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

[Pleasenodebt]

I have been debt free for 3 years and counting. My only creditor is myself which I pay $250.00/month into my savings account.

[Hot dog]

Wow Congratulations!! I can't imagine. Is that everything including the house?

[myself]

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.

Steve, have you read any of David Ramsey's stuff.
I just did last night (The Total Money Makover, about 220 pages).
It was somewhat insightful, in that his suggestion was to completely payoff all your debt, including your house, in a certain way. There's a forum that is focused on his philosophy here: Living Like No One Else - There's hope in your financial life!

My wife and I are going to talk it over a little tonight. And we have 12.5 years left on a 15 year mortgage.

[disneysteve]

Steve, have you read any of David Ramsey's stuff.
I just did last night (The Total Money Makover, about 220 pages).
It was somewhat insightful, in that his suggestion was to completely payoff all your debt, including your house, in a certain way.

Yes, I'm familiar with Dave Ramsey's stuff. I don't agree with some of his teachings regarding debt management. They are appropriate for certain people, but for those who are able to use debt as a tool to improve their finances, rather than sink them, his method doesn't make sense.

[LivingAlmostLarge]

I don't agree with Dave Ramsey either. Also do you really think 15% for retirement is enough if you at 38 or 40 years old with $10k saved? You need to look at the larger picture and ramp up retirement savings. You can time your mortgage to end when you retire, but without money to pay for property taxes, insurance, repairs, how will you live?

That 15% might not be enough. It's enough for the 25 year old starting out, but a 40 or 50 something?

Sometimes paying off debt isn't the best idea. Also I don't think that debt free necessarily means financially free. Two different ideas.

[myself]

I don't agree with Dave Ramsey either. Also do you really think 15% for retirement is enough if you at 38 or 40 years old with $10k saved? You need to look at the larger picture and ramp up retirement savings. You can time your mortgage to end when you retire, but without money to pay for property taxes, insurance, repairs, how will you live?

That 15% might not be enough. It's enough for the 25 year old starting out, but a 40 or 50 something?

Sometimes paying off debt isn't the best idea. Also I don't think that debt free necessarily means financially free. Two different ideas.

I'm not saying that it's for everyone either. If debt is used as a tool, I think it can be advantageous (although it appears that Dave Ramsey - or possibly his "followers" don't necessarily think that's the case).
We still borrow on our CCs to invest the money to make more money than we're paying (including after taxes of course).
And I might note that some of the "followers" also go higher than 15% before paying off the mortgage. Some have gone as high as 40% towards retirement before working to finish up the mortgage early.

[LivingAlmostLarge]

Most don't. I know tons because they all only see one goal, debt free. Not financially free.

[Stuartthomas]

yes everyone want's to be debt free..and the best way is to stay out of the credit card debts....and always try to earn some extra cash..

[Personal Finace Fleur]

if you need personal assistance in managing your personal finances, it would be great if you will seek help online.two heads are better than one.

[PMMM]

Most of this thread is 2 years old.

Resurrected from the dead I guess.

(Assuming the dates are correct on the thread.)

[corns]

About 4 years ago, due to my greed, I succumbed to a get rich quick scheme. I borrowed from my credit card about 20k in total and "invested" into the scheme. The scheme soon collapsed and I was saddled with debt. I used whatever little money I had left and gambled, hoping to win money to pay off my debt. In the end I lost everything. My debt at that time was equivalent to about half year my take home pay.

I quickly worked out a plan. The first thing on my plan was to cut away my existing credit cards.

Today, I have repaid all my debt and I am slowly building my networth. I've learned that debt is a double-edged sword. Use it wisely and it can help build your wealth. Abuse it and it will destroyed wealth faster than one can imagine.

[Tonyall]

I simply have never been in debt in my life. At one point, I took out a car loan because I thought I had to build credit (still had money in the bank). I could not stand the feeling of owing money though and paid it off within a year.

We are paying for our home (should be finished within a couple of years), but my wife bought that in her name before we were married so I guess that does not count!

Not paying interest and in fact earning it has saved me a lot over the years.

[whitewater30]

My wife and I will be debt free in March and will save to pay cash for our next home, while saving 15% per year for retirement.