. Day by day we work towards that day... it will come.

[disneysteve]

We owe over $10k in cc debt - working to pay it off ASAP.

We are not charging anything to cc's that we don't pay back in the same month.

Is the card you still use the same card on which you carry that balance? If so, do you realize you are paying interest on EVERY purchase you make, even if you pay for that month's charges at the end of the month? If so, get yourself a separate card for new purchases and stop using the one with the balance. You'll save yourself a bunch of money.

[Coleroo]

haven't read the whole thread, but caught the part discussing parents and "relying on inheritance" - and found it interesting...

my dad was the youngest of 5 children - his mom's favorite (we all knew). and i was the "only child" of the "baby". my granny was a tight-wad in sense of the word, except when it came to me and dad...i remember her asking me what i wanted (at age 7) and i giggled and said $100 and she pulled it out and gave it to me immediately. she was known to save half of everything she earned in her life and in 1962 had an untouched savings account with tens of thousands of dollars in it. her home was fully paid for by 1952 (a gift from her dad), she never drove (or owned) a car, and she detested material things (had the same kitchen table for 40 years!). she always "discussed" with my dad the fact that he nor i would never want for anything "someday"..and she told me that as well over the years. my dad never went into detail with her though because to think of his mom dying hurt him so much.. when i was a teen, she took ill and lived with my dad's oldest sister off and on for 2 years, then she died.

when the will was read, there was no mention of me at all, nor any personal names. her house was to be sold and the money devided equally between her 5 children. that was all there was - no savings, no checking accounts - nothing, and according to the will and "if anyone contested, they would be thrown out of the will". My dad and I have no idea what took place and know theres more to the story...somewhere... but we've never said anything to family for fear of causing a feud. we knew her better than anyone - and it hurts us to this day the way things came down. but, what can we do? we know the truth of what she always told and showed us...but end events didnt turn out that way.

so much to be said about "inheritance", right?


with that said, i would rather lie in the street penniless and burdened with milions in debt with my living mom and dad than to be rich yet have them dead. the though of "inheritance" always makes me ill ..

[Lindahfx]

Is the card you still use the same card on which you carry that balance? If so, do you realize you are paying interest on EVERY purchase you make, even if you pay for that month's charges at the end of the month? If so, get yourself a separate card for new purchases and stop using the one with the balance. You'll save yourself a bunch of money.

Steve, No, they are different cards. The card with the $10k+ balance is a 0% interest cc (until March '08) and I've never charged anything to the card other than moving the balances when I first got it this March. The card I use is a different card with a 19% interest rate but it has airmiles points that we are accumulating. And as I said, we aren't carrying a balance so no interest being charged/paid.

[hacik.istanbul@yahoo.ca]

I agree that financial freedom is a wonderful thing but you sometimes have to spend in order to enjoy some a basics in life. If that means really wanting the things that really matter to you, then so be it. Let your conscience be your guide. Hacik Istanbul

[myself]

I have health insurance, and disability insurance.
The kind of work I do I can do anywhere.
I owe less than 25K on the house, and it is worth 455K.
I have money saved for retirement, and will also have a sizeable inheritance if something were to happen to my father.

I find it interesting that many posters on here assume I am broke. They also assume I am male. Interesting.

Not everyone was born with a silver spoon.

And in case you didn't know, health insurance plans and disability insurance plans DO have limitations on coverage (albeit sometimes quite large like my own plans).

Here's a simple question I'd like to pose to you.
If someone offered to loan you $120,000 and you could fairly easily make $30,000 within 1 year, would you do it?

And one more. Is it wrong for me to enjoy that I paid 1.8% in federal taxes last year, even though my tax bracket is very solidly in the 28% bracket?
(truth be told ... our 15 year 5.5% mortgage helped out with this)

[myself]

So, I'm a good example of someone on here who isn't debt free and have their financial life in perfect order. But we are working on it. Day by day we work towards that day... it will come.

Personally, I'd think that if anyone had a net worth above $0, they are not doing too bad.
However, if someone had enough money in investments that paid for all their debts and their investment expenses, they'd could be retired if they chose to.

