Becoming debt free
Discussion
Have developed this unhealthy obsession about becoming debt free (minus the mortgage). Came across a Dave Ramsay clip on YouTube which outlined the importance of ridding yourself of debt.
Now whilst I don't completely agree with his concrete views, it is appealing to know what you earn is yours and not owed to anyone else. Currently have 3 seperate lines of debt (2 very small amounts of 0%, 1 significant amount at a horrendous 9%).
My question, albeit slightly philosophical, is would you live a beans and rice life whilst doggedly paying off debt? Our would you strike a balance, pay them all gradually whilst still enjoying some luxuries?
Now whilst I don't completely agree with his concrete views, it is appealing to know what you earn is yours and not owed to anyone else. Currently have 3 seperate lines of debt (2 very small amounts of 0%, 1 significant amount at a horrendous 9%).
My question, albeit slightly philosophical, is would you live a beans and rice life whilst doggedly paying off debt? Our would you strike a balance, pay them all gradually whilst still enjoying some luxuries?
Henners said:
Would agree with this, balance is best IMO.
I looked at FIRE and decided it wasn’t for me, it sounds like a real gamble - money/debt vs quality of life.
And this is it, my biggest debt comes from a loan I used to fund my own education; a decision that has paid off in terms of earning potential. I looked at FIRE and decided it wasn’t for me, it sounds like a real gamble - money/debt vs quality of life.
As it stands I can afford my bills, put some money into savings, some into S&S and also pay my debts gradually whilst having some left over to enjoy.
Is deciding whether that balance is prolonging the pain or not.
Welshbeef said:
Re beans on toast
Planning things saves money vs erratic
Fear not, budget is well and truly sorted out. No excessive luxuries at all, run the cheapest motor on the planet and will do until it dies. Misses is a great cook and batches on the regular. Planning things saves money vs erratic
We're not hard up at all and I'm very thankful for that, it's just deciding whether to put everything spare into the debt or split it.
dan_87 said:
OP, I like what Dave Ramsey has to say. Apart from biblical finance, he is out helping people who have completely lost their way, by offering a way to change their behaviours rather than just looking at the maths. That said, he appears to have done very well off the back of it.
My only real issue with what he says is the complete lack of finance/payments. I'll actively make use of 0% because in my mind, it's free lending. I'm disciplined enough to know I can afford to pay it upfront, bit why would I choose to do so? Just wanted to dredge this up and not start a new thread.
As of next week I will have enough money to become debt free minus the mortgage and my pre-tax student loan contribution (does anyone count this as debt or pay it off early?)
To close my current debt I would have to empty my savings and Stocks & shares account (earning at less than the interest on the loan). I would have zero savings.
I've got no big costs coming up for at least 3 months, a few vehicles to commute with if one should be out of action, and the OH has savings if the boiler broke or whatever.
What would you wise lot do?
As of next week I will have enough money to become debt free minus the mortgage and my pre-tax student loan contribution (does anyone count this as debt or pay it off early?)
To close my current debt I would have to empty my savings and Stocks & shares account (earning at less than the interest on the loan). I would have zero savings.
I've got no big costs coming up for at least 3 months, a few vehicles to commute with if one should be out of action, and the OH has savings if the boiler broke or whatever.
What would you wise lot do?
eldar said:
Consolidate, you're debt free nett, a great position. The main thing is you can pay the debt off if need be, and staying debt free as sensible.
Looking at the investment position is almost a separate exercise.
Forgive me, I didn't really get that. Are you saying just stay net positiveand pay it off whenever? Looking at the investment position is almost a separate exercise.
Welshbeef said:
He means don’t be in a situation where you pay it all off (yippee) then made redundant and no reserves.
That aside how many months will it take to pay it down without touching your war chest?
It's a 60 month term and I'm 18 months in. I can wait until I've got a reasonable buffer it's just that it's been my focus for some time now that I'm growing impatient. Redundancy is a strong motivator to wait though. That aside how many months will it take to pay it down without touching your war chest?
Condi said:
OP says he has S+S ISA? Which should return more than 3% you would expect.
Yeah currently at 7.9% amazingly. Reluctant to touch it but it is less than 9.9%. The idea of refinancing seems silly to me despite the logic. It's a band-aid for a bullet wound and I'd rather clear it than halve it. I think I'll wait until I'm a few months clear.
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