Are you debt-free? Has it made much difference to you?

beggars_bush

debt free. I've inherited that attitude to debt off my parents who worked very hard to build their house and keep things going in the 70s and 80s

don't usually buy stuff unless we can afford it, and it is really needed
eg, we're talking about splashing out on a new mixer for baking. I asked the wife could she not just keep mixing it the old fashioned way.

and we usually go on 1/2 holidays a year, change the cars when we need to (always 3/4 years old) and enjoy life too.

JeffKenna

beggars_bush wrote: »

don't usually buy stuff unless we can afford it, and it is really needed
eg, we're talking about splashing out on a new mixer for baking. I asked the wife could she not just keep mixing it the old fashioned way.

I like it, keep the wife busy anyway

Built a new house last year and thankfully only debt is mortgage debt.
We have two old cars that will probably need replacing.
A post above about having it cleared by kids college time got me thinking of how to pay it down earlier.

A uk calculator for overpayments:
https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/
Ignore the £ sign the sums are the same.

I'll have to look at the budget and make a plan.

maccored

im debt free and its made a difference in regards worrying about debt .. but thats about all.

Sunrise_Sunset

theteal wrote: »

Nope, plenty of balance transfer cards around. My HSBC was 27 months at 0% and Natwest was 24. Both set with regular DD to be paid off at their last month. Both cards nicely stowed away in the bottom of a wardrobe never to be seen again. If I have a big purchase, I'll do it on the "regular" credit card (which is cleared monthly) and then get new balance transfer card and that'll do the job for however many months. This is not a regular thing obviously but buying stuff costing a few thousand is not a regular thing for me so the process works. I'll be buying a car for herself before the year is out, that'll be another one - although HSBC will be clear by then.

Again, these purchases could come from savings but it makes zero sense to go near them if the banks are providing free money.

I would view this differently. If you were to lose your household income or have it significantly reduced you may not be able to repay those loans or credit cards. Whereas if you had saved for it and paid for the things yourself you'd manage a lot more with reduced income.

Sunrise_Sunset

hero25 wrote: »

If I could go back in time and give advice to a younger me it'd be ..... aim to have the mortgage clear before the kids start college.
If you've >1 child in college at a time, it's the equivalent of very large mortgage - it'd be great if the actual mortgage was cleared when Leaving Cert is being done!
(Bear this in mind as you move houses over the years and obtain new mortgages!)

I just started saving for kids college. I don't really know how much I should be saving though. Generally speaking, what would the yearly costs per child be?

BeerWolf

Never liked owing anyone anything, so no.

If I ever borrowed money, it's always some amount I can immediately pay back later.

SCOOP 64

Sunrise_Sunset wrote: »

I just started saving for kids college. I don't really know how much I should be saving though. Generally speaking, what would the yearly costs per child be?

All depend will she/he need to stay in digs/campus, but id say €40,000 to €60,000 over 4 years.

Strumms

I’ve never borrowed money. I just remember sitting around the pub listening to friends of a similar age, mid 30’s up to their eyeballs in debt.. one minute telling you how they are loving family life, their house, their car etc..what plans they have... the reality being that it’s ‘their’ nothings yet, until paid for. Mortgage, car loan, loan for windows, household appliances.. not for me... Time comes to talk about where we all might be going on holiday and it’s from them.. “erm, next year maybe”...

They are spending every cent they earn in order to ‘exist’, that never appealed to me. A mortgage is a necessity, maybe a small car loan but going broke to exist with a nice roof over your head didn’t appeal.

Sunrise_Sunset

Strumms wrote: »

I’ve never borrowed money. I just remember sitting around the pub listening to friends of a similar age, mid 30’s up to their eyeballs in debt.. one minute telling you how they are loving family life, their house, their car etc..what plans they have... the reality being that it’s ‘their’ nothings yet, until paid for. Mortgage, car loan, loan for windows, household appliances.. not for me... Time comes to talk about where we all might be going on holiday and it’s from them.. “erm, next year maybe”...

They are spending every cent they earn in order to ‘exist’, that never appealed to me. A mortgage is a necessity, maybe a small car loan but going broke to exist with a nice roof over your head didn’t appeal.

I feel the same way. I made some financial mistakes in my 20s but put it all behind me, got out of consumer debt and am much happier now in my 30s in regards to finances. I save for anything I need or want, except the house which I needed a mortgage for.

Sunrise_Sunset

Sunrise_Sunset wrote: »

I would view this differently. If you were to lose your household income or have it significantly reduced you may not be able to repay those loans or credit cards. Whereas if you had saved for it and paid for the things yourself you'd manage a lot more with reduced income.

I would disagree, for one it’s easier to have savings for a rainy day if you haven’t spent them all on something.

