?s for those who are debt free

[Dandelion]

We've been completely debt-free for several years. 

 

So, how do you balance your long term goals with day to day wants? 

We have investment/savings goals for the long term (not just for our retirement, but also college savings plans for the kids).  As long as those goals are being met, bills are paid, and we're financially supporting the causes we care about, we feel free to splurge on day to day wants. 

 

What is your goal for retirement? (not asking for exact dollars but percents) The calculators are so all over the place.
We don't use percentages.  Instead, we've figured out what our approximate monthly income needs to be in retirement to take care of expenses and extras (adjusted for anticipated inflation).  From there, we've determined how much we need to have in liquid assets at retirement to cover those expenses. 

 

What luxuries did you splurge on once you were more or less set?

We didn't wait to splurge until we were set.  We've always allowed ourselves splurges since we knew we had a solid plan in place and were maxing out our employer-matched contributions to our 401Ks, annual IRA contributions, etc.  When DH and I met, we were both working full-time at high paying jobs.  So there has never been a time in our marriage when we were financially strapped (both of us experienced that in our early to mid 20's when we were first starting out, but that was before we met). 

 

DH is the more frugal one in our marriage, and I'm more of the mindset that you need to enjoy today in addition to preparing for tomorrow.  So we compromise.  We live in less of a house than we can afford, but it's been paid off for awhile and we regularly make improvements to it.  We drive nice cars, but not luxury cars, and we keep them for awhile.  We take a nice family vacation every year, and DH and I get away for a few weekends throughout the year (we would do that more often, but our schedules don't allow it).  We buy good food (quite a bit organic and specialty items) and we eat out frequently because we enjoy that.  

 

It's good to be frugal to a point.  When it starts consuming your life, and you deny yourself things that you could actually afford and that would enhance your quality of life, then I think it becomes counterproductive and possibly even harmful. 

[Soror]

Well, I talked to dh yesterday about savings, college and retirement and such- we finally had a little bit of time! He is on board w/ a plan I had talked to him previously about college and retirement- he acted like it was his idea, whereas last time he seemed cold towards it. I guess he needed time to warm up to it. So, we are now on the same page w/ our goals for college funding. We are increasing our savings and I think have a good but reasonable and attainable goal. Hopefully we can get that all set up in the next week or two as we still have to iron out the details. I would still like to contribute more but we are getting there!

 

I think I just needed to get it all out of my head. I don't mind spending a bit whenever we are on track w/ goals but we hadn't talked about goals in awhile and I have such a greater need to talk about it than dh- I'm the nerd of the family.

 

I'm still trying to work out a timeline for saving for our first big vacation but I think that will wait until we have finished our van fund. We do much better focusing on one thing at a time, it is much more exciting as it goes so much faster! Now we need to buckle down a bit and finish it off!

[creekland]

It's good to be frugal to a point.  When it starts consuming your life, and you deny yourself things that you could actually afford and that would enhance your quality of life, then I think it becomes counterproductive and possibly even harmful. 

I really love the way you worded this...

 

Buying "just because" is often meaningless - sort of like the cheap toy a youngster wants that is found on the floor "unloved" within an hour or day.

 

Buying "with cause" is so much different - it has meaning, it supports our economy, and there's absolutely nothing at all "wrong" about it regardless of what is being bought (more or less - one could stretch that beyond the general meaning).

 

Exactly what is "just because" (materialism) and "with cause" (meaningful) varies by the person and that variation is part of what keeps the economy rolling.  The overall message does not.

[Saddlemomma]

Everyone is different in their goals and expectations.  Primarily, we want to be self-sufficient so that if DH loses his job again, we aren't destitute.  (He lost it in 2009, but was asked to return in 2011)

 

Our house is paid off; our car is paid for.  We all work from home (me as a homeschool mom and my husband telecommutes).  Having just one income, we both expect and plan for the fact that we will never be able to fully retire.  The income just isn't there to save for retirement.  We do put a large portion of DH's income into savings, but there is barely any interest, and we don't trust the stock market at all.

