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  1. #1
    Join Date
    Jul. 31, 2007
    Posts
    15,407

    Default Debt-free: What does that feel like?

    Very few Americans know what it's like to not owe any money on at least something. For those of you who have reached this state, will you tell the rest of us what it's like? Anything profoundly different? Surprising to you?

    I am gunning for being debt free in the next three years and I know (not well) a couple of people who don't owe nobody nuttin. I'm curious.
    The armchair saddler
    Politically Pro-Cat


    2 members found this post helpful.

  2. #2
    Join Date
    Mar. 30, 2007
    Location
    Hollowed out volcano in the South Pacific.
    Posts
    11,459

    Default

    I've never had any debt so I can say it feels good not having to worry about that sort of thing but with the economy the way that it is, being debt-free is pretty meaningless.
    Thus do we growl that our big toes have, at this moment, been thrown up from below!


    1 members found this post helpful.

  3. #3
    Join Date
    Jan. 3, 2008
    Location
    Tennessee
    Posts
    249

    Default

    Being debt free (with an appropriately large emergency fund) means:
    when the horse has a problem, I can pay for it.
    when the car has a problem, I can pay for it.
    when the house has a problem, I can pay for it.
    we were able to retire early and support ourselves with a craft that we love.
    if I save over the winter, I can show as much as I have energy for.

    Note - if we had anything other than our simple lifestyle, we couldn't afford it. We live pretty basically. BUT I can show my horse and not have to worry about paying interest on the cost.


    11 members found this post helpful.

  4. #4
    Join Date
    Aug. 12, 2010
    Location
    Westford, Massachusetts
    Posts
    3,903

    Default

    We've still got about 5 years left on the, relatively small for such an expensive area, mortgage, but that is the only debt. I don't know...both DH and I earn decent money, but we only buy used cars for cash and use credit cards only for convenience and pay them off each month. DH sometimes wonders why the neighbors have nice cars and boats (we live across the street from a lake) and go on big vacations and thinks we're doing something wrong or aren't "successful" enough. I know what most of our neighbors do for a living and they mostly likely earn less than we do...debt is how they get the nice stuff. You can pull up the registry of deeds site and see all the mortgage paperwork...many have taken out equity loans to the point where they are nearly, or actually, underwater. That shuts DH up about feeling like we're falling behind .

    We've always been debt free, other than mortgage, and it basically means ignoring what everyone else is doing, taking pride in living beneath your means and being willing to settle for what you can afford. Honestly, some people will judge you for it, I can't tell you how many people have given me/us the "snooty" routine over the years because we live a pretty plain lifestyle in an expensive area, but the joke is, ultimately, on them.


    14 members found this post helpful.

  5. #5
    Join Date
    Mar. 10, 2007
    Location
    Montana
    Posts
    5,441

    Default

    I'm only very much improved on debt, not totally free of it. compared to before...

    It feels like waking up in the middle of the night and falling back asleep without having a panic attack. It feels like being interested and happy when your phone rings. It feels like wanting to check the mailbox let alone reading the mail. It feels like not looking over your shoulder. It feels like power again. It feels like knowing a secret not everyone else knows.

    I can tell you it feels like peace of mind and ground to stand on.


    14 members found this post helpful.

  6. #6
    Join Date
    Oct. 9, 2012
    Location
    Washington State
    Posts
    506

    Default

    What do you consider to be 'debt free'?
    If you are talking just credit debt/loans then we will be free of them in 4 years. If you are including mortgages then we have 28 more years to go.



  7. #7
    Join Date
    May. 12, 2000
    Location
    NE TN, USA
    Posts
    6,201

    Default

    Independence and peace of mind best sum it up.

    Been that way since my divorce 29 years ago. Remarried 26 years ago. It took and takes rigorous discipline and dedication, but it's worth it many, many times over. A good personal finance magazine is the best investment one can make toward reaching and maintaining one's goal.
    “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
    John Adams


    1 members found this post helpful.

  8. #8
    Join Date
    Feb. 15, 2004
    Location
    Ontario
    Posts
    8,120

    Default

    Well, we are in our 60s and I would be pretty upset to have debts. We don't. House (mind you, not my dream home or dream kitchen!), cars, boat, credit cards... everything is paid and current. We made sure we always saved (even when our mortgage rate was 18% - remember those times??). Both our kids went to college/university and we had saved enough for them to graduate debt free. I still went to visit my parents in France with two kids every other year. We went skiing in the winter. And we never made more than $110K or so at the best of times!
    I keep track of my expenses as well which really helps so you know where your money goes.


    3 members found this post helpful.

  9. #9
    Join Date
    Oct. 11, 2007
    Location
    Andover, MA
    Posts
    5,712

    Default

    My husband and I don't have a mortgage, and this is the number one thing that allows us to enjoy our lives! (well, that and no kids.)

    I do have a car loan, but could pay it off tomorrow if I needed to. I only took it because the interest rate is so low that it makes sense to leave the money where it is, invested, and take a little bit out each month for the car. And if the investments ever looked like they were tanking, I'd pull the money right away and pay off the car loan.
    You have to have experiences to gain experience.

