Debt Free
Debt Free questions and answers
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Q: Debt free?
Is anyone trying to live debt free? I mean really trying. No using credit cards, paying off your house early, etc. I'm not doing it but maybe I should. Is it even possible?
A: I've been trying to for the past six months, and it's not easy. I pay cash, now, for most everything - If I don't have it, I won't spend it. I have paid off the house, however, which is a great feeling. Debt free IS possible, but it surely takes a lot of planning...
Q: What would it mean to you to be completely debt free?
I am a budget counselor (we counsel for free at our church) and I am looking for ways to motivate people who enter the program.
I am doing a little research to understand what it would mean for different people to be completely debt free.
What would you be willing to do to become debt free?
I mean give up things (please no nasty responses) I am only looking for serious answers. This is a way you can help other people
A: i'm 39 and have worked hard since i started working. i am debt free, no mortgage, no car or truck payments, no credit card balance. i will be able to retire before i am 50 and be able to enjoy life and afford it.
i gave up weekends, vacations, and some pride to make sure my family and i won't have to worry about bills in the future like college and medical costs.it's really just learning how to live within your means and still being able to smile. i never missed anything to do with my 2 sons whether it was 5:30 AM hockey practise or home work. i made sure my wife was happy and enjoyed what she was doing and made a point of spoiling her when i could.
look after your family and the rest will look after itself.
Q: Do you view living totally debt free as a from of conservation?
By debt free I mean the only bills you would have are the mortgage, and monthly bills like phone, internet, power. NO car payments, NO credit card payments, NO installment payment of any kind.
Even better for those rare folks who have paid off their mortgage, and live off grid.
You can still have good credit, and not have huge debt on credit cards. If there is something we want, but more usually need, we will SOMETIMES put it on a credit card. When the bill comes, the entire amount is payed. No minimum monthly payments, as that is totally idiocy.
We are frugal, but NOT cheap. That is such a difficult concept for people to understand. We do not go out and spend money on frivolous cheap junk. When we need something we buy quality items that will last a LONG time.
My husband is doing a lot of construction of barns right now. He needed a quality hammer. He got advice from his Master Carpenter best friend. You can get a hammer at the dollar store, you can get one for $5 at WalMart....or you can buy a true quality hammer (made in America, by the way) for $27.95. Our carpenter friend has been using his on construction jobs for 25 years. That is just one small example.
We do not ever feel sucked in to "keep up with the Jones."
People who strive to find peace in their lives, and finding happiness in simpler things will lead a much more fufilling life. People who take pride in their own abilities, bodies, and minds, will be more confident, and better prepared to deal with whatever the future throws at them.
Our next home will be large, 5000 sq ft, straw bale house...totally off grid, and constructed by ourselves. It needs to be so large to hold our huge personal library, since we are avid bibliophiles.
Imagine a country where people strove to have no bills, pay of mortgages early, and produce their own power. They would learn to THINK before flipping something on.
Imagine the good they might do for their communities, and neighbors, and the world, if they taught their children to honestly be happy, and not always desire "more."
What if the focus became on people, relationships, animals, and the world, and not on aquiring "stuff?"
A: Hi!
As a Franciscan, I don't have a bank account - but am allowed a building society account that does not let me borrow. It works for us. We have a simple home and a reasonable mortgage and our surplus money supports local and more further afield projects.
Living beyond ones means is on a par with our species living beyond the planets means.
Good question.
Good wishes.
Q: Living debt free or living with loans and investments, which is better?
Around 75% of my salary is spent on loan repayment, I have investment in shares, I am planning to sell shares and close all loans and live debt free but without much investment, is it a wise decision?
A: Loans are tax deductable.
Investments are taxible.
Q: 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.
A: 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).
Q: I need help with creating a debt free theme tying in the 4th of July. Any ideas?
The base of my idea is to commit to a pledge towards becoming debt free. I need something catchy and fun!
A: Get more bang for your bucks and become Independent form debt
Happy fourth of July http://www.youtube.com/watch?v=07SjIOBwGNI ( comments appreciated)
Q: What are the tax benefits of being debt free (mortgage)?
We have 2 children and will be debt free by the end of March. What are the tax benefits. For example, mortgage write off verses increased taxes. Looking for some informtation.
A: Too many people confuse the tax deductability of mortgage interest with being a huge benefit that one should keep.
You are always, always, **always** better off not to pay the interest in the first place, whether it is tax deductable or not.
