How many people aspire to be debt free? How close are you?
I am just wondering if there are others out there, or if everyone is addicted to credit.
I’m only $2000. away from being debt free. Really excited.
I don’t think all that many actually aspire to be debt free. I certainly don’t. Debt can be darn useful if used properly. No way I could afford a home without using a mortgage.
When I bought my car, they offered me 1.9% financing. That’s cheap debt. So instead of selling some stocks to buy it, I financed it and let my investment stay where it was.
I did aspire to be credit card debt free. And that has happened. There is no upside to having credit card debt at those high interest rates they charge.
My real goal is to have a positive and growing net worth (assets minus debts).
How many of you if you were suddenly out of debt would stay debt free?
I hate debt myself and want free of it forever. If I can break free, I am never going back. After reading some of the new credit card rules. I am just tired of paying to keep these (insert derogatory term)’s in business.
I did not get *suddenly* out of debt, but I am debt-free and I will never go back. I worked very hard to pay off all credit cards, loans, & mortgages, but it was totally worth every bit of sweat, effort and self-control I put into it. I will never again use a credit card or finance a car. I paid cash for my last auto and it was a liberating experience. Living in a home I own makes me feel secure, especially in times like these.
Best wishes for you to also succeed. Below is a link to how I became debt free.
How does it feels to be credit card debt free? and should I close my account now that I payed off?
Finally I paid my credit card. It is feeling good. Should I cancel my credit card account and stay debt free? or what?
No-leave it open, if you close it it will lower your credit score. If your afraid you might use it- freeze it in ice, stupid but if you have to un-thaw it it makes you think twice about using it. You also need a cc to rent a car, or reserve a hotel room so keep it and congrats on being debt free!
How do you celebrate being debt free?
the list is probably endless but just give me a few suggestions. no im not debt free just yet. got 3 more debts. 2 of them will be paid off before the month ends and the 3rd sometime next year.
Wait an extra month and use what would have been your debt payment money for a little weekend holiday and pay cash for whatever you do.
Here is a plan that will help you to become wealthy and never to have to stress about money ever again.
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.
2. Add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
3a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
3b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? The Human resources Department will have the forms for you to fill out. Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire. Start learning about investments. Do some reading. I like “The Lies About Money” by Ric Edelman, “Ready, Set, Retire” by Ray Lucia, and anything by Ed Slott. They are very good books and each has a little different perspective so you can decide your own comfort level with your investments. Or you can go with the “timed” mutual funds offered by your company 401(k). If you plan to retire in 2040 or 2045 you can choose that plan.
3c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
Better to take 30K out of 401k and pay off mortgage completely and be debt free or let it ride?
I still have 25years on Mortgage and could muster the cash to pay it off by combining all liquid assets and be debt free?
That first answer isn’t quite the way I’d write it but it’s probably not a good idea to pay off your mortgage early, and interest and penalties isn’t the whole reason.
One factor is your FICO score.
By cancelling your debt you can reduce your score, the same thing for paying off or cancelling CCards to reduce fees or avoid temptation. The more small to medium debt you payoff or cards you cancel will reduce your available credit and reflect negatively on your credit score.
Weird but true.
As far as paying off your mortgage, I’d see an investment councelor before I did something like that, even if you can afford to lose the write off, if you qualify for it at all.
One thing is, you’re paying your mortgage off with dollars that get cheaper and cheaper each year due to inflation eating away at the dollars buying power.
What you may be better off doing is getting a copy of Money Magazine and studying the mutual fund market. I’ll bet, unless you direct your own 401k that most of what’s in there today is money market, cash and a few stocks.
Some of the Foreign and Emerging Funds could make a nice addition to your 401k and make more differece if you left in the the 30k you are thinking about spending to pay off the house.
Now, if the cars aren’t paid off I might take out a second mortgage to pay them off. Cars are almost never an investment, just a purchase that depreciates every day you own them.
It may make you feel nice to pay off the house but you may be making a financial mistake to do that, but without knowing the complete picture, your age, income, net worth, etc, I can’t get any more exact than that.
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