 

Our main goals right now are to finish putting vinyl siding and installing new windows on/in the rest of the house (we did the north and west sides a year ago).  We also need to shingle the last part of the roof we haven't gotten to yet.  The reason we do these things in stages is because we pay cash for everything and do whatever work we can on our own.

 

We primarily heat with wood, so we always need to save up some cash for a load of logs every other year.  We are also saving up towards an off-grid solar power system just big enough to run some essentials.  This year we purchased a Bison water pump into our basement tied directly into our water pump.  Now we will always have water even without electricity.  We also grow/raise the bulk of our food.  Since we live on 50 acres, our gardens are huge and we dry and freeze all our veggies for the year.  Our eggs are from our own chickens, and we usually raise a pig for meat.  We are now contemplating raising goats as well.  By doing this, we save a substantial amount of money.  We only go shopping twice a month for staples like milk, cheese, butter, flour and sugar.

 

So, basically, we assess everything by needs vs. wants.  We take care of the needs first and then discuss whether or not the wants are justifiable based upon our long-term goals.  Most of the time, we dispense with the "wants".  For the most part, we rely upon God to provide the means to obtain what we need.

 

Not everyone could or would want to live like we do.  However, it works for us. 

[Soror]

HeighHO- we do take care of our medical and dental needs. My husband has pretty decent insurance through his work. It looks like so far that one child might need some slight palate expansion but the others are looking pretty good in that regard, as far as we(and the dentist) can tell at this point anyway. Dh and I just did a health screening at his work last week actually. We are blessed that we are in good health and try to take good care of ourselves (well dh could do better in this dept but he isn't doing all that bad :) ).

 

creekland- I really like how you went about deciding how to live at a certain level. I feel similarly, like we should in indulge to a certain point but then any extra should be diverted to saving and giving. It is harder to do that here as dh's salary is a bit erratic. He always makes at least X but there can be some months where he makes 2x or more. It is in those times he makes extra that we don't have a good plan. We've talked about it some but haven't been good on follow through. We've set priorities as well but as I said we work better focusing on thing at a time and priorities change. Dh has some things he would like to do around the house but he also literally doesn't have the time. We have material for projects right now he cannot even finish. We did talk about this some last night but I need to write out numbers and spreadsheets as that is the way my brain works, dh on the other hand feels twitchy when I start showing him such things :)

[Joyofsixreboot]

We paid the house off this month but that money will be filtered directly to college as we help our kids all get to/through college without debt.  No fun for us for 16 more years.

[Soror]

Ya, for you joyofsix!

 

I don't foresee us living it up either but I believe some fun can be ok and still keep us in the reasonably prudent category.

 

To be clear as well although I would like dh to have his retirement fund adequate as soon as possible he has no plans to quit working early. I would like the security of knowing that if he lost his job and had to get another one that we would still be ok in the future. I would also like dh to relax and be able to work a bit less at times so we can enjoy more family time. He has enough mandatory OT but still has a hard time turning down extra work- for one he gets so involved in his projects(electrical and programming) and also he has a hard time saying no to extra money, because there is always a use for it. I would like dh to feel enough freedom that if he wanted he could switch jobs, even if it meant a pay cut. He generally likes his job but there have been other positions that have opened up at times that I think would suit him better but he has always refused b/c of the money. I think at this point we would be ok with a bit of paycut but as our sole provider it weighs heavy on him to do the best he can in that regard. I want us to be secure as well but I also prefer that he do that in a way that is best for him.

 

 

I also foresee that we will likely help more w/ college than our current plan but we wanted to have a minimum amount to shoot for while still keeping our retirement in line and allowing for some indulgences in our day to day life. Once we get that fund filled then we will re-evaluate how much more we can and should give. If life continues as is we should be able to cashflow a good amount as well if we decided that was the best option but of course no one knows the future and we can just do our best to prepare.

