For the past year or so I have been working to payoff all of my debts. I reached a milestone in that effort today. I am debt free except for the balance that I owe on my house. Fortunately the payment on it is low and I have a decent equity and a low interest rate. My plan for the cash that I have freed up is to increase my retirement plan contributions and to build a larger cash reserve. I also have some work that I need to do to my house that I will fund with cash flow. I am also looking at all of my routine monthly bills (cell phone, electricity, insurance, etc) to see if I am getting the best deal possible. I have to tell you that this feels good.
Debt Reduction
- Thread starter Gary
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For the past year or so I have been working to payoff all of my debts. I reached a milestone in that effort today. I am debt free except for the balance that I owe on my house. Fortunately the payment on it is low and I have a decent equity and a low interest rate. My plan for the cash that I have freed up is to increase my retirement plan contributions and to build a larger cash reserve. I also have some work that I need to do to my house that I will fund with cash flow. I am also looking at all of my routine monthly bills (cell phone, electricity, insurance, etc) to see if I am getting the best deal possible. I have to tell you that this feels good.
Jerry in SC
Member
I've been debt free (including my home) since 2005, I can't tell you how liberating it feels. With the current economic conditions, cash is king.
Gary, congratulations. Living without debt is a big step in the direction of total personal freedom. In addition to building up cash reserves you might want to think about paying down your mortgage principal a little faster. Even with a low interest rate, prepayment can save you major bucks in the long run.
DW
DW
Good on ya!
My wife and I have been diligently paying off as much as we can while still saving for a house and not living a completely austere lifestyle.
We're figuring even if we buy a house this year (the current plan) we'll have all other debt (car, truck, student loans) paid off in three years. It's a really nice feeling.
My wife and I have been diligently paying off as much as we can while still saving for a house and not living a completely austere lifestyle.
We're figuring even if we buy a house this year (the current plan) we'll have all other debt (car, truck, student loans) paid off in three years. It's a really nice feeling.
GatorFarmer
Member
I don't know. Currently the large economic outlook suggests that eventually we'll hit a period of high inflation, perhaps very high. In that case, cash reserves will be eaten away, but someone who's held onto debt may come out farther ahead. Owe 2 million dollars to Visa? No problem when you can sell a bag of turnips for that.
Wheelgunner840
Member
Congrats Gary.
Doing the right thing and paying off your debts is very admirable. I have been chomping away at mine for over 10 years, and will be 100% debt free in 4 months. I cannot wait!
I will of course be putting myself right back in debt by buying a home of my own in the near future. If all goes as planned, I will be in a house by the end of the year.
Good on ya! Now cut up all those credit cards except for one, that you need to have on hand to rent cars, reserve hotels, and other such stuff. Be sure to pay it off every month so there is zero interest. It is good to keep one on hand for emergencies as well.
I am really happy for you, because I know how it feels to be (almost) debt free! What a great feeling it is.
WG840
Doing the right thing and paying off your debts is very admirable. I have been chomping away at mine for over 10 years, and will be 100% debt free in 4 months. I cannot wait!
I will of course be putting myself right back in debt by buying a home of my own in the near future. If all goes as planned, I will be in a house by the end of the year.
Good on ya! Now cut up all those credit cards except for one, that you need to have on hand to rent cars, reserve hotels, and other such stuff. Be sure to pay it off every month so there is zero interest. It is good to keep one on hand for emergencies as well.
I am really happy for you, because I know how it feels to be (almost) debt free! What a great feeling it is.
WG840
Being debt free definitely gives you a sense of freedom. I rent, don't own a house, I pay off my credit card bills every month, my car is paid for.
I have been thinking I should buy a house since the market is depressed, maybe there are some good deals. When the hyper inflation hits in the near future, the low interest rates we have now will probably never happen again for decades to come.
I have been thinking I should buy a house since the market is depressed, maybe there are some good deals. When the hyper inflation hits in the near future, the low interest rates we have now will probably never happen again for decades to come.
Definetly buy a house.
I have paid cash on the barrel head for everything I own.
House, car, quite few guns.
