What situation do you consider "debt free"?

pevila

I was talking with DH last night and I said we were debt free. He said we're not debt free since we have a mortgage. We have no credit card debt, our cars were bought in cash, everything gets paid at the end of the month. I considered that to be "debt free" because most people I know buy their homes with a motgage. What do you think? If you have a mortgage, but no other debts are you still "debt free"?

catycate

If the only debt we had was a mortgage, I'd do a happy dance and call it princess. I think only having a mortgage is pretty darn close to debt free.

pevila

hibiscus29:

I guess we're not technically "debt free," but i kind of think like you do.  The only thing we owe on is our house, and that is almost paid for.  I pretty much consider us debt free.

Well, we have quite a few years to go, but most people have a mortgage or rent, so those payments feel more like an "expense"

pevila

catycate:

If the only debt we had was a mortgage, I'd do a happy dance and call it princess. I think only having a mortgage is pretty darn close to debt free.

I know we're lucky! Our IVF took a big chunk of our savings, so until we don't get those back up we're keeping our lives simpler than before

hayleydeee

I know a lot of people consider themselves debt free if they only have so called "good debt" (mortgage and student loans).  But personally, I feel like any debt is dept. So, I've never felt comfortable saying I'm debt free because I've always at least had those things. 

That, and the fact that our last mortgage lost us about 200k in two years! So I don't see how that could possibly be a "good" debt : ) 

laurakaz13

Our only debt is our mortgage as well, and I do consider that debt free.  Our house is worth much more than we owe, so I would actually consider us way above water. 

Que*Syrah

Reasonable mortgages, student and car loans to me are totally normal.  It's very hard to buy houses, cars and college educations with cash.

We are renters so we're 100% debt-free, but that doesn't make us any better than someone who only has a mortgage because at least they have their own home!

pevila

laurakaz13:

Our only debt is our mortgage as well, and I do consider that debt free.  Our house is worth much more than we owe, so I would actually consider us way above water. 

Good point! Our apartment is worth 3 times our mortgage (we bought it extremely cheap and prices have doubled in Peru since we bought it), so if we sell it we could buy another apartment without a mortgage (of course a smaller (but still nice) one). That's what we're trying to do, but I don't think anyone will buy our apartment as long as there is a construction site right in front of our building until December. Since some posters agree with me, I'll go do the I Told You So dance to DH, Gangnam style...

pevila

Que_Syrah:

We are renters so we're 100% debt-free, but that doesn't make us any better than someone who only has a mortgage because at least they have their own home!

I think that depends on the market! If you bought a house and now you owe more than it's worth, it's better to be a renter. But the housing market goes up and down, so owning a home might make sense, even if right now it's worth less than what you paid. These are uncertain times in the USA, from what I have read :S

pastalady

Our only debt is our mortgage. Our home is worth about $400,000, our mortgage is 225,000. I do not consider us to be debt-free even though we have no other debt. Even good debt is debt to me.

The only number I look at is what is our net worth? To me as long as that number goes up every year it is all good lol!

vintagejjane

We consider debt free not owing anyone money, including if we were to get a mortgage. We don't have any credit cards and pay only with cash. My husband's goal is to buy a house cash next year.

FormerlyKrista555

Even Dave Ramsey ( www.daveramsey.com )  says that mortgages fall into a different debt category... as in... pay off all of your other debts first and save the mortgage for last.

 

FormerlyKrista555

Que_Syrah:

Reasonable mortgages, student and car loans to me are totally normal.  It's very hard to buy houses, cars and college educations with cash.

We are renters so we're 100% debt-free, but that doesn't make us any better than someone who only has a mortgage because at least they have their own home!

I agree, except for cars.  I think financing cars is always a bad idea when you look at it from a financial perspective. Your car will not gain in value. A home will (usually. I know some things have changed since 2007).  If a person, say when they turned 16,  bought a cash car and then saved money until the first car broke down... sold it and combined that with his cash... he'd buy a better car and so on and so on.  Eventually a person would be buying cash cars that are new or close to new.   We have 3 reliable vehicles that we bought with cash. 

 But,you should also know  I've also been Dave Ramsey brainwashed. LOL

kcisthebombdotcom

We are also debt free besides a mortgage, and I say we're debt free besides our mortgage.

I think truly debt free is having zero debt including a mortgage payment. Any debt =/= truly debt free.

Rebecca2024

Our only debt is our mortgage.

I say we still have debt.  My husband says we're debt free.
(FWIW, I do the budgeting and tracking of money...)

It doesn't generally come up in everyday type conversations with people, so I don't too much care what he has to say about it.  I'll keep on writing the check to the mortgage company...

MrsNole

pevilallonga:

I was talking with DH last night and I said we were debt free. He said we're not debt free since we have a mortgage. We have no credit card debt, our cars were bought in cash, everything gets paid at the end of the month. I considered that to be "debt free" because most people I know buy their homes with a motgage. What do you think? If you have a mortgage, but no other debts are you still "debt free"?

