Comments on: Could You Live Without Debt?

By: FinanciallySmart

FinanciallySmart — Thu, 25 Jun 2009 16:29:03 +0000

One can become debt free but it will not be overnight for persons who are used to the credit card and high maintenance living. They will need to make a lot of sacrifices to accomplished.

By: ahc

ahc — Wed, 24 Jun 2009 16:58:56 +0000

There’s no way I can live without debt but then again I don’t think all debt is bad.

I generally keep about $60 in cash on me and use credit cards for anything that is larger than that. But it isn’t a problem because I pay off my credit cards every month. Of course I try to limit the number of cards I have (I only have 2). For cars I don’t use credit because I buy them used, in cash.

The two largest “debts” I have is my student loan and mortgage loan on my investment property. I think it’s impossible to pay those off in cash… unless you wait a long time to acquire both an education and a home. The student loan is fixed at 1.875% so I’m delaying that as long as I can to repay it. The investment property is fixed at 4.5% over 15 years so the payments are small enough that I can handle it with both my salary and the rental income it produces.

I think debt can be very useful, as long as you know how to use it in moderation and it is within your ability to repay it.

By: IC

IC — Sun, 21 Jun 2009 03:46:28 +0000

If only public transportation was available everywhere…

By: LC

LC — Thu, 18 Jun 2009 21:29:04 +0000

Certainly it is possible, even preferrable, to live without debt. It would take about 10 years to save up for a house, versus 30 years to pay the loan off. You would miss the tax benefit, but what have you been doing for the past 10 years — probably paying interest on all of your other debts! School loans only make sense if they contribute to your future income. And you do not need a car — you could always take public transportation. A better question to ask is — would you prefer your dollars to be worth 80 cents?

By: debtor

debtor — Thu, 18 Jun 2009 20:23:37 +0000

I like the new look. I think you raise great points. Especially in terms of buying a house and such. I think I want to be in a position that I have enough cash to make a down payment and I have enough other cash that if I was to lose my job, I could pay my mortgage for at least 6 months. I don’t think I could wait long enough to save up to pay for a house in full but I would definitely want to put 20-30 percent down. I think the society is based in such a way you HAVE to have a credit card (assuming you don’t live in a remote farming village). You need one to rent a car, most apartments want you to have a credit rating before they rent to you and such things. I think I would want to be able to pay for things like vacations, shopping and plane tickets with cash, and then only use debt for really big items like a house. I think the best card would be like the ML card that’s basically a 30-45 day interest free loan you have to pay back…..

By: Abigail

Abigail — Wed, 17 Jun 2009 22:45:43 +0000

I *could* (once we get out of debt) but I really don’t want to have to. Let’s face it, used responsibly, credit cards are VERY convenient.

I’m not clear if you mean no debt as in never using credit cards (even if you pay them off at the end of the month) or no debt as in just never carrying a balance. I think the former is a lot easier. And I will probably continue to use credit cards, even after we get out of debt, for things like travel arrangements or unexpected expenses. My husband and I both have chronic illnesses, so expenses pop up every time we turn around.

And if we ever choose to buy a home, it will be with a mortgage. We’re not really sure yet whether we’ll be able to afford one and/or whether we would rather just rent. A lot is up in the air for the foreseeable future.

As for cars, I would like to have all — or at least most — of the cost saved up. It simply gives you more bargaining power.

I think, like any extreme, living with no debt limits your choices. But if someone feels better living that way, good for him/her!