Why you shouldn't be paying off debt

Home Forums Financial Preparedness Paying Off Debt Why you shouldn't be paying off debt

This topic contains 9 replies, has 7 voices, and was last updated by  Littlesister 2 months, 1 week ago.

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  • #19469

    Now, I’m not here to judge and I’m not rich.

    But consider this, what is the one thing (most) broke people, and rich people want more of (for various reasons of course)?

    Moola!

    That’s right, and why?

    So they can get what they ain’t got and because they think that once they get the thing the “bread” will buy, they suppose they’ll have peace of mind, right?

    (Wrong.)

    And these days the most accessible way, especially for the poor and underfunded, or the in the worst of cases the already overleveraged, can get there hands on what they want or need or think they need “right now!” is:

    Credit!

    But credit makes its owner a bond slave to the creditor, getting rich from the interest.

    How much money does the United States owe, and to who? It’s crazy…

    And it’s why I said in the title, not to pay off debt.

    But instead, don’t have it at all. (Easier said than done, I get it. I should take my own advice…)

    If you’ve got the dough, buy “it,” if not, don’t.

    That’ll correct the economy and deflate inflation, and put a serious dent in the rate of rapid global warming, just think: since global warming is caused by industry and industry is inflated by debt.

    A little “pie in the sky” but it’s true, think about it, it starts with me it starts with you.

    (Whatcha gonna do?)

    Oh, to die debt free, wouldn’t that be nice (success for modern times)…

  • #19474

    Crow Bar
    Keymaster

    Great idea.

    But your average American does not have the financial discipline to do without.
    They want “it” (“it” being that shiny plastic pumpkin) and they want it now!
    They replace the word “want” with “need.” Like, “I need that big screen TV in my bathroom!”
    And they do some amazing mental gymnastics to justify their purchases.

    The idea of paying your self first (i.e. savings), then paying the necessities (house payment, car payment, insurance, utilities, etc.), then what is left over is for entertainment has done a 180.

    I hear about people who are living paycheck to paycheck, and they are in the middle class. Most, but not all, put themselves in that position by buying the McMansion, the flashy car, the newest iPhone, and all the gadgets they fill their houses with.
    And yet they complain.

    I know one guy, has a 3000sqft house, and a 1700sqft summer cabin in the mountains. He thinks the summer cabin is cramped! And it is just him!

    • #19838

      I hear you Crow Bar, just sharing my thoughts and doing what I can to get outta debt my-darn-self… Sad but true.

  • #25990

    Fran Franklin
    Participant

    I’m also dealing with debt and we’re doing our darnest to get out of it.  I work from home and all of my salary after taxes goes to debt.  My husband works full time.

  • #25999

    Crow Bar
    Keymaster

    The next few months are going to be financially tight for us, but only because we put ourselves on a path to be debt free with the exception of the house payment by APR/MAY time frame.
    We still have savings, but it is not as much as we normally have in reserve.

  • #26005

    Whirlibird
    Participant

    Hate to say it, but I had to reread the OP.

    Some debt cannot be avoided, as few of us can’t just walk in with cash and buy a house or car.

    Using “credit” can be beneficial but you must be disciplined about it.
    Only buy things with credit that you can actually pay cash for, you just aren’t carrying around the cash.

    So I have been paying off medical debts and this has left me short of “pocket money”. At the same time, I have been restructuring my income and payments to pay stuff off faster and still put money into savings and occasionally get something that I want.
    For example, a couple of AR parts were wanted, I could have just put them on the card, but instead I put the money into savings little by little until I had the cost covered. Then the parts were purchased with the card, and the money immediately transferred and the card payment made.
    But no purchases are made with the card unless the cash is already there to pay that charge off.

    It has really helped me focus on my wants needs and desires. And by July, I will be debt free except for whats left of the student loans and the house, good thing as I need to be looking for a car for the youngest.

     

  • #30739

    BarrensHomey
    Participant

    Taking on new debt is of course an action to be taken on with caution, however the whole picture needs to be considered. In my case, I am buying building materials with an 8% personal loan. These building materials (lumber, Sheetrock, tongue-in-groove paneling) have experienced significant price increases this year, on the order of 50% and more and prices continue to climb. And my main contractor is available now. Borrowing at 8% now to avoid a 50% price hit and possible scheduling problems next season makes good economic sense. I’m still working full time and plan to pay off the loan without undue strain on my home finances. Please note: I’ve been pretty much debt free for several years, with a zero balance on my credit card, to avoid all the debt slave traps we have seen. But leveraging your position can move your life ahead when done with awareness of the risks and caution in committing yourself beyond your means.

     

    • #30741

      Crow Bar
      Keymaster

      8% vs 50% . . . that is a good way of looking at it.

  • #30755

    Loving Life
    Participant

    Interesting thread. I made the move to a more rural lifestyle and downsized. I also cash flowed my property. It is so freeing to have no debt. Surprisingly, some friends have been a little surprised at more modest smaller digs of about 1800 plus 800 additional sq living space in the walkout basement (yes 2600 sq ft living space). These days it is just me and the dogs plus guests. I heard “Oh you could afford so much more!”

  • #30769

    Littlesister
    Participant

    I must be one of the lucky ones.  House is paid off now for several years. We have never borrowed from it.  Car is paid off. As for charge cards, I have a limit if I use them. Always pay off what I put on them each month. No interest but do get cash back bonuses. so that for me is a plus. I figure at my age, we don’t need much. We do have insurances to pay each month and taxes on house and car. But that is all the bills we have. I intend to keep it that way. If I do decide to one day move closer to where my daughter is moving to, this house will be what pays for my next house. Still don’t want a house payment.

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