Many people also ignore the fact that if you don't itemize, you still get the standard deduction even if you don't have a mortgage. This new standardized deduction will replace your itemized deduction making the loss of the deduction that much less noticable.
So do it, and congratulations!
Q: Philippines a debt free country after Pacquiao's fight in March?
If you were the Philippine government, would you bet the Philippines' debts for Pacquiao in his forthcoming fight in March?
If Pacquiao wins (yes he will) , what would you do to uplift the status of the Philippines (Filipinos) having a government which is debt free.
A: F*** the philippine president and her crocodile corrupt cohorts!
Pacman is but one great hero that unites the nation from all classes, extremists and soldiers( they did a ceasefire once in his fight)
Pacquiao is one heck of a fighter and he is going to fight a devil may care attitude. Goodluck to Both fighters. F**k the President and her CCC's!!!
you are not making the Filipinos better.
Q: Has anyone read books that say you can be debt free in 3-5 years?
There are books out that say you can be living debt free, that is including your house payment in 3-5 yrs. They claim it is simple and amazing math. I would like to invest in it to find out, but don't want to be scammed.
A: It is true. I would suggest you do it on your own and follow the ideas of Dave Ramsey. I have listed them here for you. Visit my blog for more info on Dave Ramsey. http://personal-financial-advising.blogspot.com/2008/05/dave-ramseys-debt-snowball-debt.html
Dave Ramsey's Debt Snowball Method for paying off debts
In the last few posts I have been writing about Dave Ramsey and all of the incredible personal finance information he has to offer. Their are most certainly Dave Ramsey critics out there but for the most part everyone thinks that the information he offers is extremely helpful. The only complaints come from those that argue that Dave Ramsey's plan for financial freedom and financial peace is to conservative. I could agree with this if it was not for the debt epidemic among Americans. Unfortunately the criticism from these Dave Ramsey Critics does not factor in the fact that a lot of Americans do not have the discipline to pay off their credit cards in full every month or keep a handle on their debt.
Today I wanted to talk in detail about Dave Ramsey's Debt Snowball reduction plan for paying off debts. The Debt Snowball reduction plan is the second step in Dave Ramsey's 7 Baby Steps to Financial Peace training course and is probably the most important step in a persons quest for financial freedom and financial peace.
The ideology behind Dave Ramsey's Debt Snowball reduction plan is to organize all of your debts and setup an easy, manageable, and results oriented plan for paying these debts off. These debts can include credit cards, car loans, student loans, payday loans or personal loans. It basically includes any debt that you have excluding your home mortgage.
The first step in the Dave Ramsey debt snowball debt reduction plan is to make a excel spreadsheet list of all of your debts with the lowest balance at the top of the list. After you make this list you then need to allocate as much of your monthly budget as you possibly can to debt elimination. After you have listed your debts in order from lowest to highest and decided how much you can put toward debt each month you need to determine what your payments for each account should be. This step is very simple. In the debt snowball debt reduction plan you pay only the minimum payment toward each debt you have except for the one at the top of the list (one with the lowest balance).
The plan is to pay off the smallest debt as quickly as possible and then once it is paid off you move on to the next smallest debt you have. When you move on to the second debt on your excel spreadsheet you then allocate the whole amount that was originally going to your smallest debt (the debt that is now paid off). These means that you will continue with the minimum you were paying on the now smallest debt and add the total amount that was going to your debt that is now paid off. After paying of the second smallest debt on your debt snowball excel spreadsheet you will move on to the third smallest.
The idea with the debt snowball reduction plan is to continue doing this until you have paid off all of your debts (excluding your house payment). Dave Ramsey's rational with the debt snowball method is to gain steam and see results by paying off the smallest debts first. The Debt Snowball method will help you to see real results and help motivate you to continue. For most people they need to see results and feel like they are making progress or they will quite within 6 months of starting a plan to pay off their debt.
Below I have included an example of the Dave Ramsey debt snowball debt reduction plan for my readers. I have also included several links to Debt Snowball Calculators. The debt snowball calculator should help give you an idea of how long it will take to pay off each debt.
