Debt Free Definition

AngusS

We changed last year from two cars to one car, and reading through the replies, I rekon we will work on paying down the finance and HOLDING on to the one car we have, it does make more sense. Big savings by ditching one of the cars by the way !

silkglade

Al_Mac wrote: »

Debt free is no debt to anyone.

I would exclude mortgage, if I had one, as I don't see that as a debt, but an investment.

I would also exclude 0% credit cards, if the money is in a savings account.

Hi everyone :hello:

I have to say I totally agree with this coment, and I think some of you have misunderstood the meaning given.

The way I read it is that a morgage is NOT a debt, more of an investment.

Then the other comment that is totally seperate stating that any and all 0% credit cards with outstanding balances and within their 0% period should also be discounted as debt if you have the cash sitting in a savings account (and earning interest) until the end of the 0% and then you can pay off the balance in full before any interest is incurred. (how to have your cake and eat it :rotfl: )

Snaggles

My car is 12 years old so I own it outright now (bought on horrendous 24% apr finance before light bulb moment but paid it off years ago).

Hubby's car is newer, bought with a loan at 6.1% apr - we took the loan over 5 years to keep the repayments low, but in actual fact we will pay it off in about 12 months (3 years early!). That's the only unsecured debt we have though, everything else has been repaid.

LJD1_2

Our car is about 9 years old. We sold our newer car (still 7 years old) to become debt free and will now save for our next car. We're hoping this one will last at least another 2 years but will keep it until it's no longer financially viable. Then we'll buy a new (to us) car with the money we've saved. We won't take finance.

Going back to the mortgage: I don't despute the mortgage is obvious debt and it will be paid off asap now the credit card debt has gone. I guess I just see the mortgage as 'acceptable' debt for me personally xx

cat4772

My idea of debt is owing money - pure and simple.

My mortgage is a debt because I borrowed it from the bank on the understanding that I would repay it! I would also class 0% credit cards as a debt because it's still money that's owed (even if you have stoozed the money into a savings account), you'd still owe the CC company what you borrowed.

meme_3

I would say that debt free is owing nothing at all.

That includes the mortgage - it's the biggest debt most of us will usually have.

However, it is overpowering problem debts, including credit cards and loans that bring most people to this board, I think, so this is the focus of most discussions.

Others would, I guess, go straight to MFW board. These people don't appear to have a problem as they are generally increasing their payments not looking to decrease their outgoings.

I could, of course, be wrong. It wouldn't be the first time.

SarahNeedle1872

For me, debt free is owing no money to anyone.... so that I can afford to get a mortgage!!! My DFW aim is to be able to become a MFW!!!

Hope that makes sense!?!

Sarah x

Kaz2904

I do class my mortgage as debt but I class it as an acceptable debt because if I didn't have a mortgage I would have to pay rent. This doesn't mean that I don't want to see the back of it and I am desperately trying to clear it. My children are small now and I want it gone in time to pay for them to go to university or do whatever they want to do.
If I still had to pay a mortgage by the time they were at uni then we would get into debt because we can't earn any more and cannot run 2 maybe 3 households from our budget. I want to be in a position where my kids don't have to start out with horrifying debts hanging over their heads or not go to university (if they are capable of it) if that is what they want to do.

southernscouser

Al_Mac wrote: »

I would also exclude 0% credit cards, if the money is in a savings account.

But if you owe someone money are you not in debt to them?

silkglade

southernscouser wrote: »

But if you owe someone money are you not in debt to them?

I would say yes it is debt, but if you have the money sitting in a nice little savings account earning interest for the duration of the 0% I think I would still class myself as "Debt Free"

I would also make sure that I completly clear it as the 0% ran out.

I think it is no different to monthly spending using a credit card and clearing the balance every month. (which is what we will start doing next month :T)