DEBT FREE!!!

Man, I can identify with so many of these. We were paycheck to paycheck for years. Finally got rid of all the bad debt (everything but cars, mortgage, and student loan) for a long time. This past 12-24 months we've kind of gone on a spending spree. Combination of good old fashion failure to accept delayed gratification, 3 adult children (20+ not in school) not pulling their own weight, and falling into old habits of spending money to make us feel better when we're unhappy.

Giving those adult children through the end of this year to get their sh%t together, then we're cutting the purse strings and let them sink or swim. I was a bit of a hard ass about this for a long time, then we got into a place financially where we could help them; next thing you know, we're doing way more than I ever intended.

Probably take us a good year or two to get back where we were after the kids are off the payroll.

 

Congrats! It's like being in a whole new world knowing you are out of debt

 

Yeah, I don’t pretend I didn’t know better. Just hard to convince yourself to worry about the future at that age. “I can buy this stereo, and only pay $10.00 a month? How can I pass that up?” It only takes doing that about 150 times before you figure out the problem.

One thing I will say though, is that back in the day it was way too easy to get a credit card. My first credit card was from Sears. They had a table out in front of the mall, and were giving away Swiss Army knives if you filled out an app. Me and my buddy were probably a month shy of graduating high school, so we figured “Free knife? Sounds good.”
I’m pretty sure I didn’t even put my real SS number on the app, but low and behold a card showed up my house a few weeks later. My friend got one too. We were at Sears buying stuff in less than an hour.

That knife probably cost me twenty grand in the long run, but I actually still have the damned thing. Don’t have anything else I ever got with that card though.

And funny you mention Best Buy. My wife will lose her shit if you ask about a Best Buy card.

 

So no house payment, or anything else??

 

I kind of went overboard with doing for the kids at one point also once we got our debt paid off. Kind of the same thing. We were enjoying having extra money for once, and I spoiled them for a while.

 

You are absolutely right. Financial education is not taught in schools and it really should be, more so than algebra and calculus in my opinion. Kids need to be taught at an early age how to budget, but I guess parents drop the ball all too often most times. I'm guilty but I'm quickly making up ground on this. My oldest is 20 and paying cash for his own college, car and insurance. He also pays me for food while he stays at home with a full time job. He squandered away a scholarship thinking daddy was going to pay. Wake up call! My wife and I paid for our own college and appreciated our education more for it, so can he, and he is doing a great job of it.

 

Other than living expenses? Nope

 

Lots of good stories in here and some tough ones as well.

I have made a lot of bad decisions in my life no doubt but have made it through pretty well so far...knock on wood. My only advice is we really need to understand the difference between assets and liabilities. Assets put money in your pocket on a monthly, quarterly, yearly basis and liabilities take money from you on the same terms. Example, your home/residence is a liability and not an asset....a home you rent out is an asset (if purchased correctly).

 

I haven't told my son this but IF he can get his 4yr Electrical Engineering degree with relatively little student debt I may pay it off for him, but I was not about to pay for his college altogether. I saw too many kids squander daddys money away by getting drunk and skipping too many classes taking 6 or 8yrs to get a 4yr degree

 

I will say that a big reason why I bought the tundra was because I wanted to keep it long enough to not have a car note for at least 10 years. I felt that all my American cars were basically money pits. I couldn’t trust them. I probably should’ve gotten an old Toyota but I wanted one last new car to last me 15+ years. Yes it’s a car note, but it was a calculated decision and my first and last new car for a long time.

 

Some stories are deep here... Let me add.. it might help someone.

So here is the back story for those who care….

I got taught the value of a dollar at age 10. I have earned my money since then, mainly with house chores. At age 14 I got a summer job making silly good money as a pipe fitter with my dad. During the school year, I hated to ask for money, so I quit sports, and got a job.

So, I got taught how to pursue what I want (career wise) and effect of that is I make good damn money. One thing I failed to understand and learn was how to save money. I met my then girlfriend and now wife in 2003, we graduated in 2006, and she is a sick nasty finance guru. So after I landed a job full time job making good money, she made me a spread sheet with all my retarded bills and said follow it. It consisted of:

· Here is your retarded bills you have racked up (called me an effin moron)

· Here is what you earn after taxes

· Here is what you have left after your monthly bills are paid

· This is how much allowance you get each week [After that is gone you’re SOL till next week (taught me discipline because clearly we weren’t at the time married and I could easily just spend money but I trusted her and I wanted to learn how to do better personal finance)]

· Last box was here is what you can save each month if you follow this

I racked up a measly 3k in debt right as high school ended. Cleaned that up in 4 months with her nasty spreadsheet, at the time I hated it haha. Now I have no student loans and no major credit cards. My girlfriend then and now wife molded me and I stuck with it. My wife keeps me from spending but fun fact she never tells me no, she methodically talks about it and somehow talks me out of my cockamamie ideas.

I needed to see it in a spreadsheet to make it make sense. years later, I still give myself an allowance each week (obviously more than back then but not much more). If I want something even though I can buy it out right, I plan for it. So, I pull the money out of my weekly allowance and stash it away (I did it for my tires I just got).

Moral to this, personal finances takes discipline man. I have co-workers who buy what they want when they want and give me tons of crap because they know I have good money habits.