    Proudly owned by Mythic Feronia, 1998 Morgan mare; G-dspeed Trump & Minnie; welcome 2014 Morgan filly MtnTop FlyWithMeJosephine



  10. #10
    Join Date
    Jul. 5, 2007
    Location
    Beside Myself ~ Western NY
    Posts
    7,021

    Default

    No mortgage
    No car payment
    No loans
    CC limited to one month of gas, groceries etc

    You still have to scrimp a bit, plan ahead and budget because being debt free means you only buy what you have money for today. You want a new car? Better have the difference sitting there in "cash".

    But the nice thing is, if you were to come into dire financial straights, your credit cards are wide open ready and waiting, and you don't have to worry about the house or car payment or collectors calling.
    The more perfect our happiness,
    the more nagging and wretched
    do our unsolved problems seem.
    ~ Gordon Grand


    2 members found this post helpful.

  11. #11
    Join Date
    Nov. 21, 2012
    Posts
    13

    Default

    My SO and I are completely debt free. We both made it through college (he PhD, me Master's) without any loans (we both worked and lived frugally) and we own older cars. Every paycheck I put money into my savings account. We have a decent amount of money put aside to put a down payment on a house next year! I'm actually taking on a side job doing taxes so that we can save up more money for our down payment.

    I hate it when people say we are "lucky" to not have debt. Gurl, luck has nothing to do with it! We've worked really hard and been very careful with our finances to get where we are today. We've both been working since we were in High School and not stopped!

    The biggest thing is living within our means and not having fancy stuff to just have stuff. We don't eat out a lot, and don't waste money on frivolous things.


    8 members found this post helpful.

  12. #12
    Join Date
    Jul. 13, 2008
    Posts
    2,841

    Default

    Luck has something to do with it.


    9 members found this post helpful.

  13. #13
    Join Date
    Dec. 18, 2006
    Location
    NY
    Posts
    4,652

    Default

    Quote Originally Posted by vacation1 View Post
    Luck has something to do with it.
    Yes, of course. Many times people are not able to control the circumstances of their lives.

    But I get so tired of hearing family members complain about lack of money (e.g. this week) and then show me their pedicure, new hairstyle (with highlights and low lights), new set of dinner dishes, new iPhone, wanting to discuss whether or not to trade 3 year old Honda in for newer Honda, buying new furniture, new boots... (and I am not making any of this up).

    We have relatively little debt; and aside from the mortgage could pay it all off easily (car loans with low interest, for example). But it's not luck or accidental that we can do this. I don't have new boots; my Honda is 4 years old and I'm not trading it in; I don't spend my money on pedicures; the last piece of furniture I bought was .....wow, I can't even remember.....a new mattress 5 years ago?

    Way too many Americans don't live within their means, even though they COULD if they tried.
    Last edited by S1969; Nov. 22, 2012 at 07:41 AM.


    8 members found this post helpful.

  14. #14
    Join Date
    Aug. 22, 2000
    Location
    CT
    Posts
    2,432

    Default

    I think it is not so much "debt-free" as "living well within your means with a cushion".

    For those of you who are younger, having a mortgage is most common and, as long as it isnt huge, not worth stressing over getting debt-free right away. I think getting to the point where you can pay off CC completely every month, pay your other bills and put something away is a great situation. Personally, I waited until I saved and then bought my car without financing (and at 58 I have only ever owned one new car, and that is a Hyundai!). Except in urgent situations (like when my old car died and I really needed a reliable car right then) I think waiting on the car purchase and then buying within your means is a huge financial stress relief.

    Now at my age, I am getting as debt-free as possible. I have paid off my house and am trying to get the big home repairs taken care of while I am still working.

    I have been stretched to pay debts a few times in my life and it is a horrible feeling trying to figure how much to pay on each bill to try to stay afloat and knowing you are not making progress at getting out of that hole. In my case, finding a new job allowed me to climb out. For some, adjusting their lifestyle and buying habits is required. Amazing how some people can't "deny themselves" designer clothers or the latest electronics when they really cant afford it!

    Avoiding CC debt is the most important part to me. Not only does it save you tons of interest money, having that credit available to you is a lifeline if things go bad and you truely must (not want to) spend more than you currently have.
    Then there is that board bill, but that is non-negotiable! Hey I didnt borrow for my horse expenses



  15. #15
    Join Date
    Jan. 3, 2008
    Location
    Tennessee
    Posts
    249

    Default

    Two thoughts for doubters:

    1 - If you have something you could pay off today, but don't choose to because you keep the money in investments - Would you borrow the money just to buy that something if you didn't have it already?

    and

    2 - Why do you buy something you do not need with money you don't have to impress people you don't care about?

    When being debt free is more important than impressing others, you'll get there. It does feel good to enjoy money you did not have to borrow.


    2 members found this post helpful.

  16. #16
    Join Date
    Sep. 12, 2008
    Location
    Central NY
    Posts
    734

    Default

    I have been debt free my entire adult life.