[ThatHomeschoolDad]

My question would be is "debt free" universally feasible regardless of location?  I'm on the train line, one hour from Manhattan, and thus little 3 bedroom capes here start at half a million.  I would think it is possible near the local median income of about $100K per parent, but yeah....that isn't us.  At least we aren't in Essex County, where that half mill cape would also have property taxes of $20K a year to subsidize Newark.

 

I like a lot of things about northeastern New Jersey, and the state in general, but cost ain't one of them.

[sunnyday]

My question would be is "debt free" universally feasible regardless of location?  I'm on the train line, one hour from Manhattan, and thus little 3 bedroom capes here start at half a million.  I would think it is possible near the local median income of about $100K per parent, but yeah....that isn't us.  At least we aren't in Essex County, where that half mill cape would also have property taxes of $20K a year to subsidize Newark.

 

I like a lot of things about northeastern New Jersey, and the state in general, but cost ain't one of them.

 

If the houses in your area are too expensive for your budget, then you rent or move or increase your income, right? I don't see how geographic location demands endless debt. I mean, even if you take out a 30-year mortgage, aren't you aspiring to be debt-free after those 30 years?

[Carrie12345]

My question would be is "debt free" universally feasible regardless of location?  I'm on the train line, one hour from Manhattan, and thus little 3 bedroom capes here start at half a million.  I would think it is possible near the local median income of about $100K per parent, but yeah....that isn't us.  At least we aren't in Essex County, where that half mill cape would also have property taxes of $20K a year to subsidize Newark.

 

I like a lot of things about northeastern New Jersey, and the state in general, but cost ain't one of them.

If someone is living in an area they can't afford, I'm not sure how carrying credit really helps. If one is short $X every month, that X is going to grow exponentially every month until the minimum payments exceed the monthly shortage to begin with. It's not exactly a sustainable plan.

[ThatHomeschoolDad]

If the houses in your area are too expensive for your budget, then you rent or move or increase your income, right? I don't see how geographic location demands endless debt. I mean, even if you take out a 30-year mortgage, aren't you aspiring to be debt-free after those 30 years?

 

If we're counting a full term of 30 years as debt free, then yes, we will be debt free in about another 15, since we're about half-way through the mortgage.  Going by the Dave Ramsay talk-show-model, there seems to be a movement to pay off everything early, and that is the part I don't see as feasible on one income in this area.  Fortunately or unfortunately, we've been in our house long enough that rents in the area would likely exceed out current mortgage payment.

 

Yes, anyone could move to anywhere by choice, but whether the upheaval is minor or major would tend to vary family to family.  In our particular case, which may not be someone else's case, DW is in a tenured position, would rather not start over in another district, and is less likely to find another position after 26 years because she is simply too expensive.  Would I pull DD out of the dance school she's attended since 2, or would I pull her out of her professional youth chorus after 5 years of hard work?  That would be no to both.  Yes, I'm sure parts of Iowa are much, much cheaper, but the over riding question has to be what's right for your family at the time (not unlike the decision to HS).

[fairfarmhand]

We were so tight when we first got married that I wore the same clothes for years. New undies was a stretch for all of us. I remember growing up it was much the same. I remember being so embarrassed in middle school that my shoes had holes and were falling apart. It was beyond just awkward, not fitting in I don't have the right "style." It was humiliation.

 

Currently, we do budget pretty tight, but I am anal about our family having clothing and shoes that are not tattered. I remember well the embarrassment about having things that were in pitiful shape, and I don't want to live there again.

 

Why not talk to your kids and ask them their opinions on where they might like to see an occasional splurge.  For our family, I will allow myself to splurge on higher priced items if it means a better quality item. However, I refuse to pay higher prices for "the brand."

[fairfarmhand]

). He only sees the negative side of paying for schooling from his experience. Personally I have thought it would be good to offer to pay for the first 2 yrs locally or a set dollar amount for each but of course this is something we have to come to agreement on together.

