I guess I’ll be the first to announce we have debt. We started a business a few years ago, and have financed some of our purchases, so we have a combination of business and personal debt. Our goal is to be credit-card debt-free in two years-- biz and personal. We do also have mortgage and my wife has student loans. Before the business start-up (and a job loss a few years ago), we had no credit card debt. My wife absolutely hates having debt looming, and our current situation is causing much anxiety for her (even though it’s nothing we can’t handle.)
I could go back to work full time in my previous field and have this stuff paid off in six months, but that would mean flushing the work we’ve done on our small business over the past five years down the toilet. We don’t want to do that, so we muddle on. Every spare nickel goes toward debt, however.
I will continue to owe money on my student loan until some time in my 70s. Once a month I open a spreadsheet and paste in the current balance, and I’ve got the cells attached to a graph so I’ve been watching Lake Debt empty out at an observably accelerating pace.
At the time I was in graduate school, I had never received a real income (as in “greater than $4000 gross income in a single year”) and considered myself more or less congenitally unemployable and I’ll confess to having had an attitude of “either this works, and I become a Real Person and can pay it back, or it doesn’t in which case come and get me, baby, you can’t draw blood from a stone, whatcha gonna do, repossess my vintage-1973 rustbucket car that I paid $250 for?”. I had not stopped to consider the excluded middle But I lucked out, I found a skill that folks are willing to pay me for (not remotely related to what I went to school for) in sufficient quantities that I started making my designated payments in 2002. 'Twould be nice if the government were to offer some amount of student-loan debt forgiveness but a deal is a deal. Hell, maybe after I retire and get this debt paid off I’ll reborrow and go back to grad school and take on a payment schedule on which they’ll get the last of it back from me when I’m 157 or so.
Wife and I are debt free. DINK’s, both have decent paying jobs. We live extremely modestly. Paid off our very small house last year. Only own one car that sits a lot (I commute to work by bicycle and my wife walks). Our retirement and savings are going up extremely fast because we live off 20% of our income. We’ll be able to buy our retirement home outright in a couple years without even selling our current house. We are also able to donate much larger amounts and more often.
I grew up extremely poor - basically until I was 30. Always worried about money. Always being behind on rent, not able to afford gas, dreading the phone ringing because you knew they were calling about debt, etc. It’s so odd to be completely opposite now. I still have my old habits: I keep track of every penny in my money tracking software nearly every day.
Definitely on both. In general if you just read the internet, and especially further self selecting to investing forums, you’d think US consumers have very little debt, often a just a mortgage or car loan, but often not even that! And along a given career path it’s easier to be debt free later on, as in paying off a mortgage because you got it 15 or 30 yrs ago, which for younger people obviously isn’t the case.
We have no personal debt. There are loans on investment properties but with limited recourse to me personally. In general borrowing to invest is worth considering, though not absolutely necessary either. And education, own home mortgage or even to some degree car loans* might fit in that category of investment.
The typical problem with the biggest debt category, mortgages, isn’t that people should not have them, few can avoid them unless they simply rent which is in substance partly equivalent to borrowing. It’s that they convince themselves a bigger house than what they could really get by with is all additional investment, and forget they are consuming the extra owner imputed rent of a bigger place. That doesn’t enter in with a pure investment property. Similarly the problem with education loans is if intended to be investments but don’t turn out as good ones for the money.
But there’s no cosmic law against borrowing simply to consume more now, as many people obviously do if you look at macro stats, though it tends not to be older people given the opportunity to tell everyone they’re debt free. I’m just one of those who by ‘parental osmosis’ acquired a natural aversion to consumer debt early on.
*a basic car needed get to work and you want the warranty and no unknowns who messed up the car before you. I was kind of a car guy back when, briefly, I had to drive to work sometimes on out of office assignments so a ‘clunker for cash’ was fine. For the great majority of adult life I haven’t absolutely needed a car and have never borrowed to buy one.
I’ll raise my hand on being in debt. We’ve had some head winds but we’re making steady progress.
Headwinds:
-husband went to graduate school late, so we were one income and paying for his school
-son is disabled, and we pay for most of his costs out of pocket
Progress:
-We have paid off one car and the other car will be paid off shortly
-We have paid off my student loans (for my graduate school)
-His credit cards are paid off
-My credit cards are almost paid off
If we stay on track, in about a year we will be down to the mortgage. We are thinking about getting a second property as a rental.
I’ve been debt free for ten years now (currently in my late 40s).
Paid off the mortgage early, been lucky to have reliable cars that last. Live pretty frugally, although I’m not “cheap”. This is to say I’m happy to spend money on something worthwhile, but I’m also good at saving and not spending needlessly.
No cable, just internet. No air conditioning, and I do various energy saving hacks around the house. But the big one that has allowed me to achieve this: no spouse or kids. Families are crazy expensive.