    The secret is to live simply and only buy what you can afford. When it comes to major purchases, like a home or car, you just have to save first, then pay in cash.
    Yes, I paid cash for my pick up and my home. Granted, I bought the truck "used" and my house is no great shakes, but it CAN be done.

    And if you're a self employed artist as I am, you learn quickly that income can be feast or famine. You simply have to save up for when something happens like the washing machine breaks. I've been hand washing my clothes daily in the kitchen sink until I can purchase a new machine in January. Big deal.

    Quote Originally Posted by SmartAlex View Post
    But the nice thing is, if you were to come into dire financial straights, your credit cards are wide open ready and waiting, and you don't have to worry about the house or car payment or collectors calling.
    Isn't that really what credit is for? An emergency "loan"? I generally charge about $100/month and just pay the bill in full. In 30 years I've never paid a penny interest.

    And I agree with the earlier post at how some people just waste money on unnecessary stuff. I don't have any hand held electronics and don't really care, they add nothing to my lifestyle. I dropped cable last Feb and don't even miss the crappy shows. NEVER had a mani/pedicure or facial-I look just fine.
    I realize simplicity isn't for everyone, but it affords me to spend big bucks on what I really want, like a Corbette saddle or big 50" TV.


    1 members found this post helpful.

  17. #17
    Join Date
    Aug. 30, 2001
    Location
    Tennessee
    Posts
    2,541

    Default

    We have no debt except the mortgage on our farm, and we had a six figure down payment for that. We paid for almost all of the improvements on the farm (5 miles of 4 board fence, three barns, six run-in sheds, etc.) in cash. We are on track to pay our mortgage off very early.

    We work really hard, have not been on a vacation in three years. We don't eat out much. We drive our cars (that we buy used and pay for with cash) into the ground. We bought a new to us vehicle a year ago when my 12 year old Tahoe that was approaching 275,000 miles finally started to give up the ghost. I don't have much in the way of nice clothes, jewelry, etc. Most of our friends have much nicer lifestyles, cars, things, vacations than we do. I have not done any horse showing the last few years although that is as much because I have no time to ride as anything else. When you start living debt free and below your means you realize just how much people have to finance their nice lifestyle.

    However given what we do for a living (running a horse retirement farm) I would not feel comfortable doing it any other way. Farms are expensive money pits even when they are a business. The work, repairs, maintenance and expenses are never ending both for the farm itself and the feed, hay labor and other expenses for the horses in our care. When things go wrong they tend to be $$$$ on a farm. So we knew when we chose to do this for a living that we were going to have to be very smart with our money in order to not lay away every single night worrying about money. My parents also instilled in me that debt was bad, borrowing money to buy a new car was stupid, credit card debt was beyond bad, and to save something from every single paycheck.


    1 members found this post helpful.

  18. #18
    Join Date
    Oct. 21, 1999
    Location
    Rochester, NY
    Posts
    12,424

    Default

    I started putting away money for my retirement with the first paycheck from my first full time job. I've been lucky, and never got laid off, partly because I was in a job that was vastly different from any other job in the company and that no one else had the slightest idea how to do. And, I made sure I did that uncommon job well.

    I don't know if you would call the fact that I never had a mortgage lucky or whether it comes from being from an old-fashioned family where having several generations living in the same house was the norm and our particular life-style. Either way, I certainly never felt deprived because I lived in the same house with my Grandmother and my parents, until they passed away.

    I am reaping the benefits of having lived a simple life now. I retired at 62 and I have enough saved to live comfortably, not extravagantly. But I don't think I'd know how to enjoy pouring money away on relatively useless things, except for the horse, of course. Horses have always been my one extravagance.

    It takes discipline, I'm not going to deny that. It takes being able to find pleasure in the simple things, and understanding that you really don't have to keep up with your neighbors and their expensive toys. The payoff far exceeds the effort, though. Something could go wrong tomorrow, physically or financially, and you could end up in dire straits, but, that's a chance everyone takes. It's called life. But, the odds in your favor are greatly increased. For me, I'm a worrier anyways, and not having the particular worry of debt has probably increased my lifespan by several years.
    Originally Posted by Alagirl
    We just love to shame poor people...when in reality, we are all just peasants.


    4 members found this post helpful.

  19. #19
    Join Date
    Oct. 21, 2003
    Posts
    8,691

    Default

    People lives are very, very different.

    As far as housing, it's never FREE. You may be debt free and not own a home, which means you most likely have to pay rent to someone every month. And a house is never completely owned. Try not paying those property taxes, or not fixing that roof or plumbing.



  20. #20
    Join Date
    May. 12, 2000
    Location
    NE TN, USA
    Posts
    6,201

    Default

    Another excellent source of information is Dave Ramsey: http://www.daveramsey.com/home/

    Many say he is too extreme, but remember that he is the "Alcoholics Anonymous" of debtors. Persons more fiscally responsible and disciplined than his target audience can still benefit from much of his advice.
    “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
    John Adams


    3 members found this post helpful.

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