I recently got out of debt (again), and was just curious how many of you guys are still struggling / dealing with debt, or have recently gotten out of it. I know a few of you on here have posted about this, and kind of wanted to see how you guys were doing... if you were still debt free.


The first time I was in debt, was when I was young... made some dumb decisions, and then didn't pay my credit cards when I was laid off for 3-4 months. About 3 years later, I paid back all my creditors after getting a credit report. The SECOND time, I was again being a little bit stupid. Money was flowing well, had a great job, and started buying stuff I didn't need and racked up a sizeable amount of debt (under $10,000, but I consider that to be a **** -load). I worked really hard for about 2 years, not buying anything frivolous, and was able to pay it off. This LAST time, I moved the family to another state and my wife didn't have a job immediately, so we incurred some debt as a result of that, and THEN I started going to school and paid a lot of it out of pocket (credit card). It took me another 2 years to finally pay that off while basically living on bare necessities... can't really say that was irresponsible, but I've been debt-free now for a few months with savings. Only debt I have is a mortgage.


Just looking to hear from others on here who have managed to stay debt-free, or are dealing with debt, and what they've done to REMAIN debt-free. I've maintained retirement accounts through the entire time (since the first time), as well as some savings for emergencies, but I finally have both savings AND no debt. One of the things that I've been able to do so far is to consistently pay for things in cash. The amount I was forking over to pay on interest wasn't that much compared to what I was paying to get it down... but not having those payments every months has been pretty shocking. I've upped the amount that I save. Next plan is to try to pay off the house. Anyway, I'd love to hear from some of you guys who got out of debt on their own and have been able to remain out of debt. If anything, maybe this thread will snap you back into the right direction if you've strayed.

Yep. Up to my eyeballs due to unexpected job changes and medical issues.

Expect for a student loan that was being paid off little by little, I used to be debt free as i only spent what i made. If i could not afford something i wanted, i didn't get it. ( tho i would consider a home loan as good debt, i was still renting ). Don't ever expect to be again.

[This message has been edited by User00013170 (edited 08-21-2013).]

Indebted to many and for many things but not one penny in debt.

quote Originally posted by User00013170: Yep. Up to my eyeballs due to unexpected job changes and medical issues. Expect for a student loan that was being paid off little by little, I used to be debt free as i only spent what i made. If i could not afford something i wanted, i didn't get it. ( tho i would consider a home loan as good debt, i was still renting ). Don't ever expect to be again.

Are you saying that you don't think you'll ever be debt free again? I assume you've explored all options? Yeah, the first time I was in debt... I was actually pretty fiscally responsible (didn't spend a lot of money, was pretty cost-conscious), but... when I was laid off for 3 months, I got scared and used my savings to sustain myself rather than pay my credit card and just didn't answer the phone until they stopped calling... haha...

That sucks... sometimes some of the debt is more "important" than the rest of the debt... meaning like credit card bills are usually the biggest credit score killer, and of course... have the highest interest rate. Things like medical bills usually don't have any interest on them once you start paying... even if it's like $25 a month on a $20,000 bill or something crazy. Is there any kind of prioritization that you can do? That's what has worked for me in the past... highest interest rate paid first... that, and selling crap on eBay that I bought when I was being irresponsible.

quote Originally posted by maryjane: Indebted to many and for many things but not one penny in debt.

You're a good man MJ... a man of principle...

[This message has been edited by 82-T/A [At Work] (edited 08-21-2013).]

Never had any major debt, but it took me forever to get rid of what little I had (2 or $3k worth) when I was about 20, between low wages and high interest. As soon as I got rid of it, they started throwing credit card offers at me. Been sitting happy with low interest since. Stayed in the mind-frame that I was broke/poor. You know: eating PB&J sandwitches at work, rarely eating out, stocking up on necessities when they're on sale. Wife turned into a major couponer, so we're well and truly stocked up.

So, yeah. There's no reason short of accidents/disasters to be in debt. You don't need that cell phone plan, a big tv or that fancy new car. You can get those later as a reward for being financially responsible now.

Of course, someone's gotta keep the economy going, so if everyone did as I do, it would be in trouble. Then no one would be able to live "on the cheap".