I agree with you.  I'd consider that "debt-free". Congrats to you btw!

hjk5000

We're in the same situation other than the last chunk of my student loans. Once we're down to just a mortgage I'd consider us debt free.

Congrats BTW, that's pretty awesome!

vlagrl29

there is good debt and bad debt.  I would consider you are debt free because your home is a good thing to invest in.  We are almost debt free.  We have about $2500 left in medical bills to pay off and then the coast is clear:)  we have been working on it.  Then the only debt we have is my school loan which I also consider good debt.  Our house is paid off

shortstuff15

FormerlyKrista555:

Que_Syrah:

Reasonable mortgages, student and car loans to me are totally normal.  It's very hard to buy houses, cars and college educations with cash.

We are renters so we're 100% debt-free, but that doesn't make us any better than someone who only has a mortgage because at least they have their own home!

I agree, except for cars.  I think financing cars is always a bad idea when you look at it from a financial perspective. Your car will not gain in value. A home will (usually. I know some things have changed since 2007).  If a person, say when they turned 16,  bought a cash car and then saved money until the first car broke down... sold it and combined that with his cash... he'd buy a better car and so on and so on.  Eventually a person would be buying cash cars that are new or close to new.   We have 3 reliable vehicles that we bought with cash. 

 But,you should also know  I've also been Dave Ramsey brainwashed. LOL

I agree except that I don't even view student loans as good debt.  The only debt I veiw as good is a mortgage.  Student loans often have crazy interest rates and more often then not the person doesn't make enough in the chosen career after graduation to pay off those debts at a fast rate.  Keep in mind that I am in Canada so our views on post-secondary education are a bit different, but I know many people who have graduated college/university with their masters or higher debt free.  It takes work, but I know that it can be done.

Vehicle debt is always bad debt.  I refused to buy our new to us (only 4 years old) vehicle until we had the cash for it.  Granted we were lucky in that when we got married we both had houses so once mine sold, we had the cash for the vehicle we currently have.  We did go into debt for a holiday trailer this summer, which I also view as bad debt but sometimes you have to conceed for a husband's sanity.  We are working to pay that off in 5 years though and then we will be putting aside for another new vehicle.  Until then though, we are buying used for my husbands get-to-work vehicle.  Our car only has a couple more years on it, so then we will be looking for a used vehicle to get us through until we can buy new.

Andrewsgal

EmilyVReese80:

Easy, you're debt free except the house :

Yep. I only consider mortgage a good debt, not student loans or car loans.

Mama-Bear

We'll be debt free when we have absolutely NO debt at all. 

ToBeMrsT

EmilyVReese80:

Easy, you're debt free except the house :

yep this 

StephNJer

Like you, the only debt we have is our mortgage. No car payments, no credit card debt or student loans. I guess technically we are not debt free since we have a mortgage, but I say we are debt free. I feel like not having any student loans, car payments, credit card debt in this world is pretty darn good so I feel justified to say we are debt free.

nosoup4u

dhviel:

FormerlyKrista555:

Que_Syrah:

I agree except that I don't even view student loans as good debt.  The only debt I veiw as good is a mortgage.  Student loans often have crazy interest rates and more often then not the person doesn't make enough in the chosen career after graduation to pay off those debts at a fast rate.  Keep in mind that I am in Canada so our views on post-secondary education are a bit different, but I know many people who have graduated college/university with their masters or higher debt free.  It takes work, but I know that it can be done.

Are you talking about US or Canadian student loans? Because it's virtually impossible to graduate in the US without some sort of student loans these days. But the alternative (not getting a degree) isn't better.

Most of the people who I know who have Masters have been able to make more money after getting their degree, and haven't been put in insane debt for it.

FWIW, we rent right now, paid for our car in cash, so our only debt is my student loan (which we're taking our sweet time paying back - the horror!). 

Andrewsgal

nosoup4u:

dhviel:

FormerlyKrista555:

Que_Syrah:

I agree except that I don't even view student loans as good debt.  The only debt I veiw as good is a mortgage.  Student loans often have crazy interest rates and more often then not the person doesn't make enough in the chosen career after graduation to pay off those debts at a fast rate.  Keep in mind that I am in Canada so our views on post-secondary education are a bit different, but I know many people who have graduated college/university with their masters or higher debt free.  It takes work, but I know that it can be done.

Are you talking about US or Canadian student loans? Because it's virtually impossible to graduate in the US without some sort of student loans these days. But the alternative (not getting a degree) isn't better.

Most of the people who I know who have Masters have been able to make more money after getting their degree, and haven't been put in insane debt for it.

FWIW, we rent right now, paid for our car in cash, so our only debt is my student loan (which we're taking our sweet time paying back - the horror!). 

I totally disagree. I have four friends that worked their way through school. They all lived at home, and two started off at a jr college, but it can and is done.

saywhut82

I use to work in the debt industry and the mortgage industry....you are considered "debt free" when you have 0...ZERO dollars owed to anyone except your savings account. 