 

My friend does a pay for college plan with her kids like this:

 

The kid pays for the first semester, books, tuition, everything. (Her girls worked as teens) Then, for every passing grade, she reimburses them the cost for that course. They can use the funds for the next semester. This seems to keep her kids focused on finishing and passing. It also ensures that mom and dad aren't paying for a semester of partying at the frat house.

 

[ThatHomeschoolDad]

No, I don't think so.  It is partially why New York, Alaska, California and Hawaii are never places we considered living.  My uncle lives in a little house in a suburb of San Francisco.  It is worth 1.5 million.  Here where I live, you would pay maybe 100,000 for it.  I shudder to think what our 50 acres and 3,000 square foot house would cost.  So part of looking at your financial goals is looking at where you live.  The cost of living here is low.  We never considered living in those higher places.  I think that makes a BIG difference.  I'm not sure how teachers survive in California...  Actually most of them have to live an hour or more out of district to  afford a place to live where my uncle lives.  So, where to live a big part of becoming debt free.

 

 

I just checked realtor.com - you want 3000 sq ft in my town?   $650 to just over a mill.   50 acres will be harder to come by, but you could always buy up the neighbors and demolish.  I think that's what the landed gentry do.

 

There are a lot of young teachers in DW's school commuting an hour plus. On the other end, we know couples who are both veteran teachers at the top of the salary guide, which here means a family income of about $250K. If there is an eventual upside, it's that a teacher's pension is based on the last three years' salary, so those working in expensive states have more when they pull the ripcord and retire to cheaper states.   Virginia and Florida seem to be popular among DW's retired colleagues.

 

Other things to consider are what sort of infrastructure do you want?  As long as I'm alive, I'll have to have access to my oncology team in Philadelphia who are the world leaders for my particular little bug.  So there's a cost comparison -- patients do indeed fly in from as far away as Australia, so which would be more -- property taxes or airline tickets?

 

There isn't one answer.

[LibraryLover]

I'm currently living where the COL is astronomical.

[Catwoman]

My question would be is "debt free" universally feasible regardless of location? I'm on the train line, one hour from Manhattan, and thus little 3 bedroom capes here start at half a million. I would think it is possible near the local median income of about $100K per parent, but yeah....that isn't us. At least we aren't in Essex County, where that half mill cape would also have property taxes of $20K a year to subsidize Newark.

 

I like a lot of things about northeastern New Jersey, and the state in general, but cost ain't one of them.

Sure it's feasible.

 

My dh and I live in the NYC area and have those crazy property taxes, too, and we have been entirely debt-free for years, as were my parents and my brother when they were alive. One of my nephews is in his mid-thirties and is self-employed, and his family is also debt-free. His houses and cars are paid off, his kids attend good private schools, and they take nice vacations. None of us ever chose to live the way I'm reading in some of the posts here, even when we were trying get our mortgages paid off or put money away for things like college funds and retirement funds.

 

I do think, however, that there is definitely an element of luck involved, in terms of having chosen well-paying careers or having started the right businesses at the right time.

[LibraryLover]

I think Amy D of the Tightward Gazette is a great example of a regular person living frugally and ending up debt-free and wealthy (which she is).  Their kids do not seem to have suffered not going to camp, taking dance and gymnastics lessons , going on trips.  The D's created a rich home life for their children that will sustain them in a way gymnastics lessons can't. I understand that.

 

 

 

[ficbot]

I don't think 'anyone' could live anywhere. We live in a very expensive city and both of us grew up here so we know it and have ties, but more importantly, my SO has a manageable, but significant chronic health condition. He has to be near a certain type of hospital. His ex moved to a cheaper city and took his child with, but he can't follow because of his medical situation. It's not so straightforward for him as 'well, just move.."

 

So for us, we rent,a new e budget carefully to afford what we want and need. I know people who own who spend more than we do on their mortgage and property taxes. And they spend so much that they cannot afford a retirement account. We have much more predictable monthly costs, and we do put some of the surplus into investments. So at the end of 30 years, they will sell their house to downsize. They will get a nice lump sum and then they wil l pay for rent. And we will not have a house to sell but we will have our investments. So we will get a nice lump sum and then pay for rent. The only difference will be that in the meanwhile, we still had a life...

