Nil
About 27K USD from my study loans; I need to take a bank loan to cover 100% of my fees.
This look peanuts compare to everyone’s else. I’m both sadden and glad at the same time.
No debt. Everythings paid off.
The bad part is that I will have to buy a different house within the next couple years and I want to upgrade so will have to take a loan for the difference.
I owe $4500 (school) on my credit card. I have to charge another ~ $4000 for school next semester, then done. Woohoo!
I also owe $10,500 for car.
And ~ $2000 for motorcycle.
I hope to have the credit card paid off midsummer or early fall. Oh, and I’ll finally be done school. Woohoo!!!
$132k left on the mortgage.
You may be shorting yourself here. The plus side would include the whole value of the house and not just the equity.
~$40,000 in student loans.
If I were to put all the money I have in the bank towards that right now, I’d only have about $38,000 in debt!
This degree was so not worth it.
About $50k in student loans and climbing.
Zero credit card debt and my lovely shiny new car is paid in full. I’ve got no complaints.
Hey, you’re right - our updated net worth is $130,000! WooT!
Sorry if this sounds stupid, but what is the difference between these two?
$70,000 mortgage, which I could pay off but the accountant says there are tax advantages…
No other debt except what’s on the credit card (gas, on-line purchases) that gets paid off every month.
I am so proud of this–it represents a long struggle getting out of credit card debt and much restraint in terms of spending to do so.
$230,000 house loan (year 7 of 34 years)
no car, no credit card or any other loans.
About $55,000 in savings, not including life insurance or pensions because I can’t work that out…
So very basically I think we are about $175,000 in debt which I don’t like, but it’s the house we are planning to live in till we are too old to cope any more, so…
Just a student loan of around £8,000 ($13,000). The loan was from the Scottish Government so I don’t have to pay anything back until I’m earning over £15,000. If/when that happens, I will pay back around 9% of my annual income until it’s cleared…
The grand total owed on our mortgage is about equal to our combined annual salary. 30-year-fixed-rate mortgage at 4.5%, so the payment is not bad at all.
Just bought a new motorcycle last spring. Put $7K down; with payments made since then, I still owe about $9K. our finances are pretty comfortable these days though, so I will accelerate and pay it off completely over the next 12 months.
No other debt to speak of. Bought a car in '02, finished paying it off in '07, plan to keep it until at least 2012 before buying another one. Most day-to-day expenses go on a credit card, which gets paid off completely each month.
Yes there are tax advantages. Lets say you are in the 34% marginal bracket. So you pay a 1 in interest to your bank, and the government lets you have a .34 tax break. You are still $.66 in the hole.
Unless you are investing the money you aren’t using to pay off the house in a manner that makes you more than you pay on interest on the house (subtract the tax benefit) and in a way that makes the risk worth it - you are better off paying off the house.
We did during the past decade - when the S&P500 had a negative return. The money I saved on interest was the best investment I made in the 1990s. Very little returned the 6% mortgage I had.
Debt load is pretty meaningless unless compared to both income & asset base.
$1000 in credit card debt is nothing to somebody clearing 6 figures a year. It’s crushing to somebody on gov’t assistance.
$100K in mortgage debt and zero financial assets is very different from $100K in mortgage debt with $75K in ordinary savings/investments + $75 K in 401k/IRAs.
Me? Non-mortgage debt is ~1% of gross assets, mortgage debt = ~25% of gross assets.
Just refinanced the house for $390k at 4.7%, and about $10k left on my car at 3.9%, so around $400k. Monthly credit card is usually $3500 or so but it always gets paid off in full.
Savings and investments are about the same as the debt load, not counting the value of my house, resulting in a net worth that lets me sleep comfortably at night.
$0 owed, and helping 3 kids make it through college and get started in their careers without incurring any debt either.
We have a mortgage in Japan currently fixed at 3.3% for the next three years, but who knows where it will go from there. We are 7 years into a 34 year loan.
It’s a mortgage with life insurance attatched (I don’t know the English words, sorry, I have only ever done a loan in Japanese, daft, innit?) so if my husband dies, whose name it is in, it will be paid up in full.
Just this year the loan rules changed so that we can now pay back extra off the end of the mortgage any time we like. I started doing a few extra bits each month until we had some major reform work done in the summer (basically a whole new 2nd floor) and the spare cash went on that.
I’d like to get back to doing this but my husband says we’d be better to save the money (at 0.5% interest or less - bleh) because you can’t get it back out of the house if there’s an emergency, and if he dies suddenly we’ll have lost all that money we needn’t have paid.
Now I’m in a quandary. I thought I was doing a good thing. I thought it would cut our mortgage payments when we are old and have a lot less income than now.
What say you, experts??!
as_u_wish, this is nothing against you - you are doing great. But am I missing something here, or is your accountant an idiot?
He recommends that you continue paying interest on your mortgage debt in order to pay less taxes. But the thing is, you’re going to pay more in interest than you will save in taxes…
You can itemize mortgage interest as a tax deduction. You will get back from the government a portion of the interest you paid. But it’s only a portion, so keeping your mortgage is costing you more than it’s costing the government.
Let’s say you paid $5,000 in interest this year, and your tax bracket is 25% (to keep the math manageable). So you can skip paying taxes on 25% of that $5,000, resulting in a $1,250 reduction in taxes you owe this year. But you still paid a net of $3,750 in interest on the loan. If you had paid it off, your tax bill would increase by $1,250, but the amount you spent on interest would have been reduced by $5,000.
I hear that “tax break” argument from laypeople, but to hear it from an accountant is surprising. Am I right or am I missing something?