Example of the debt snowball method (Courtesy of Wikipedia)
Ignoring interest rates, let's pretend you have the following debt and minimum payments:
Car Payment - $2500 balance - $150/month minimum
Credit Card A - $250 balance - $25/month minimum
Loan - $5000 balance - $200/month minimum
Credit Card B - $500 balance - $26/month minimum
Your minimum payments for all debt would be $401 per month. You would order your debts in the following order (lowest to highest):
Credit Card A - $250 balance - $25/month minimum
Credit Card B - $500 balance - $26/month minimum
Car Payment - $2500 balance - $150/month minimum
Loan - $5000 balance - $200/month minimum
Now, assuming you had $100 extra per month to send in, you would apply that $100 to the Credit Card A so that the payment for it would be $125 per month and the other debt would receive the minimums.
After Credit Card A is paid off (in two months), you would apply the extra $100 to Credit Card B PLUS the $25 you were sending in to Credit Card A. So now your payment to Credit Card B would be: $26 normal minimum + $25 that you normally sent in to Credit Card A + $100 that you are able to send extra.
Your payment to Credit Card B would be $151 instead of $26. Therefore, you would pay it off much faster. Then, when Credit Card B is paid off, you would now send in the following to the Car Payment: $150 normal minimum + $25 that you normally sent in to Credit Card A + $26 that you normally sent in to Credit Card B + $100 that you are able to send extra. Your payment to Car Payment would now be $301 instead of $150.
To follow the debt snowball debt reduction plan you would simply continue to follow this plan until all debts were paid off.
The debt snowball debt reduction plan is one of the best plans available for paying off debt. It helps people to see immediate results and gain momentum in their plan to be debt free. Go ahead and start your own debt snowball reduction plan and begin your journey toward financial freedom and financial peace.
Dave Ramsey is personal finance expert who specializes in giving out information to help people get out of debt and achieve financial peace. His radio show The Dave Ramsey Show is aired on over 300 different radio stations each day and heard by over 3 million listeners. Dave Ramsey is also the author of many great books including The Total Money Makeover, Financial Peace, and More Than Enough.
Q: Who in the US lives debt free?
Is there anyone else in America who actually lives outside of voluntary servitude (aka, debt free)?
If you live debt free, please share what you are doing and how you did it.
I just want to know there are still intelligent people living in the States.
For those who ask "are you?".
Yes, I am living debt free (on a modest income, no less). Hence the 'anyone else' in the orig question.
To the millionaire, not all wealthy people live debt free. Many wealthy people simply increase their level of debt beyond the million(s) they have in assets.
A: My mother is. She saves a large amount of her income for retirement, or she saves it for purchases she will make in the future, like a car. This way she can pay for the car straight up without a loan. When my father died we collected the life insurance, and used it to pay for the rest of our house. Voila! No more house payments. We have small debts, such as braces for me and my sister, but these are being paid off and we will not have a problem getting rid of them. My mother has college money saved for me and my sister so there will not be debt. Although our financial situation isnt great (income under 40,000 a year) our family was able to be financially intelligent and navigate through our consumer society without racking up debt. I hope that helps :)
Q: What percentage of people do you think are "debt free"?
With the exception of a mortgage and car (you need a place to live and transportation to make money to stay debt free), how many people do you think live debt free? Within their means (managing their debt wisely)? What percentage are spending money like there's no tomorrow (receiving assistance of some sort, but still buying video games, cell phones, and other non-essentials)?
A: I think that only about 3-4% of Americans are totally (not even mortgage) debt free.
I think it's somewhere around 20% if you include mortgage and car loans.
Q: What is the best way to become debt free?
I have looked and read all kinds of diffrent stuff. On debt reduction, debt consolidation,debt settlement. I know that I don't want to file bankruptcy!! Im about 8,000 in debt with-all mostly being hospital bills. I am a mother who makes about 17,000 a year, and it takes about that much to survive. So Im trying to figure out a way to get out of debt, be able to afford the payment and it not hurt my credit score. Please anyone with experience -Help!!!!
A: stop borrowing and pay down your debt. you may have to get a 2nd or 3rd job. if you have a car, sell it and get something that's paid for if your car is not. don't bother with people who try to fix your credit, it's better for you to learn how to manage your own bills instead of just giving the problem to someone else.
Q: can I trust debt free direct to guide me in the right direction?
I am in financial difficulties and are seeking advice from debt free direct, should I have sought help from somewhere else
A: ye go to citizens advice
they will do the same thing as debt free and they willnot charge like those lot will
Q: What is the most expensive thing you own that is debt free?
No payments--you own it free and clear. Mine is a washer & dryer and a 50 inch flat screen t.v.
A: Strange question! my house, free and clear since 1997 and a house payment is the only debt I have had since 1978. I did it and I guarantee most (not all) other people could do it if they really wanted too.