[ThatHomeschoolDad]

Although I understand I guess even with a medical condition, it is just MUCH cheaper to live in Dallas or OKC than it is to live in New York.  It just is.  And those places have VERY good healthcare.  It doesn't have to be a high cost city to get good medial care or other perks.  Cost of living was a BIG factor in our choosing where to live.

 

 

Great healthcare can be had in many places, until you need a really special specialist.   6 out of every million people contract my rare cancer, and those who progress to stage IV tend to find their way to Boston, NYC, Philadelphia, and/or Pittsburgh, because that's where the treatment is.  Now if we're talking lung, breast, or prostate, different story. 

[MIch elle]

My question would be is "debt free" universally feasible regardless of location?  I'm on the train line, one hour from Manhattan, and thus little 3 bedroom capes here start at half a million.  I would think it is possible near the local median income of about $100K per parent, but yeah....that isn't us.  At least we aren't in Essex County, where that half mill cape would also have property taxes of $20K a year to subsidize Newark.

 

I like a lot of things about northeastern New Jersey, and the state in general, but cost ain't one of them.

 

Yes, it's still feasible. 

 

I grew up in Hudson County, NJ and it is possible.   If my parents could do it with 4 children, anybody can do it (deaf father, hard-of-hearing mother; no $$ from family; never taking anything from the state). 

 

You can buy a 2 family home in Hudson County for under $300k (just looked up my old home) that's closer than a one hour train ride to Manhattan.

[Camelfeet]

We don't own a home at this point but we are in the unique situation of having decent tax free income and few bills and no debt.  

 

So, how do you balance your long term goals with day to day wants? 
We don't.  At this point having disposable income is still rather new and we aren't good at it.  We strive to put away minimum 25% or more of income into savings each month.  We haven't consistently met that goal.  This year will be better for us as we have managed to pay off all student debt and we don't have to furnish a new apartment so we can put more away.  

 

What is your goal for retirement? (not asking for exact dollars but percents) The calculators are so all over the place.

I don't know.  We are 35 years away from being seniors.  We are currently speaking with a financial adviser about the best/most secure way to invest our savings.  As expats we can't invest into an RRSP/401k.    

What luxuries did you splurge on once you were more or less set?

Traveling.  We have been on 4 international holidays to Europe and Asia in the past year.  

We also eat out once a week...  Not usually anywhere fancy.  Its completely frivolous because if I planned better I'd be able to make all our meals from scratch.   Music lessons for our kids and way too many books.    

[Pawz4me]

I know this goes against the topic of this thread, but honestly -- I don't think being debt free is necessarily a wise financial goal, and certainly not one that needs to be a priority for  everyone.

 

I understand some people have religious reasons for not wanting to be in debt, and some feel anxiety over any kind of debt.  It's understandable that those people would want to pay off everything as quickly as possible.

 

But regardless of what Dave Ramsey says, you (generic) really need to think about whether it makes sense financially  to pay off a mortgage early.  For many people it doesn't.  We do have a mortgage.  Although the balance isn't particularly small, I could pay it off this afternoon if I wanted to and never miss the money.  But it would be a very poor financial decision (in our opinion) since our interest rate is quite low, and our average rate of return on our investments is significantly greater.  Mr. Ramsey really does many people a huge disservice when he tries to make a rather complicated financial decision into a "one size fits all" answer.  And his pat answer potentially costs many people a great deal of money.