I have gotten a car loan when I could have paid for the car 5 times over out of savings but I’d much prefer pay for it out of monthly cash flow than use up savings that are earmarked for bigger fish like a house deposit for example. Also was still adding to savings as well. So savings were actually increasing.

Actually specifically saving for something just takes too long, who wants to wait a few years for a car they can buy tomorrow with finance (once the finance is easily manageable for them of course). The fear of finance is always something I found strange.

My parents always borrowed when they needed to, for cars, mortgage, home improvements etc and always did so sensibly so I would have a very similar outlook to them. As they got older they didn’t need to borrow anymore as finances and incomes improved and they would tell you they were very very glad they borrowed when they were younger to give us a better life growing up rather than just made do.

Sunrise_Sunset

My rainy day/emergency fund is separate savings that I hope I won't ever have to dip into, but if I do need money then I have it there.
I am very happy to save and pay cash for house renovations, cars, holidays etc too. If it means waiting then it means waiting. It doesn't take away from us having a "better life".

Beasty

Debt-free and asset rich. Need to cash in the gold reserves now....

theteal

Sunrise_Sunset wrote: »

I would view this differently. If you were to lose your household income or have it significantly reduced you may not be able to repay those loans or credit cards. Whereas if you had saved for it and paid for the things yourself you'd manage a lot more with reduced income.

I think you may have missed the part where I said I have the money in savings, I just don't see the point in using them when so many interest free options available. Had I not got the savings, I'd agree that it's a somewhat reckless endeavour. Generally speaking I don't buy what I can't afford. If the sh!t hits the fan, then the savings can get raided.

theballz

The last two years or so, I have been debt free. It was fairly epic at the start but the novelty quickly wears off.

Makes you realise how their is more to life than money. I wouldn’t let debt stress me out ever again.

anewme

theteal wrote: »

I think you may have missed the part where I said I have the money in savings, I just don't see the point in using them when so many interest free options available. Had I not got the savings, I'd agree that it's a somewhat reckless endeavour. Generally speaking I don't buy what I can't afford. If the sh!t hits the fan, then the savings can get raided.

I do the exact same.

Sunny Disposition

Debt is a part of life for most people, and there are things it is needed for, especially mortgages.But one of the big lessons of the last recession is to keep your level of debt reasonable, don’t take out a huge mortgage and don’t lose the run of yourself with borrowing for completely unnecessary things like overpriced cars or expensive holidays.

addaword

Have a loan on the Jeep but the farm is debt free.

garbanzo

garbanzo wrote: »

With a bit of luck we hope to be totally debt free later this year. The only debt we have now is the mortgage. I intentionally cleared all other loans in the last few years. Felt good as each one was cleared.

Home loan was taken out in 2005 spread over 20 years. Have been overpaying for the last three years and added a lump sum too which has taken a few years off the term. It’s a fair chunk out of our income each month.

Being debt free and never borrowing again is a real life ambition of mine. We’re not there yet but the thoughts of it really fill me with happy vibes. I’m feeling like we are now within touching distance of it. I do think it is important not to obsess over it though. You have to enjoy life in the here and now. The key, in my opinion, is to achieve a balance between achieving debt free status and enjoying your life.

Will report back on how it all pans out....

g

So, reporting back that we’re finally debt-free since last week. Paid off the mortgage, our last outstanding debt. Certainly feel an element of relief and freedom with it. Looking back we’ve been paying a mortgage of one sort or another for the last 24 years (some of which were quite tough) so it is great to put that monthly commitment behind us and have a paid for home. We’d a bit of a low key party at the weekend to mark it, which was good. We’ve made plans for what to do with the extra cash we now have. Need to stick with that and get into that new financial routine now.

So that’s it. I’ve promised myself that’s me done with banks and borrowing for the future. Time will tell...but that’s the plan.

g

sparksfly

Paid off mortgage 5 years ago but then was immediately launched into college costs. That's finished now since May so debt free since then. Savings and lifestyle have both improved a good deal since then but I never stressed about debt at any time and always enjoyed life fully.

Potential-Monke

Due to covid and an increase in people smoking cannabis, it's been hard (or just a pain in the hole) to get, so I'm basically off it now. I paid off the last bit of my 'tick' debt 2 weeks ago, so when I'm paid in 2 weeks I'm gonna have a fine chunk of change more than I used to every month. Still have over €20k debt, that's not going to move any time soon unless I want to use my new available free cash to pay it off quicker, but that would also mean about 5 years of not buying anything but the essentials and having a terrible existence, so won't be doing that. It does mean that I'll be able to buy more things to make myself feel better, or maybe an aul holiday next year. So even that little bit of debt (in comparison to the larger one, but it was still significant) has given me some sense of relief.