Living a Completely Debt Free Life
Discussion
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
ETA - If so why?
V8Triumph said:
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
eta: if you've never had credit, you won't have a rating so you'll be an unknown risk. Lenders don't like an unknown risk. If you have some tiny pointless credit, you'll rack up a record of paying promptly and being a "good" debtor.
Edited by hapless on Thursday 12th July 14:14
V8Triumph said:
Are you saying it is better to live life with credit than to just save up for stuff you want and pay cash?
ETA - If so why?
If you want to been seen as a lower credit risk for things such as a mortgage and will make you eligible for lower rates. ETA - If so why?
Also helps with other things such as contact hire leases and monthly mobiles etc.
Reason being it's better to have a history of paying back credit than no history at all.
V8Triumph said:
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
ETA - If so why?
Anything can happen in this little life best be prepared ...a little like insurance
CaptainSlow said:
V8Triumph said:
Are you saying it is better to live life with credit than to just save up for stuff you want and pay cash?
ETA - If so why?
If you want to been seen as a lower credit risk for things such as a mortgage and will make you eligible for lower rates. ETA - If so why?
Also helps with other things such as contact hire leases and monthly mobiles etc.
Reason being it's better to have a history of paying back credit than no history at all.
I do not ever plan on having a contract hire lease and don't see the point in having a monthly mobile - I ring almost everyone on my BT landline phone. Only have a mobile for 'emergencies'.
So for someone who does want to avoid ANY type of credit - are there any benefits to having a 'good credit score'?
V8Triumph said:
CaptainSlow said:
V8Triumph said:
Are you saying it is better to live life with credit than to just save up for stuff you want and pay cash?
ETA - If so why?
If you want to been seen as a lower credit risk for things such as a mortgage and will make you eligible for lower rates. ETA - If so why?
Also helps with other things such as contact hire leases and monthly mobiles etc.
Reason being it's better to have a history of paying back credit than no history at all.
I do not ever plan on having a contract hire lease and don't see the point in having a monthly mobile - I ring almost everyone on my BT landline phone. Only have a mobile for 'emergencies'.
So for someone who does want to avoid ANY type of credit - are there any benefits to having a 'good credit score'?
V8Triumph said:
So for someone who does want to avoid ANY type of credit - are there any benefits to having a 'good credit score'?
Yes, it's worth having, especially if you can obtain one for no cost to yourself ie paying of a credit card each month. There may be somethings you want that you don't consider as credit eg Sky subsription etc. Also, you may want to avoid credit now (don't we all?) but things change in life and later on you may not be able to avoid it.Obiwonkeyblokey said:
Adenauer said:
Me too.
But be very careful as it can turn out a lot more expensive then you had budgeted for. About 50% more expensve in my case
100% in my case and still not done. ho hum.But be very careful as it can turn out a lot more expensive then you had budgeted for. About 50% more expensve in my case
V8Triumph said:
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
ETA - If so why?
A mortgage is secured on a property and enables you to live where you want to live today and pay for your home over time using the money that you would otherwise be saving up. You obviously understand the horrors of unsecured debt that can creep up quickly and multiply.
Perhaps you should consider saving until you have 25% of the value of your house (£25k or £45k given your examples) and then apply for a mortgage with two or three years of accounts behind you. The mortgage would be for the remaining £75k or £135k, which you could easily pay back over the normal 25-yr term, or overpay at your savings rate of £17k pa. That way you could be a homeowner in a couple of years and debt-free 5 years after that if being debt-free is still your priority then.
CaptainSlow said:
V8Triumph said:
So for someone who does want to avoid ANY type of credit - are there any benefits to having a 'good credit score'?
Yes, it's worth having, especially if you can obtain one for no cost to yourself ie paying of a credit card each month. There may be somethings you want that you don't consider as credit eg Sky subsription etc. Also, you may want to avoid credit now (don't we all?) but things change in life and later on you may not be able to avoid it.To be honest if I couldn't live within my means these days I'd go without and if st really hit the fan I'd sell one or two of my (more expensive) cars. It doesn't cost me an awful lot per week to 'get by'. Perhaps I'm happy with a lifestyle most people would hate, I don't know.
I don't think having a sensible mortgage is living beyond your means, everyone has to live somewhere and most will have to pay a mortgage or pay rent like you may be doing now. By starting getting a credit history now it will help you get a mortgage at better rates in the future if you decide to.
