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Debt free journey

Mag

Well-Known Member
Joined
Nov 12, 2007
Messages
2,474
Location
Gallatin
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.
 
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EastTNHunter

Well-Known Member
Joined
Mar 8, 2010
Messages
7,017
Location
Rhea Co., TN
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.
 

Grandslam11

Well-Known Member
Joined
Jun 9, 2011
Messages
1,926
Location
Cookeville TN
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

Well-Known Member
Joined
Oct 1, 2012
Messages
7,691
Location
TN
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

Well-Known Member
Joined
Oct 1, 2012
Messages
7,691
Location
TN
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.
 

Vince

Active Member
Joined
Mar 28, 2014
Messages
693
Location
Brentwood, TN
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....
 

Vince

Active Member
Joined
Mar 28, 2014
Messages
693
Location
Brentwood, TN
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

Well-Known Member
Joined
Oct 23, 1999
Messages
10,970
Location
McMinn County
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.
 

backyardtndeer

Well-Known Member
Joined
Jul 29, 2015
Messages
1,915
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.
 

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