I haven't been in debt in a long time, and plan to keep it that way.

no credit card or car loan debt, but - yes 1st & 2nd mortgage. 1st is gonna be done next year tho.
and, then I will be borrowing for a car

but, I do own more than I owe. and, once that happened, it seemed everything got SO MUCH easier.

Up to and beyond my eyeballs. I'm slowly paying it off, but damn... It's tough.

quote Originally posted by 82-T/A [At Work]: Are you saying that you don't think you'll ever be debt free again?

Unless something drastic happens, yes that is what i'm saying.

quote Originally posted by User00013170: Unless something drastic happens, yes that is what i'm saying.

Man... that sucks, I'm sorry. Are you doing anything to try to fix that or I mean... it sounds so final?

Yep, and I have come to the realization that it will more than likely always be that way.
I`m sure somewhere out there is a term that doctors may call it but it is basically called "spending just as much as you make"
Sad but true.

quote Originally posted by 82-T/A [At Work]: Man... that sucks, I'm sorry. Are you doing anything to try to fix that or I mean... it sounds so final?

I am working towards minimizing it, but due to my age ( running out of time ) and the fact a big chunk of it is a student loan, that i got royally screwed on, it was almost paid off once, under 10 thousand.. now its over 80 grand... i don't see a legal way of getting it gone. ( i have paid if off more than once in the amount i have paid, if i had it to do over id never have done it in the first place )

My house will be paid off in about 10 years ( bought my house late in life ), and other little stuff will be gone but the overall picture unless some of my projects hit it big, i don't foresee a total debt free life.

Student debt, but I just graduated in May and already have half of it paid off. Some credit card debt from a dumb purchase I made in China when I missed a zero (not kidding). That is on a newer card that doesn't have interest yet so I'll pay it off soon but I'm not in a rush.

Other than that, I will use credit cards every once in awhile but I should be debt-free within a year (a few months if you don't include student loans) and won't be in debt again until my first housing purchase.

Debt free except for my mortgage. Its a 20 year mortgage at a good rate, but once we get a little more of an emergency fund saved up and a replacement car for the wife we will start extra payments on the mortgage. I hope to have the mortgage house paid off in 12 years.

One of my favorite subjects Todd.

I haven't had any debt in a number of years. I took out a car loan about 5 years back, just didn't have the scratch laying around and had to have something QUICK. It was only $3000 for a low mileage Monte Carlo. I hated that car. Paid it off in a few months. I have a mortgage, which likely will never be paid off. Not because I don't want to, just that my interest rate sucks, I hate the house and I likely will just buy something in cash in the next few years. Hopefully have a paid for house before the age of 35. That is my goal at least.

As a lad though, I was taught virtually nothing about money. Being great at math, I thought I would be just fine. Boy was I wrong. BIG TIME. I wracked up a few grand in debt at around age 19. Had just gotten a decent raise and promotion. Was moving out. Just graduated high school, late starter. Mother was getting a divorce and needed some things. UGH. Hind site and all. I paid it all off by 25 or so and have done fine since. Got some savings working, which are actually down after purchasing my last car in cash. 15% to ROTH 401k with 6% matching. Save another 27% after taxes and 401K for just savings. Picked up a roommate, which sucks and he needs to go soon, so that money gets saved. I REALLY need to get more in line with a budget. I waste money like no-one's business. Weekend road trips. Stupid purchases. Bar tabs. Dates. Just wasteful and if I could get that under control I would really be kicking ass financially.

Regarding getting out of debt. I am a Dave Ramsey fan. He suggest making all minimums and paying the smallest debts down first creating a "debt snowball". This helps motivate people, though is possibly not always the cheapest and fastest solution. That requires a bit of math and knowledge of interest to figure out. He doesn't recommend this way because people get more easily discouraged. Typically people aren't super awesome at math, at least not as good as the they they are, or they wouldn't likely be in a bunch of unsecured debt to begin with.

Best thing I could tell ANYONE who is just working. Save 50% of your take home. PERIOD. Learn to live off that and you will have no money problems EVER in life. There is no reason to ever assume any debt ever. I heard Monkeyman talking about how people can't afford to drop $20,000 on a motorcycle. That is just absurd. People can and do all the time. People who finance just make a decision not to. Simple as that. I've bought plenty of cars in cash. As well as a motorcycle.

