Debt Free Definition

Softstuff

For me it's until my mortgage is gone, that'll be when I breathe a sigh of relief. See, for me it's about what would happen if OH or I weren't working... and without a mortgage we'd be fine, but with one we'd be stuffed.

LJD1_2

I consider myself debt free as i've paid off all loans, credit cards etc. However I still have a mortgage which i'm trying to pay off now. Although that is a debt i've something to show for it at the end and it's not a debt that gives me sleepless nights and causes me to worry - it just gets me mad that I pay so much interest! Lol!

Tootie_Fruity

It's interesting that most people don't consider a mortgage a debt. Would you consider a mortgage a debt if you lost your job and couldn't pay it or if the property market crashed and the mortgage far exceeded the value of the property ?

Frugal_Fox

For me its about paying off all my credit debt. Things like the store card, credit cards and overdrafts, plus our secured loan. I do not count the mortgage - although when I am 'debt free' this will become priority to overpay on to reduce asap. Personally I don't include car finance as we have agreed (between DH & me) that this is something we won't include. We don't have a big flash car by any means - but we did shop around and get the best deal we could when we had to replace our car.

Snaggles

I do consider my mortgage a debt....because it basically is....but I will still class myself as debt free when I have no unsecured borrowing. So that's a complete contradiction isn't it...lol!

Frugal_Fox

Tootie_Fruity wrote: »

It's interesting that most people don't consider a mortgage a debt. Would you consider a mortgage a debt if you lost your job and couldn't pay it or if the property market crashed and the mortgage far exceeded the value of the property ?

Its not that I don't see it as a debt - clearly it is .

However its an asset, and yes, if it all went belly up selling the house would clear our mortgage - all bar the worst crash ever. However, when I arrived on these boards I was looking to sell our house to clear all our debts and start again. I believe I was diagnosed with 'debt fatigue'. Now we do all we can to clear our debts, plus we are saving for a holiday in Oz next year when we will be debt free, and we are keeping the house!

My mortgage is a debt and will be paid off before its 'due date' however, my first goal is to clear all the other stupid debt!

fistfullofdollars

I think of it as credit card/unsecured loan debt.

I dont include our mortgage.

I also dont include my student loan. I see that as paying more NI etc as that will be paid off over my working life. I do this becuase its not (at the moment) provided by a bank and its not on your credit file.

AngusS

Thanks loads to all of you for the replies, very interesting debate.

I wonder about the true practicalities of being completely DEBT FREE ?
For instance, perhaps you have paid off your mortgage etc etc, but you still require transport in the way of a car. Cars are a major expense these days and are like pouring your money down a drain. If like me though you need a car due to location then you need to finance it somehow, as some of you have said buying a car outright is not easy.

Interesting to know how some of U finance your vehicles ?

smudgemanc26

AngusS wrote: »

Thanks loads to all of you for the replies, very interesting debate.

I wonder about the true practicalities of being completely DEBT FREE ?
For instance, perhaps you have paid off your mortgage etc etc, but you still require transport in the way of a car. Cars are a major expense these days and are like pouring your money down a drain. If like me though you need a car due to location then you need to finance it somehow, as some of you have said buying a car outright is not easy.

Interesting to know how some of U finance your vehicles ?

Its funny you should ask that question i was only thinking about that one this morning. Lucily for me i have bought my car outright with some money i had, the little bit of shortfall was funded by my dad who i pay back each month, this has worked out great cos he wanted to contribute to it and has because i dont need to pay back interest on a silly APR to the car company or on a loan therefore he has helped me a great deal and im very thankful for that.

My car will need renewing in about 2 years as i only got it last year so hopefully i will be debt free this year i am going to put so much a month away into savings and start a car fund so when the time comes when i need a new car i can pay for it outright without having to borrow or get into debt.

Unfortunately i was involved in a crash too it was the other parties fault and they drove off and left me. Luckily they have been traced and i can claim compensation so any offer i get from this will also go towards the car fund.

I dont intend to buy anything flash just a little run around which will get me from A to B. I dont see the point or understand people who rack up loads of debt just to be seen in the latest model or super fast car - whats the point?

I know one thing its gonna give me great satisfaction to walk in and get a car and when they ask how im going to pay i'll be able to say i'll pay for it all right now thanks.:T

Softstuff

AngusS wrote: »

I wonder about the true practicalities of being completely DEBT FREE ?
For instance, perhaps you have paid off your mortgage etc etc, but you still require transport in the way of a car. Cars are a major expense these days and are like pouring your money down a drain. If like me though you need a car due to location then you need to finance it somehow, as some of you have said buying a car outright is not easy.

Interesting to know how some of U finance your vehicles ?

It's a simple answer for us, until we're mortgage free our current car has to keep on running! We don't have a car each, we have 1 which means my OH ferries me to and from work. Once we're mortgage free and not having to pay it, if we can wait about 6 months we'll have enough for a very nice car, second hand.

I can't really imagine anything being so unrepairable that that plan would alter.

I once had a new car on finance, that was a huge mistake. Our mortgage is the last time we'll pay anyone interest for borrowing money.