[nrg]

My children are grown now, but we have been debt free for many years. I am grateful we had the means to achieve this early and the foresight to recognize that issues involved in balancing financial decisions. We ended up owning a much smaller house, much older cars, and many fewer items than friends of comparable incomes, However, our children had music lessons, scouts, sports. We focused on the things which needed to be timely--childhood is fleeting and the experiences last a lifetime. That is not to say that we indulged in stuff, toys, etc., or that we denied ourselves in favor of spoiling the children. However, we never decided not to visit grandparents because of the expense, or denied instrument lessons (we did find ways to economize with these). We saved for travel as our children grew older. Most of the things and events which create family unity, traditions, and strength do not cost much money. It is important to be careful to find a balance between the constant evaluation of cost and the delight of family life. Our children learn their attitudes about money from us.

[sunnyday]

If we're counting a full term of 30 years as debt free, then yes, we will be debt free in about another 15, since we're about half-way through the mortgage.  Going by the Dave Ramsay talk-show-model, there seems to be a movement to pay off everything early, and that is the part I don't see as feasible on one income in this area.  Fortunately or unfortunately, we've been in our house long enough that rents in the area would likely exceed out current mortgage payment.

 

Yes, anyone could move to anywhere by choice, but whether the upheaval is minor or major would tend to vary family to family.  In our particular case, which may not be someone else's case, DW is in a tenured position, would rather not start over in another district, and is less likely to find another position after 26 years because she is simply too expensive.  Would I pull DD out of the dance school she's attended since 2, or would I pull her out of her professional youth chorus after 5 years of hard work?  That would be no to both.  Yes, I'm sure parts of Iowa are much, much cheaper, but the over riding question has to be what's right for your family at the time (not unlike the decision to HS).

 

The bottom line is choice. You recognize that there are financial (debt, savings rate) impacts to living in a high COL area and having one spouse stay home. But the benefits (specialist care, extracurriculars, tenured job) are worth it to you, so you make the choice with eyes open. I respect Dave Ramsey's advice and it can be vital to many families but in the end you have to live your own life.

[creekland]

I know this goes against the topic of this thread, but honestly -- I don't think being debt free is necessarily a wise financial goal, and certainly not one that needs to be a priority for  everyone.

 

I understand some people have religious reasons for not wanting to be in debt, and some feel anxiety over any kind of debt.  It's understandable that those people would want to pay off everything as quickly as possible.

 

But regardless of what Dave Ramsey says, you (generic) really need to think about whether it makes sense financially  to pay off a mortgage early.  For many people it doesn't.  We do have a mortgage.  Although the balance isn't particularly small, I could pay it off this afternoon if I wanted to and never miss the money.  But it would be a very poor financial decision (in our opinion) since our interest rate is quite low, and our average rate of return on our investments is significantly greater.  Mr. Ramsey really does many people a huge disservice when he tries to make a rather complicated financial decision into a "one size fits all" answer.  And his pat answer potentially costs many people a great deal of money.

I'm with you.  If we hadn't borrowed off our house (home equity) back when we wanted to start to invest, we'd have far less for retirement now.

 

If hubby hadn't had basic student loans to get his engineering degree, we'd have far less income than we have now (no, a debt free option was not available without significant more years and those years could, instead, be producing a nice income).

 

There are times when debt can be good.  One needs to be wise rather than "one size fits all" IME.  I'm glad we didn't choose 100% debt free.

 

[Soror]

The kid pays for the first semester, books, tuition, everything. (Her girls worked as teens) Then, for every passing grade, she reimburses them the cost for that course. They can use the funds for the next semester. This seems to keep her kids focused on finishing and passing. It also ensures that mom and dad aren't paying for a semester of partying at the frat house.

 I like this idea and we have talked about something similar. We haven't decided exact details yet as it is so far off but it will not be just paying w/out any requirements of grades and such like dh's parents did for him, he is very decidedly against that route.

 

We were so tight when we first got married that I wore the same clothes for years. New undies was a stretch for all of us. I remember growing up it was much the same. I remember being so embarrassed in middle school that my shoes had holes and were falling apart. It was beyond just awkward, not fitting in I don't have the right "style." It was humiliation.

 

Currently, we do budget pretty tight, but I am anal about our family having clothing and shoes that are not tattered. I remember well the embarrassment about having things that were in pitiful shape, and I don't want to live there again.