Renting v buying is another subject that has been discussed at depth so I don't want to start that one again.
Renting v buying is another subject that has been discussed at depth so I don't want to start that one again.
sideways sid said:
V8Triumph said:
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
ETA - If so why?
A mortgage is secured on a property and enables you to live where you want to live today and pay for your home over time using the money that you would otherwise be saving up. You obviously understand the horrors of unsecured debt that can creep up quickly and multiply.
Perhaps you should consider saving until you have 25% of the value of your house (£25k or £45k given your examples) and then apply for a mortgage with two or three years of accounts behind you. The mortgage would be for the remaining £75k or £135k, which you could easily pay back over the normal 25-yr term, or overpay at your savings rate of £17k pa. That way you could be a homeowner in a couple of years and debt-free 5 years after that if being debt-free is still your priority then.
If I had a mortgage and after a couple of years, I'd be remortgaged to buy *that* E-type I've always wanted and one thing would become the next because I'd managed it once the next time it'd be an Aston Martin etc. etc. I know it sounds absolutely ridiculous. I know that really I should be able to control myself but the fact is I know I can't. If my access to money is locked away in assets - I'm fine. If it's liquid / attainable I have an overwhelming desire to spend it and yes that includes money I do not have!
For the past few years I've learnt to live credit free and as far as assets I have bought, completely depreciation free as well (not just cars, I buy other 'stuff' as well) which has not only satisfied my horrendous need to spend but has proved to be rather prudent.
What I was asking is for a person like this, am I best off staying completely credit free even as far as buying a house goes?
V8Triumph said:
sideways sid said:
V8Triumph said:
CaptainSlow said:
davepoth said:
Get a credit card, buy something small (like a packet of crisps) on it each month, and pay it off in full each month. You'll pay nothing in interest, but it'll get you some good credit history fairly rapidly.
This, plus a pay monthly phone if you don't have one already. Maybe even take out a small unsecured loan and pay it back over the term...it'll cost you in interest but will make your credit history a lot stronger.
ETA - If so why?
A mortgage is secured on a property and enables you to live where you want to live today and pay for your home over time using the money that you would otherwise be saving up. You obviously understand the horrors of unsecured debt that can creep up quickly and multiply.
Perhaps you should consider saving until you have 25% of the value of your house (£25k or £45k given your examples) and then apply for a mortgage with two or three years of accounts behind you. The mortgage would be for the remaining £75k or £135k, which you could easily pay back over the normal 25-yr term, or overpay at your savings rate of £17k pa. That way you could be a homeowner in a couple of years and debt-free 5 years after that if being debt-free is still your priority then.
If I had a mortgage and after a couple of years, I'd be remortgaged to buy *that* E-type I've always wanted and one thing would become the next because I'd managed it once the next time it'd be an Aston Martin etc. etc. I know it sounds absolutely ridiculous. I know that really I should be able to control myself but the fact is I know I can't. If my access to money is locked away in assets - I'm fine. If it's liquid / attainable I have an overwhelming desire to spend it and yes that includes money I do not have!
For the past few years I've learnt to live credit free and as far as assets I have bought, completely depreciation free as well (not just cars, I buy other 'stuff' as well) which has not only satisfied my horrendous need to spend but has proved to be rather prudent.
What I was asking is for a person like this, am I best off staying completely credit free even as far as buying a house goes?
Maxf said:
hapless said:
boobles said:
Do you pay rent at the moment? If so, you are not debt free.
Only if it's overdue, surely?Sigh.
At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
hapless said:
And with respect, at 40 you were not as fit as you were at 20. Unless you'd been frozen like Walt Disney.
cwis said:
Sigh.
At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
Well done, then.At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
hapless said:
And with respect, at 40 you were not as fit as you were at 20. Unless you'd been frozen like Walt Disney.
Cheers!
I was making a point about assumptions with my previous post. Did you get it?
I was making a point about assumptions with my previous post. Did you get it?
hapless said:
cwis said:
Sigh.
At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
Well done, then.At 20 I smoked and slobbed out. My resting pulse rate was in the mid 70's
At 40 I do triathlons. Resting pulse rate is in the low 50's
So - with respect, I beg to differ...
hapless said:
And with respect, at 40 you were not as fit as you were at 20. Unless you'd been frozen like Walt Disney.
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