The problem? I find my ambition waning. I don’t need to make a lot of money, and as I get older I find myself less and less willing to endure stress for salary. Starting to think about giving up on my current career and finding a part time job that I don’t care about at all.
No, not debt free. Have a moderate house mortgage, a couple thousand dollar home improvement loan, and $1000 on a credit card. More than I’d like but not oppressive.
Just the usual mortgage debt (which we could pay off, but with the interest rates as low as they were for the mortgage, I’ve been making out much better just funneling it into the market.) Plus we also have a mortgage completely paid off on another property (where the interest rate was near 7%, because that property was bought back in 2007. That one we decided to pay off quickly, because, hey, instant 7% return on our money, more or less.) Oh, and I think I owe a bit on the car too, but, even more than the mortgage, it was pretty much “free money” interest-wise, so I have no interest in paying that off quickly–rather funnel that money into investments and cash on hand. Debt doesn’t have to be a four-letter word.
Mortgage and my rig … plus I keep a small balance on a couple of CC’s, very high credit limits and continuous for about 25 years …
Although being debt-free may be considered the ultimate in financial responsibility … it’s not very impressive to credit issuing agencies … they make money on the interest charges so they’re only interested in folks who pay interest on time and in full … so I’m “gaming the system” by keeping a couple hundred dollar balance and making minimum payments every month … if we pulled up my credit report, it would show several full 84-month payment histories which makes me a particularly good credit risk, especially since these past 7 years have been tough economically …
Sometimes I need to lay hands on $50,000 in a hurry … because at 150 to 1, the LA Rams winning the Super Bowl will pay $7.5 million …
We’ve had a number of threads about the credit agencies, and my feelings can be summed up by saying, “Fuck them in the neck”. I’ll consider changing that to a more traditional orifice when they begin acknowledging good fiscal behavior, not just what benefits them.
Yep. The new car was paid off a couple of months ago and I finished paying for the house 5 or 6 years back. All I have on credit cards is what I haven’t received the latest statements for yet, and I’ll pay them when I do.
No kids, healthy young cats, and nothing to spend my money on beyond regular household expenses except for one or two trips per year. So I’m saving most of it for later.
Except for whatever is on our credit cards we are, and have been for almost 9 years. Our credit cards are automatic withdrawals and we haven’t paid any interest for many years so I wouldn’t count them.
A mortgage that was refinanced to 15 years last summer.
A little less than $4k in student load debt that I will pay off as a lump sum before the end of the year.
That said for most of my 30’s I had been carrying $30k+ of credit car or auto loan debt. That would slowly get paid down and then creep back up. That was all finally paid off last year and credit cards have been paid off monthly since then, along with increasing my savings.
And I’m thinking of downsizing my house and being able to pay that off in a 10-15 year time frame.
That said I would be averse to taking on debt for some purchases. Mainly if low rates for home repairs or improvements or like that 0.9% or 1.9% you sometimes see car dealers offering. Though in both cases it would have to be a low rates for short term (3-5 years max) loans .
I am completely debt free and have excellent credit (over 800 - same with my wife). I think the above is a myth for most people that are debt free. We use our credit card for nearly every purchase and pay it off every month. We have a lot of credit between our cards but very low percent used. We can get $50K in a hurry because we have it on hand in easily liquidated index funds.
We don’t expect we will ever need to use credit again unless it is to open another credit card. We will buy our next house outright. We will buy our next car outright, etc.
Mortgage only. If all goes as planned, sometime within the next 9 months the house will be sold and the profits split, and I will buy something either much smaller or less desirably located (or possibly somewhere not in this area at all), for cash. And then I will be completely out of debt, as I have been all my life except for the mortgage.
No debts except a CC that will be paid automatically from my checking account on the due date, My wife and I average about $3500/month on the CC. The mortgage was paid off in 1991 and I have never had a car loan. When I had two kids in college at the same time, I drove a couple of old clunkers. Before and after, I paid cash for new cars (4 in all) and drove them forever. Even the college loans for the kids were paid off shortly after they graduated. I well recall my father struggling every month over which debts to pay off that month and I shudder at the thought of having to live that way, so I don’t. And my wife fully cooperates (which, I regret to say, my mother didn’t).
But I lucked out, I found a skill that folks are willing to pay me for (not remotely related to what I went to school for) in sufficient quantities that I started making my designated payments in 2002. 'Twould be nice if the government were to offer some amount of student-loan debt forgiveness but a deal is a deal. Hell, maybe after I retire and get this debt paid off I’ll reborrow and go back to grad school and take on a payment schedule on which they’ll get the last of it back from me when I’m 157 or so.
And along a given career path it’s easier to be debt free later on, as in paying off a mortgage because you got it 15 or 30 yrs ago, which for younger people obviously isn’t the case.