I figger I can live on my savings for the rest of my life quite comfortably.............. if I don't live past next Tuesday!!!
Just kiddin'
House, car, quite few guns.
I figger I can live on my savings for the rest of my life quite comfortably.............. if I don't live past next Tuesday!!!
Just kiddin'
Capt Steve
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Gary, welcome to my world. What a great feeling to be debt free. It doesn't come easy, requiring much personal sacrifice but then anything worthwhile does. We have been able to comfortably retire because we figured out years ago that early retirement doesn't require a lot of income... just not much out go! To those working towards this goal I salute you. Hang in there and your day will come.
BLACKHAWKNJ
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"Cash on the barrel"-what a quaint concept. That is how the wealthy do it-they pay cash (OK, cashier's check, bank draft, etc.)
Welcome to our world. I have lived debt free, I have bills, not debts. It doesn't require sacrifice so much as it requires discippline, planning, forward thinking and really deciding what is important to you. It also helps to be
a bargain hunter in the sense of recognizing good value and getting things you can actually use. Knowing the difference between gross and take home pay helps. i think debt has become rather seductive and much of the current economic crisis is due to overreliance on debt financing, whether it's by individuals, corporations or governments.
Welcome to our world. I have lived debt free, I have bills, not debts. It doesn't require sacrifice so much as it requires discippline, planning, forward thinking and really deciding what is important to you. It also helps to be
a bargain hunter in the sense of recognizing good value and getting things you can actually use. Knowing the difference between gross and take home pay helps. i think debt has become rather seductive and much of the current economic crisis is due to overreliance on debt financing, whether it's by individuals, corporations or governments.
Congratulations, not many have shown that discipline. You will not regeret it in the years to come
Steve
Steve
Buy a house, for sure, if you live in it fine, if not, this is a good market (in most areas) for rentals. The tax savings are good (only your CPA can look at your income and dedutcions and tell the real deal). If you rent it, and shtf, you can live there. If inflation hits (it will) you will pay the fixed mortage payments with income from inflated income dollars. Go for it.
tb
tb
Target for retirement was debt free, and it is very rewarding to be so. If you have a low interest rate on your house, you may want to increase your payments, but don't rush to pay off, but put those extra dollars into savings, half tax deferred and half regular savings. Don't charge anything you aren't prepared to pay in full when the bill comes. Use that credit card for lots of purchases, and get the "rewards", but pay the bill in full when it comes.
Since I retired we built a new condo, and took a trip to Italy. When my Son-In-Law lost his job, I was able to send them their house payment every month, so they won't loose it. Hopefully it won't be too long.
Since I retired we built a new condo, and took a trip to Italy. When my Son-In-Law lost his job, I was able to send them their house payment every month, so they won't loose it. Hopefully it won't be too long.
flop-shank
US Veteran
I've been debt free for nearly three years. In that time I've built a nice cash reserve. I intend to put much of that money into home improvements this spring because, like Gatorfarmer, I expect my saving to be devalued somewhat by high inflation in the months and years to come.
About a decade ago a coworker of mine told me "I'm not sure being debt free is all that it's cracked up to be". I wonder if he's singing the same tune now. Michigan is in a borderline depression and I'm financially treading water, but I'm not sinking or worrying. I'm glad I didn't listen to the people that told me to "never pay off your house, put the money into retirement instead".
About a decade ago a coworker of mine told me "I'm not sure being debt free is all that it's cracked up to be". I wonder if he's singing the same tune now. Michigan is in a borderline depression and I'm financially treading water, but I'm not sinking or worrying. I'm glad I didn't listen to the people that told me to "never pay off your house, put the money into retirement instead".
Jerry in SC
Member
Liquidity is never a bad idea, having cash always offers opportunity to make more.
I know that high inflation will erode a cash reserve. It can be offset to some degree though by putting a portion of the reserve in a CD or money market account. With the economy as unstable as it is I believe that it would be unwise to not have a decent cash reserve. Having cash in hand allows access to a lot of bargains that would not be available to you if you were using credit. A good example of this is a gun show. You are in a lot better bargaining position with cash than with a credit card.
