Sunday, October 27, 2013

Debt-Free? OR Debt-Free!

Let’s talk money, money, money. More specifically, let’s talk about my debt. By the way, does my picture and title of this post confuse you?

In a way, it is meant to be confusing. Of course, I know my answer to this question but the answer may truly depend on who is giving the answer.

The personal debt that my husband and I have left to pay off is our mortgage. Yes, that is right, just our mortgage! We do have some business debt (house rental) that pays for itself (through a long-term renter) and is therefore a debt we do not count under personal debt. 

I have read many, many blogs where individuals claim to be debt-free despite still having a mortgage. I don’t think like that. Our house is currently owned by our bank and we have a loan to pay for it. Therefore, we are still in debt. For the time being at least.

We currently owe $63,000 on the house. We hope to pay this 30 year loan (26 years left on the loan) within the next 7 years. We are asking YOU to join us on our journey!

I am hoping to write several posts about how my family lives frugally and has paid off all of our past debt. Let me start by explaining to you how we have gotten into debt and what has been paid off. Then, look for more posts to follow giving tips and tricks we have learned (the hard way at times) to pay off debt quickly! 

Before I begin with our details, it is important that I point out that neither of us have family (or anyone else) financially supporting us. We do not make tons of money. We work hard to live on much less than we make and use the extra money to pay off debt as quickly as possible. We have watched family members who have filed bankruptcy and we have also watched family members come from nothing to making big-time money. We have learned from both.

Our Debt Acquired (currently paid off):

·     Student loans: I have a master’s degree and my husband has an associate’s degree.

·     Vehicles: I drive a Buick Regal (only a few years old). My husband drives a Chevy Silverado (about 6 years old). 

·     House renovations: Since moving into our house we have completed 2 major renovations and 1 minor (could be considered major, depending on how you look at it), all of which we saved up for and paid cash straight out. This included building an attached 2 car garage, adding a patio to our backyard, and a kitchen renovation. 

·     House modifications: When we moved in the windows needed replaced; which we did immediately. The first summer here, we unfortunately needed a new air conditioner as well! We saved up and planned for the windows but the air conditioner was a “surprise” that we had to use money from our emergency savings fund.

Our Current Debt:

·     Mortgage on our house: Loan was taken out in 2009 for $82,000 and we have $62,000 left.

Our Savings:

·     Having money to fall back on in case an emergency does occur is very important to us. For this reason, we have enough funds to live off of for 6 months if a crisis did occur (we pray one never does). 

Our Never’s:

·     Credit card debt: We have never had credit card debt. We have always paid off our cards each and every month. Have you seen those interest rates?!?!

This may not seem like a ton of debt, but we are both in our 20’s. That seems like pretty extensive money stuff (debt paid off and current debt) for our age.

What debt did you (or do you currently) aquire in your 20’s?

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