Congrats on debt free, acquire a strong money discipline, and keep it that way! I can't wait to pay my truck off!

 

on a home mortgage, pay more every month. on a 30 years loan, for example $200 extra towards the principle will shorten it to 25 years.

 

Aint no such thing as debt free!!!
Debt free = oxymoron

 

Going to a bi-weekly payment vs a single monthly one knocks off roughly 3 years as well.

 

Technically you're right. Your never debt free, even with no mortgage you have taxes and utilities.

However, I look at debt free as only having mortgage and utility bills. Which means no vehicle loans, credit cards, or anything else unnecessary.

 

Gotta love property taxes

 

When you say debt free you’re talking about when your monthly debt ratio goes to zero.
Mortgages, loans and credit cards with outstanding balances or anything else that has any kind of balance counts against your debt ratio. Monthly bills that you pay off in total each month like credit cards where the balance goes to zero, and other bills like utilities, insurance, etc. that you pay in full don’t count against your debt ratio. If you pay insurance monthly, it counts against your debt ratio. If your debt ratio is zero, you’re considered debt free.

 

Some truth to this statement, I will always be in debt to Jesus Christ, but debt according to my wants are gone as compared to debt according to my needs.

 

True^^^

 

I'm 56, retired and owe nothing!
Downsized from a 4200 sq ft house to a 550 sq ft tiny house. Converted a bus into an RV and hitting the road full time. After 7-8 years in the bus I'm gonna sell it and spend 7-8 years traveling by boat.

One of the books that helped was 'The Millionaire Next Door'.... but following the advice of Clark Howard has been the single most important thing I've done!!!

 

I'm gonna hafta look into that book. Thanks for that

 

You bet!
If you're not familiar with Clark Howard, you HAVE to check him out!!
https://clark.com/

 

I own several companies and at our remodel office we have not taken cradeit cards upon couple years ago. All of our business are debt free and no credit cards at all. If we have money, then we buy it, if not figure out! That's our modo.

 

Congrats! Dave Ramsey made me sell my Tundra in BS2 (not really I just did it to pay off the debt faster!). Now saving to pay cash for another one in the future!! (Hopefully not too distant future)

 

I am a big fan of Dave Ramsey, Pete Adeney (mr. money mustache), Robert Kiyosaki, and others. I am not debt free. HOWEVER, my assets far outweigh my debt. If I sold my rental properties that I paid cash for, then my debt would easily get paid off. BUT then my passive income would drop to zero. I do a little of everything when it comes to smashing debt. I have a 30 year mortgage, but I make at least a 15 year payment. I have a loan on the tundra, but enough cash to pay it off. I have lived in my home for 8 years and have it 65% paid off. My wife has student loans but they will be gone by the end of the year. Financial education isn't taught. You have to find it yourself and wade through TONS of B.S. to get the truth. I originally was going to crush my debt, but then decided to buy trashed houses and re-build them into rentals. The rent makes payments or builds up into another property. This is a hybrid plan that includes Ramsey, and Kiyosaki in the same strategy. CONGRATS on no debt... Now build a money making machine with assets that you can keep regardless of the economy and markets... Finally everyone needs to understand what the Federal Reserve is and how it works. Fiat Currency is not as cool as the media makes it out to be. Ever wonder why a new Tundra costs $45k? Learn fiscal policy and you will soon understand. Not all debt is stupid. Einstein once said: Those who don't understand compounding interest pay it, but those who do understand it earn it!

 

I write the truck off through the rental properties and depreciate it while letting Toyota financial finance it for 0.9% interest for 60mos... I also write off the interest, insurance, plates, gas, and maintenance. As I said, not all debt is bad debt. Once you learn how the financial system works, you get smart quick. The problem is you have to make money with the truck to make the payment. People get in waaaay to deep with write offs and forget that the payments are still due every month. Discipline!!!!

 

We like the idea of buying a revenue property eventually and even looked at homes with basement suites before putting in an offer on the house we did, but being landlords is something we have no interest in. It takes a special type of person to be a successful landlord. Big respect to you for making it work.

 

Several folks have mentioned spreadsheets. To me they are key to help you mange and plan and work your way out of debt. But additionally it can be good when you are overwhelmed by your debt situation to have a look at the spreadsheet and see that in fact you are chipping away and making progress. It can be tangible evidence of moving forward when your ultimate goals still seem distant.

 

Congrats!!! Looking forward to 2023 until my payoff!!!

 

Spreadsheets are great, but they are a little difficult to chart progress. Make and run a budget. Fixed expenses and utilities are the easy part. Leave money in the budget for fun. Find other ways to have fun that don't cost a ton of money. Go on a picnic to the park rather than Applebees. Buy a thermos and a water bottle. Make coffee at home and take it with you. Drink more water. It is free from the tap and healthy. Cook dinner with quality ingredients. It is summer, fire up the grill damn it! Make extra and pack lunch. If you don't have time to cook every night then pre-cook on the weekends so it is easy to make dinner during the week. Finally if and when you have extra money at the end of the month.... DON'T BUY STUPID SHIT THAT YOU DON'T NEED WITH MONEY YOU DON'T HAVE!!!!!!