What is debt free?

shoe_gal_84

I've been coming on here for quite a few years on and off and I am FINALLY getting towards being debt free.

Now I'm so close, I'm wondering whether I am actually there. I have a student loan and a mortgage, and haven't been counting either of these as part of my debt. What does everyone else do?

Excluding these 2 things, I have just £1050 left on a credit card, of which I am paying off £350 a month. So I'll have no 'debts' as of the end of September!!!

Then I just had a though as to whether I was cheating myself because of the student loan and mortgage

cherylim

To me, 'debt free' doesn't include a student loan or mortgage.

I don't have a mortgage myself - I do have a student loan. It can never be paid off - I know technically it's 'debt', but not as far as I'm concerned. It will continually be taken from my pay, but never cleared until it's eventually written off.

billinghamfan

I think you are right not to count your mortgage and student loan as debts.

Your student loan interest is very low and this will come directly out of your wages and unless you have a different loan to me if you don't work you don't have to pay.

Your mortgage is such a loan term debt and your house is unlikely to be reduced in value (in the long term).

Therefore you should have cause to celebrate in september!!

MummyDrusilla

I'm the same. I don't count student loan or mortgage. I don't have any control over the student loan on a day to day basis and if it gets paid off, great. If not, it's not the end of the world and won't count detrimentally to me and my financial future (or so I am led to believe).

As for the mortgage, we're on interest only currently with no scope to go to repayment until a couple of years more debt-busting. Unfortunately loans, cc's and overdrafts take priority as they're costing us more out of our take home pay which is more pertinent to us than replaying the mortgage right now. Once those have gone, we will concentrate on more long-term debt-busting and savings goals.

Moneymash

I am the same I don't count my student loan. As I don't earn enough to pay it off ( I don't know that I will in the foreseable future as even though I get pay rises each year they raise the threshold of the minimum earnings needed to trigger payment).

When I have become what I consider 'debt-free' that is when I have cleared my loan, CC's, OD, and default. I will pay them off at an amount I can afford.

I don't have a mortgage, therefore I am not sure if I would consider this a debt. However, judging by the number of mortgage free wannabies on this site, people are now thinking of it as a debt, I suppose you could be doing other things with the money you will pay in interest over the years. The Americans and Australians have the mindset to clear their mortgages as soon as possible and it is starting to take hold in this country.

unimaginative_user_name

I agree with the above. To me a student loan is a bit like tax or national insurance contributions, more of a deduction from gross salary than a tax. A mortgage is the only way that most people can realistically buy their own home. You could almost see it as rent with the difference that if you pay it long enough you get to keep your home!

Perhaps the only exception to this is mortgage arrears.

Well done by the way on getting so close to clearing your debts. I've been lurking on the debt-free wannabe forum for a while now and I've been so inspired by the determination of people like you. :T:T

Niv

Well my student loan repayments did not come directly out of my pay so it looked like any other bill coming from my current account. I do concider my mortgage and student loan (now paid off :T) debts, but I consider them 'soft' debt. I currently have a mortgage and while I am not fanatical about paying it off (ala some of the mortgage free wannabe types - no offence intended) I do count down the months that this will be paid off.

Dont forget some people have used their mortgage to consolidate their debts of old so to not think of it as a debt in those cases is hiding from the truth imo.

However on a more simplistic level of 'Am I debt free' I would consider your answer to be 'pretty much'.

Niv

shoe_gal_84

Thanks everyone, that was the answer I had been secretly hoping for.

Roll on September :-)

HeadAboveWater

Woohoo! Go you!!

BluePumpkin

Congratulations on having the end in sight! :j

I count my student loan as graduate tax, in my head it goes in the same category as NI and tax payments from my wage

jumperjohn

I have a mortgage and student loan too. I also regard my car lease as a 'good debt' as I see this as a utility. Other then that cards, loans and other credit isn't too good as it can, as I'm sure you know, impede on quality of life. I cleared cards a while ago now and the student loan, car and mortgage is all the debt I need.