Debt free journey

[Mag]

Watching how my Mother and Mother -in-Law have dealt with the loss of their Spouses and reduction of income has really made me realize how important being debt free before retirement is. My Wife and I have been on a mission over the past few years (as a couple we started late in life having only been married 4 years now) to eliminate debt. We knocked out one this week by paying off my truck and we are on an aggressive plan to have the house paid off within two years. I really think we can do it faster as long as there aren't any unexpected surprises along the way. I told her that I am a man on a mission and have a count down poster on my office wall!
If all goes well I will then be able to find that piece of hunting land that I want This site has been a help as well since there have been various posts about being debt free etc.

 

[ImThere]

Good luck. It’s worth it.

 

[DaveB]

Debt free except for mortgage for quite awhile. It is indeed a very good feeling.

 

[BLC]

Stay the course.
Good luck!
The end justifies the means...

 

[EastTNHunter]

I’m on the same mission. My wife and I got married young, made some dumb financial decisions, and we are still paying for it. It’s really amazing how you can justify unwise financial decisions to yourself, even though you know better.

Oh well, live and learn, but making our way out of it. Plan is to be totally debt free except for the mortgage by next fall. We are putting off some much needed home improvements until then. We homeschool our kids and really need better school space (will be adding on, and hopefully building materials drop between now and then), flooring in our house is really crappy and needs to be replaced, siding and soffit is crappy and needs to be replaced, and have a few old windows that are missing one of the double panes. We knew these things when we moved in two years ago, but we are being patient.

 

[DANO63]

Good luck!

 

[DoubleRidge]

Good luck! Sounds like a great plan!

 

[Grandslam11]

It will be worth it. My wife and I are on the same plan. It’s takes 2, that is for sure. Current debt is mortgage only.

Where I struggle is this... do I pay even more towards my mortgage and get that paid off as soon as possible, or take that additional income and invest and allow compounding interest to work in my favor. I am in my 30s so I have plenty of time for either.
I like to think I can make more in interest in my investments than I pay in interest on my mortgage.

Any advice on that?

 

[PalsPal]

It is a great place to be for peace of mind, if nothing else. I came to this place differently than most. I lost my lifelong job in the spring as the result of a buyout.

Through the stress of trying to find something else, I realized that I was in a position where I could pull some retirement funds and use some of the payout from old job to knock out a lot of debt and buy me a truck, which I'd been wanting for a while. As a result I could take lower paying job with the state, but with much better benefits.

Keep plugging. You've made great progress. It helps a lot having your wife on board.

 

[PalsPal]

It will be worth it. My wife and I are on the same plan. It’s takes 2, that is for sure. Current debt is mortgage only.

Where I struggle is this... do I pay even more towards my mortgage and get that paid off as soon as possible, or take that additional income and invest and allow compounding interest to work in my favor. I am in my 30s so I have plenty of time for either.
I like to think I can make more in interest in my investments than I pay in interest on my mortgage.

Any advice on that?

Several factors that need to be considered. Term and interest rate on mortgage, are you putting a good chunk in retirement already, have a good emergency fund in place, etc.

 

[Snake]

Been debt free as you call it for a while . It's really a myth

 

[Vince]

Congrats on the achievement and mission. Definitely worth it...Keep clawing at it and you will be there before you realize.

Am debt free for some time now. Was laser focused and got it done, and definitely made some sacrifices and difficult choices. The hard part since then is to not go into debt again and still pursue dreams such as buying some land etc....

 

[Grandslam11]

Several factors that need to be considered. Term and interest rate on mortgage, are you putting a good chunk in retirement already, have a good emergency fund in place, etc.

Emergency fund is fully funded and I Max out my IRA each year

 

[Vince]

It will be worth it. My wife and I are on the same plan. It’s takes 2, that is for sure. Current debt is mortgage only.

Where I struggle is this... do I pay even more towards my mortgage and get that paid off as soon as possible, or take that additional income and invest and allow compounding interest to work in my favor. I am in my 30s so I have plenty of time for either.
I like to think I can make more in interest in my investments than I pay in interest on my mortgage.

Any advice on that?

Mathematically, you may be better off investing than paying off extra mortgage. However, it is also dependent on two other things - risk (the wrenches that can get thrown at us in our life journey - job loss, recession, illnesses etc.) & discipline (to invest that extra mortgage payment consistently so it can compound).

I am not very risk tolerant but quite disciplined, so I chose the path of paying off mortgage. I have friends who bought 2 to 5 rentals on mortgage instead of paying off primary home mortgage. These are people with steady salaried jobs. They have had big increases in net worth due to home value increases on their rentals and the cash flow from rentals, but they were scared to death in April when the pandemic hit due to the uncertainty. And now when I want to buy a rental or even land, the prices have gone up considerably, so I have to have more money to buy now.

The answer is, it depends - on your perspective and risk tolerance.

 

[Crow Terminator]

Wife and I bought our house new in 2015 and just wrote the last check to pay it off a couple weeks ago. I also wrote a big $11,000 check to pay off remaining credit cards we had. When all of it clears, we will only be paying my wife's Rav4 and what remains of her student loans which is about $10k. And then we are out of debt for the time being.

 

[Tom Collins]

Good stuff. Interest is a killer, and most don’t realize it.

 

[backyardtndeer]

Paid off the loan on our farm a few years back. We do have a mortgage on a rental property though. And would like to buy more.

Recently bought a new truck, could have paid cash but rate offered was very good, so financed about half and kept some cushion in the bank.

Nothing wrong with taking loans for the right reasons.

Far as credit card debt, never keep a balance. Use cards like an atm card. If we didn't have it in the bank we didn't spend it. So many people over extend themselves and get into trouble.