[Coleroo]

**** raises hand **** i want to be debt free!!!!!!!!!!


I've learned my lesson big time - so has my husband. (im 25, he's 24).

I got my first credit card at 18....and bought my first car, a 20k suzuki in 2004 on credit. I discovered quickly that i hate car payments! my husband and i met in 2005 and got engaged quickly...over the next few months i introduced my formerly cash-only fiance (and then husband in june of 06) to the world of credit (sad sad sad) ---- from march of 2006 to november 2006 we had bought a home, bought a new chevy aveo on a 3 year loan, and had racked up 11k of credit card debt!!!!

Finally, it got the best of us and we both ended up in our living room crying and cutting our credit cards up on Nov. 28, 2006.

We haven't used a credit card since (not even for rewards - its too tempting to overspend)....and in the past year we have brought our credit card debt from 11k down to 3k!!! we've put extra to the cars and have a year left on both my 3 year old suzuki and his 1 year old chevy aveo. after we finish with the cars we'll be putting that "free money" on the house (both car payments equal a house payment!) and our house will be paid off in 10 years. so - if all goes well and we "keep keeping on" we will own our home free and clear before we're both 36 years old.

we also never plan on getting a car loan again...nor use credit. it feels awesome to have a savings account and a big retirement fund like we do now!!!!

[disneysteve]

after we finish with the cars we'll be putting that "free money" on the house (both car payments equal a house payment!) and our house will be paid off in 10 years.

we also never plan on getting a car loan again

What you've accomplished so far is terrific, but may I make one suggestion.

Rather than directing the former car payment money to the house, put at least some of it into an account earmarked for your next cars. Your home loan is probably costing you very little interest after the tax deduction. You can probably match that return by putting the free cash into a high yield account. Then, when it comes time to replace your current vehicle, you'll have the money all ready and won't have to borrow anything for the purchase.

[Coleroo]

What you've accomplished so far is terrific, but may I make one suggestion.

Rather than directing the former car payment money to the house, put at least some of it into an account earmarked for your next cars. Your home loan is probably costing you very little interest after the tax deduction. You can probably match that return by putting the free cash into a high yield account. Then, when it comes time to replace your current vehicle, you'll have the money all ready and won't have to borrow anything for the purchase.

Thanks thats a good point - and i've thought of that in passing - but our home loan is costing 8.99% interest right now as we had to get an unconventional "no-doc loan". plus, even with our interest last year, it wasn't enough to surpass our standard deduction after we itemized so interest was no help last year...and probably wont be this year either (our loan is only for 83k so interest will rarely be over 7-9k per year...standard deduct is i think around 11k now?)... would you suggest still saving a bit for a new car later or trying to knock out as much home loan as we can first? its a dilemma for me as i wonder what will get us more bang for our buck... then theres also the question of refinancing and when the time is right and how much any new closing fees will be..phew...

[disneysteve]

our home loan is costing 8.99% interest right now

even with our interest last year, it wasn't enough to surpass our standard deduction

would you suggest still saving a bit for a new car later or trying to knock out as much home loan as we can first?

In that case, I think you are on the right track. A 9% non-deductible mortgage should be prepaid. Personally, our mortgage is at 5.875% which equates to a real, after-tax rate of about 4.4%, so prepaying in our situation doesn't make any sense.

If you aren't saving for the car, though, keep in mind that you may have to take out a loan for the purchase, but you can always accelerate the payments because by then, you will be mortgage-free or close to it, assuming you keep your current cars for 10 years.

[Coleroo]

In that case, I think you are on the right track. A 9% non-deductible mortgage should be prepaid. Personally, our mortgage is at 5.875% which equates to a real, after-tax rate of about 4.4%, so prepaying in our situation doesn't make any sense.

If you aren't saving for the car, though, keep in mind that you may have to take out a loan for the purchase, but you can always accelerate the payments because by then, you will be mortgage-free or close to it, assuming you keep your current cars for 10 years.

thanks so much!!! we plan on keeping the cars for as long as possible...i love my little SUV and its a nice family car, with nothing wrong. i can definately see us keeping the cars for the next decade. *crosses fingers against bad traffic luck*