As soon as I unload my car I am either going to buy a Lotus or start shopping for some land to build a home on. I want to be moved out of this home within about 3 years. I've considered renting it, but it is probably only worth about $1000/month to rent and people that rent in that price range typically don't have asserts for me to sue them for if there are damages when they move out. My cousin and his family would love the place, but I can't be getting mixed up in transactions like that, also they don't have a great track record of taking care of things.

Things I suggest to invest in.
1. Cash reserves. At least 3-6 months worth of expenses.
2. Max out the employer matching at your company if available. If they offer 50% up to 12% make sure you invest 12%. Otherwise you are just throwing away that other 6% of "free" money.
3. Max out your 401k each year, unless you make more than $112,000 which sucks ass that you can't contribute anymore. I suggest ROTH as it is tax deferred. Traditional only nets a tax break up to $68,000 a year and has diminishing benefits up to that number.
4. Get some more cash saved up. 1 year supply is ideal.
5. Get your home paid off. Paying a bit extra every month really ads up. You can knock down a 15 or 30 year note in no time by tossing your bonuses or over-time onto that balance.
6. If you see a good deal on something that retains value or can be immediately flipped. BUY it. Guns are great for this. Ammunition isn't so bad either. I'd like to get into precious metals, but that is really something that can be volatile and I don't think is for the novice or someone with limited funds available. I know people that thing musical instruments are good too, but I don't agree. Those are often sold for under value when in a pinch. Also if you don't play, it is really a useless investment for you where as a gun can ALWAYS be sold, traded, or just a tool for protection.

Seriously though. I wish I would have been taught anything about money as a child. This would have made my life INFINITELY easier.

You've got to be kidding. I'm so poor, I can't afford to pay attention.

Currently only mortgage debt, 6 of them. I had long ago built a stupid amount of credit card debt where my interest payment was almost $600. I was doing good with the credit card, only buying what I could afford to pay off before the billing period when I was dumped by a girl( you know the type of girl guys, that last one that you would ever date, you still love her today). I was devastated and tried to spend, party, and F- my way back to happiness. I did a 401K loan to myself to where I could budget to pay the balance off in a year. I ate lots of cup of noddles and peanut butter sandwiches (90% of my meals), until I had it paid off. Other than that time, I had a interest occurring balance on a credit card maybe 10 times.

Like most Americans, yes. But (big little word), it's only mortgage (paid off in 5 years), and a few thou on credit cards (yes, I'm stupid). Took a Dave Ramsey course, didn't help. I'm still stupid.

A mortgage and home equity loan (I bought a car) the interest on both are tax deductible. Two credit cards which I stopped using and am paying off. No other long term debt or short term debt.

Yeah... paid off the car earlier this year, financed the bike in order to continue building credit history as I didn't have any when I bought the Mazda and my credit score isn't high enough to reach my satisfaction yet. The money saved on interest alone from nixing the car payment is more than the monthly bill for the Ape. I won't do credit cards as I've read too many horror stories and talked to too many people that got totally screwed on those. I'll likely be selling another car soon enough as it was paid for in cash and I can get the same out of it since it was such a stupid cheap purchase to begin with.

Next debt- mortgage.

quote Originally posted by skuzzbomer: Yeah... paid off the car earlier this year, financed the bike in order to continue building credit history as I didn't have any when I bought the Mazda and my credit score isn't high enough to reach my satisfaction yet. The money saved on interest alone from nixing the car payment is more than the monthly bill for the Ape. I won't do credit cards as I've read too many horror stories and talked to too many people that got totally screwed on those. I'll likely be selling another car soon enough as it was paid for in cash and I can get the same out of it since it was such a stupid cheap purchase to begin with. Next debt- mortgage.

Why do you think you need credit? You can buy a house without credit. It is just a number that shows that you like/can incur debt.

Aside from that. Credit cards are AWESOME useful. 2% cash back on all purchases. I use them for business and personal. Let me give you a scenario.