 

Why not talk to your kids and ask them their opinions on where they might like to see an occasional splurge.  For our family, I will allow myself to splurge on higher priced items if it means a better quality item. However, I refuse to pay higher prices for "the brand."

LOL! I see now that I have created a perception that my children and I are walking around in tattered clothes two sizes too small.

 

The kids are generally well-dressed, unless we are home, in which case they wear play clothes and I don't much care what those look like. We've been blessed w/ hand me downs until this last year for the girls, both of our parents love to buy clothes for the girls and I am generally able to find nice clothes in great condition at thrift and consignment shops to fill in gaps.

 

If I worry about anything I worry about the girls dressing too fancily when we go out. Quite often they are dressed nicer than most everyone else. They take great pride in dressing nicely. I don't buy name brands for the sake of the brand but if I feel it is a higher quality or looks nicer then I go for them, especially when I find them at Goodwill.

 

Despite the fact that I patched my undies last year and fwiw I did buy a whole stash of new VS ones last year w/ Christmas money and have enough to last years now :) I generally do not look like a bum either. I was in need of a clothes update however between going up and down in sizes w/ pregnancy and then losing weight again. Usually I'm able to find things at the thrift store that I like but I just haven't had much luck as of late and as we can afford it now I indulged in some new items. I'm kind of picky when it comes to what I will wear and I do tend towards quality over cheapness.

 

 

I think Amy D of the Tightward Gazette is a great example of a regular person living frugally and ending up debt-free and wealthy (which she is).  Their kids do not seem to have suffered not going to camp, taking dance and gymnastics lessons , going on trips.  The D's created a rich home life for their children that will sustain them in a way gymnastics lessons can't. I understand that.

 Amen!

 

I don't think 'anyone' could live anywhere. We live in a very expensive city and both of us grew up here so we know it and have ties, but more importantly, my SO has a manageable, but significant chronic health condition. He has to be near a certain type of hospital. His ex moved to a cheaper city and took his child with, but he can't follow because of his medical situation. It's not so straightforward for him as 'well, just move.."

We live where we do b/c of family and there are pros and cons of course.

 

 

Fwiw we didn't pay off the house b/c we are DR cool-aid drinkers or such. It was on our radar long before we heard of DR. It was a great peace of mind for dh to have our house paid off. It provides security for me as well. In the event of dh losing his job knowing that we could make it on unemployment or even a low paying job if needed as our living expenses are so low gives us great comfort. Like with everything we didn't blindly follow anything and weighed various options.

[ficbot]

Great healthcare can be had in many places, until you need a really special specialist.   6 out of every million people contract my rare cancer, and those who progress to stage IV tend to find their way to Boston, NYC, Philadelphia, and/or Pittsburgh, because that's where the treatment is.  Now if we're talking lung, breast, or prostate, different story. 

 

This exactly. His is in the 'really special specialist' category. Stage 1 of what he has is portable to another doctor. Stage 2 you could maybe push it. He's a stage 3 and pretty much has to be here. Don't knock it unless you've been in those shoes :)

[FairClaire]

I know this goes against the topic of this thread, but honestly -- I don't think being debt free is necessarily a wise financial goal, and certainly not one that needs to be a priority for  everyone.

 

I understand some people have religious reasons for not wanting to be in debt, and some feel anxiety over any kind of debt.  It's understandable that those people would want to pay off everything as quickly as possible.

 

But regardless of what Dave Ramsey says, you (generic) really need to think about whether it makes sense financially  to pay off a mortgage early.  For many people it doesn't.  We do have a mortgage.  Although the balance isn't particularly small, I could pay it off this afternoon if I wanted to and never miss the money.  But it would be a very poor financial decision (in our opinion) since our interest rate is quite low, and our average rate of return on our investments is significantly greater.  Mr. Ramsey really does many people a huge disservice when he tries to make a rather complicated financial decision into a "one size fits all" answer.  And his pat answer potentially costs many people a great deal of money.