That means, no mortgage, car note, student loans, credit card bills, nada except for monthly bills such as utilities.   

saywhut82

Andrewsgal:

nosoup4u:

dhviel:

FormerlyKrista555:

Que_Syrah:

I agree except that I don't even view student loans as good debt.  The only debt I veiw as good is a mortgage.  Student loans often have crazy interest rates and more often then not the person doesn't make enough in the chosen career after graduation to pay off those debts at a fast rate.  Keep in mind that I am in Canada so our views on post-secondary education are a bit different, but I know many people who have graduated college/university with their masters or higher debt free.  It takes work, but I know that it can be done.

Are you talking about US or Canadian student loans? Because it's virtually impossible to graduate in the US without some sort of student loans these days. But the alternative (not getting a degree) isn't better.

Most of the people who I know who have Masters have been able to make more money after getting their degree, and haven't been put in insane debt for it.

FWIW, we rent right now, paid for our car in cash, so our only debt is my student loan (which we're taking our sweet time paying back - the horror!). 

I totally disagree. I have four friends that worked their way through school. They all lived at home, and two started off at a jr college, but it can and is done.

 

I agree with you Andrewsgal...it is not impossible to go to school without taking out student loans.

There are thousands of scholarships available for students that are never used because those students are too lazy to put in the time and work to get them. Also, I know tons of students who've worked their way through college (me being one of them) without having to take out a student loan to pay for school. Granted...it has taken me longer than someone who got a loan, but at least I don't owe anyone for my bachelor's degree except for myself. Also, I appreciate my degree 500% more than the average person because I made sacrifices to pay for school so I could get my degree.  

vlagrl29

saywhut82:

I use to work in the debt industry and the mortgage industry....you are considered "debt free" when you have 0...ZERO dollars owed to anyone except your savings account. 

That means, no mortgage, car note, student loans, credit card bills, nada except for monthly bills such as utilities.   

In that sense, none of us will be debt free until we are retired and old.  LOL 

shortstuff15

saywhut82:

Andrewsgal:

nosoup4u:

dhviel:

FormerlyKrista555:

Que_Syrah:

I agree except that I don't even view student loans as good debt.  The only debt I veiw as good is a mortgage.  Student loans often have crazy interest rates and more often then not the person doesn't make enough in the chosen career after graduation to pay off those debts at a fast rate.  Keep in mind that I am in Canada so our views on post-secondary education are a bit different, but I know many people who have graduated college/university with their masters or higher debt free.  It takes work, but I know that it can be done.

Are you talking about US or Canadian student loans? Because it's virtually impossible to graduate in the US without some sort of student loans these days. But the alternative (not getting a degree) isn't better.

Most of the people who I know who have Masters have been able to make more money after getting their degree, and haven't been put in insane debt for it.

FWIW, we rent right now, paid for our car in cash, so our only debt is my student loan (which we're taking our sweet time paying back - the horror!). 

I totally disagree. I have four friends that worked their way through school. They all lived at home, and two started off at a jr college, but it can and is done.

 

I agree with you Andrewsgal...it is not impossible to go to school without taking out student loans.

There are thousands of scholarships available for students that are never used because those students are too lazy to put in the time and work to get them. Also, I know tons of students who've worked their way through college (me being one of them) without having to take out a student loan to pay for school. Granted...it has taken me longer than someone who got a loan, but at least I don't owe anyone for my bachelor's degree except for myself. Also, I appreciate my degree 500% more than the average person because I made sacrifices to pay for school so I could get my degree.  

Both places.  It's easier in Canada for sure because it is actually very easy to get a good paying career job in trade or the oilfield and I don't think university costs as much here.  However I do know quite a few people who graduated with masters or even doctorates from places in the States who graduated debt free because of scholarships or just taking a few more years to do school.

MrsBalletStar05

I think its VERY possible to not owe on student loans or a car.  For school, I know plenty of people who got grants, scholarships, worked, ect.  and didn't take out loans.  It's doable.  As for a car, that's fairly possible too.  You could by a less expensive car, or I know people who have taken out loans, but then paid them off very quickly by throwing all their extra cash that way. 

Right now, we owe on DH's student loan, we have two car payments, and I'm paying on a sort of medical credit card (I had extensive dental work done earlier this year).  I feel like it's SO MUCH, even though most of it is so-called "good" debt   I never felt that was anywhere close to being debt free.

When DH gets home in a few weeks, we should be able to pay a lot of that off.  Then we're going to start looking at houses.  LOL.  trading one type of debt for another..... I still don't consider owing nothing BUT a mortgage to be "debt free" but it's definitely a very good place to be. 

Alliebooberz

laurakaz13:

Our only debt is our mortgage as well, and I do consider that debt free.  Our house is worth much more than we owe, so I would actually consider us way above water. 

us too.