$1000 is what you bring home monthly. You deposit this into your account. Mine earn 3.75% APR currently.
I leave this money in there all month and it earns $3.13 per month.
I spend all $1000 per month using my credit card.
This earns 2% cash back on all purchases, so $20 a month.
I pay the credit card off in full every month. 0% finance and interest charges and no annual fee. I've now earned $23.13 a month in interest. Or about $275 a year. If your household liabilites are $2000 a month, double these number. I personally am going to spend the money each month. Why not let it work for you. Also note that bank APR applies to all your available funds up to $25,000 at my credit union. On business purchases alone I earned around $2400 last year. I earn about $250 a year on my personal credit card, plus my interest in my financial institution. Wish i could pay my house payment with credit card.

Nothing but the tax man at the end of the year for property taxes unless something else happens, I will never take another loan out, I hate owning money. we might do an equity loan for a tractor for the farm but that is a tool to save time and will pay that off as quick as possible.

Steve

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Technology is great when it works,
and one big pain in the ass when it doesn't



Detroit iron rules all the rest are just toys.

Lot of really good responses! Sucks to see that so many people are in debt. Being in debt can really be a huge burden on the person. It's so easy to get into debt because you think you can just pay it off later. Even though I still stress about a lot of things, it's nice that I FINALLY don't have to stress about that.

I will say that even with all of the great financial teaching my dad gave me, I still screwed up. My dad was always very financially responsible. He only spent money on us if it was something my mom kind of forced him into, or he felt it would be educational for us. He always drove boring but durable cars (only Volvo 240s through the first 16 years of my life). He would even shop around for 6 months before he bought a brand new wheel barrow. I still wish I could be more like he is in terms of financial responsibility, but hopefully I can continue to work there.

I just went through my closet and put a bunch of dumb stuff up on eBay that I know I don't use anymore... all I want to do now is increase that number in my bank account! hehe...

quote Originally posted by 82-T/A [At Work]: He would even shop around for 6 months before he bought a brand new wheel barrow. I still wish I could be more like he is in terms of financial responsibility, but hopefully I can continue to work there.

he spent more driving around looking for the cheapest one than he would have to just by the one closest, but you can't tell cheap people that they won't believe you.

Stay where you are, you have a job. that right there is a plus in todays economy.

Steve

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Technology is great when it works,
and one big pain in the ass when it doesn't



Detroit iron rules all the rest are just toys.

quote Originally posted by ls3mach: Seriously though. I wish I would have been taught anything about money as a child. This would have made my life INFINITELY easier.

Amen.

quote Originally posted by 84fiero123: he spent more driving around looking for the cheapest one than he would have to just by the one closest, but you can't tell cheap people that they won't believe you. Stay where you are, you have a job. that right there is a plus in todays economy. Steve

To be clear, my dad was NOT "cheap"... he spared no expense giving me the best education money could buy... and providing me with any educational tool that I needed or wanted.

But by shopping around, I mean he would read the paper and wait for it to go on sale before he'd buy something.

He was just very frugal... only spent money on things that he needed. If it wasn't for my mom, he probably would never spend any money on himself.

quote Originally posted by 84fiero123: he spent more driving around looking for the cheapest one than he would have to just by the one closest, but you can't tell cheap people that they won't believe you. Stay where you are, you have a job. that right there is a plus in todays economy. Steve

Have family members that drive to five different store to get the best price
makes no sense when most of them price match. A 20 mile drive to save $2

The other one is the fuel points our local grocer rewards you with for every $100
you spend, you get .10cents per gallon off your gas..... Spend $100 get .10 cent per gallon
10 cent X 20 gallon tank - you saved : $2.00 on 1 tank of gas

[This message has been edited by jmclemore (edited 08-21-2013).]

I owe for my home and my car. I will owe on my home for many many years to come. The car is almost paid for.

Retired, no debt of any kind (including no mortgage) since 1992 / age 35. Paid for college / weddings for my now grown children.

quote Originally posted by FrugalFiero: Retired, no debt of any kind (including no mortgage) since 1992 / age 35. Paid for college / weddings for my now grown children.

Was hoping you'd chime in. Looking at that goal myself. Sans the weddings.

Debt free since 1997...the only way to live.

Last car payment: 1989
Last mortgage payment: 1997

Don't even have a single credit card.