 

I have to disagree.  It isn't always about numbers.  Yes, you might have a high yielding investment and a lower interest debt (mortgage).  But there is something special about being debt free.  There is a certain peace of mind that comes with knowing you don't have any debt.  

[creekland]

I have to disagree.  It isn't always about numbers.  Yes, you might have a high yielding investment and a lower interest debt (mortgage).  But there is something special about being debt free.  There is a certain peace of mind that comes with knowing you don't have any debt.  

 

I think this goes along with the idea that everyone has to choose what is important to them and that not all of us are going to pick the same thing.  Some prefer the peace of mind of no debt.  Others prefer the peace of mind having more $$ because of leveraging debt.  (And there are probably other categories too - I was just using the two at hand.)

 

We all need to choose for ourselves, not for someone else.  We (all) can just share our experience for others to consider if they care to.

[FairClaire]

I think this goes along with the idea that everyone has to choose what is important to them and that not all of us are going to pick the same thing.  Some prefer the peace of mind of no debt.  Others prefer the peace of mind having more $$ because of leveraging debt.  (And there are probably other categories too - I was just using the two at hand.)

 

We all need to choose for ourselves, not for someone else.  We (all) can just share our experience for others to consider if they care to.

I understand :)

 

I am just trying to say that in my experience, there is a difference between being in a good place financially with debt and being debt free.  I know many people feel differently and don't mind having the debt.

 

And some (definitely not all) people I know who choose to leverage debt run into trouble later that could have been avoided by passing on the investment opportunity.

[FaithManor]

We never regretted our student loans, nor our mortgages. We had excellent reasons for them at the time, and they served us well. That said, we are now free of all payments except a small car loan. At this time in our lives, that is also a blessing...with aging parents, kids to send to college, etc. it's nice to have the cash freed up and especially in this economy. We've not had an investment in the past five years that has paid a higher rate of return than the 8% we were paying on the mortgage. Every family situation is different. In our neck of the woods, there has been no economic recovery and everyone is underwater on their mortgage and hanging on hoping to NOT lose their jobs. So, from that perspective, we are sitting pretty.

 

It all comes at a good time. My sister is in need of assistance which we can now gladly provide.

 

As for priorities, again everyone is different. We are socking more money away for retirement, college funding, and also for travel. Travel has become really important to dh and I, we really do not care so much about furniture, clothing, nice cars, etc. Seeing far off places...that's what we are willing to splurge on and the first trip has been purchased - Iceland, summer 2014! Yippee!!!

 

No one has a crystal ball with which to predict the future, so ultimately, all we can do is the best we can do. To those whose choice of locale is based on access to medical help, all I can say is I am sooooooooooooooo sorry. I remember a time in our lives when we had to make similar choices, and it stinks. We made the best of it, but it wasn't easy. My heart goes out to you. Rare conditions are especially wicked.

 

OP, give it some time. You have a new normal to adjust to, and it's best not to make impulsive decisions. It kind of took dh and I a couple of months to figure out our new norm and make a plan that made sense for us.

[creekland]

 

And some (definitely not all) people I know who choose to leverage debt run into trouble later that could have been avoided by passing on the investment opportunity.

:iagree:   I definitely caution anyone thinking of doing it to run the numbers carefully and not with rose colored glasses on.  They also (IMO) should never get into more debt than they have assets for.  No risk is worth losing everything (to us).  Others may differ...

 

a higher rate of return than the 8% we were paying on the mortgage.

 

As for priorities, again everyone is different. We are socking more money away for retirement, college funding, and also for travel. Travel has become really important to dh and I, we really do not care so much about furniture, clothing, nice cars, etc. Seeing far off places...that's what we are willing to splurge on and the first trip has been purchased - Iceland, summer 2014! Yippee!!!

 

 

Yikes!  8% is wicked high.  Definitely don't leverage any debt at that rate!  Ours is 3%... a huge difference!

 

And we're right there with you with travel... ;)  Enjoy Iceland!