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quote Originally posted by 8Ball: I owe for my home and my car. I will owe on my home for many many years to come. The car is almost paid for.

House and suv, I'm in a similar position "currently have a pile of medical bills"
But we have decided to roll the SUV payment into the mortgage to start eating
at the principle until we have to replace the SUV.

Like others I have debt butI have "good" debt in that it is a mortgage. I only pay the scheduled payments on the mortgage, no more. While I could pay more on the mortgage or even pay it off I plan to keep the loan for the life the remaining 14 years of the 15 years. I am at 2.875% on the mortgage. I won't pay more since I feel I can get a higher rate of return from investments than the rate on my mortgage. I am not talking about "risky" investments but sound investments such as blue chip stocks which pay good dividends.

3 years left on the house. No other personal debt. I use credit cards through out the month and pay the off when the bill comes. I do have 2 rental properties with mortgages, but they generate a nice income, and I have them listed as an LLC.

Pretty much so for me. I have a few outstanding ones, but nothing I couldnt pay off out of my bank accounts if I had to.

quote Originally posted by Hank is Here: Like others I have debt butI have "good" debt in that it is a mortgage. I only pay the scheduled payments on the mortgage, no more. While I could pay more on the mortgage or even pay it off I plan to keep the loan for the life the remaining 14 years of the 15 years. I am at 2.875% on the mortgage. I won't pay more since I feel I can get a higher rate of return from investments than the rate on my mortgage. I am not talking about "risky" investments but sound investments such as blue chip stocks which pay good dividends.

1. Where did you get that interest rate? I'd like to look into getting a similar rate.
2. Interest on a home loan is paid first, how much in dividends are these blue chips paying? I don't know any of your specifics, but mathematically that might not be a sound theory. Just curious if you can give some examples of how this is working, don't need your specific numbers.

quote Originally posted by jmclemore: The other one is the fuel points our local grocer rewards you with for every $100 you spend, you get .10cents per gallon off your gas..... Spend $100 get .10 cent per gallon 10 cent X 20 gallon tank - you saved : $2.00 on 1 tank of gas

I use this for many gas purchases. The store I use also has special items by one and get $0.05/gallon off. Yesterday I paid $3.11/gallon at the Shell station using a $0.31/gal discount. The best I've done is getting $1.25/gal discount. Groupon has had programs $10 of gas for $4 gift card.

I see those myself. Most cars now have less than 15 gal gas tanks. So you save 10 cents a gallon. That means you fill up your car at best for $1.50 savings. Thats barely a quart of free gasoline. Big families that spend hundreds of dollars a week might save a bit, but only for one car. I use mine to fill up the motorhome so I get a free gallon...because it only allows you the discount on a maximum of 35 gallons. For now, my store gives double points for Friday thru Sunday purchases, so I can get a little more.

Another trick is to plan for the best method of making large purchases. Say you are going to spend $100 at LOWES. Go to Kroger and buy a LOWES gift car, so you get the gas savings with that purchase, use a card that gives you cash back (or U-promise savings) to purchase the LOWES gift card, then use a coupon and the gift card for your lowes purchase. When you use your gas savings, take 2 vehicles and fill them up back to back w/o hanging up the nozzle, and pay for the fuel with a card that also gives you cash back. So by planning the purchase right, you can get nearly $105-$115 worth of value from the $100 you needed/were going to spend anyway. Every little bit helps.

As for debt, we have the house mortgage and my wife's student loan. We do use our cards for most purchases (for cash back and U-promise savings) but pay them off at the end of the month. We also try to keep our monthly bills at a minumim: basic cell phones with no contract, base satellite TV service, A/C and water heater wired for remote shutoff by the power company, we carry $1000 deductable for our automotive/home owners insurance, our daughters pack their lunch to school, and we eat out as a family only on special occasions.

quote Originally posted by deceler8: Don't even have a single credit card.

Given their convenience and protection when (not if) you get ripped off, I have credit cards, but I pay them off monthly & use the cards to my advantage, not the other way around.

I've picked up alot of useful gadgets & cash back from credit card "rewards" programs.

If a person has even the slightest "lack of willpower" trait, no credit cards & cash is the only way to go.