I Want to be Debt Free Because...

Complete this sentence:

  

What is your number one motivation? How do you regularly remind yourself and keep your priorities straight?

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  • I want to have more money available to invest in my future so I don't have to worry about retirement and to spend on fun things for myself and others.

    Like 6
  • I really want to teach my kids that delaying gratification by saving up is often the better choice. That they can afford anything, but not everything. 

     
    I like to add a note to my month at the top of YNAB that has a phrase or one word reminder of what I want to focus on. 

    Like 7
  • I started YNAB because I want to be a better steward of our money.  We are cognizant of our financial privilege and want to make good choices for our future and for our children's future.

    Like 4
  • Bottom line is because most debt is dumb! You're paying for something with money you don't have usually at ridiculous interest rates. Notice how I qualified that statement with "most"? On the other hand, I have no interest (no pun intended) in paying off my rather large (because So Cal) 3.25% mortgage. I'd rather have cash on hand (at less than 1% difference in savings) and even futher out funds in investments at what should be a higher rate over time.

    Like 2
    • Ben
    • Toolkit for YNAB Designer & Developer
    • furiousfalcon
    • 1 yr ago
    • 4
    • Reported - view

    I'd like to be debt free because I don't like other people making my financial decisions for me (well, as much as feasible?)

    Like 4
  • I'm good with my 3.125% mortgage. I'm choosing to invest instead.

    Like 2
      • mamster
      • mamster
      • 1 yr ago
      • Reported - view

      nolesrule The thing I always wonder about this (and I'm sure you've thought this through) is: how do you know you've borrowed the right amount? Like, at what point do you decide that you've deleveraged too much and—interest rates allowing—it's time to refinance in order to borrow more capital for investing?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 3
      • Reported - view

      mamster I don't borrow to invest. I borrow to buy a house. I choose not to accelerate paying off the loan in order to invest. I know didn't buy too much house because our PITI is significantly less than the standard ratios they tell you you can afford. 😉

      Like 3
      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 1 yr ago
      • 7
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      nolesrule 

      I laughed when I heard how much of a mortgage they thought we could afford.  Sure, we could pay that amount but I'd like to be able to eat as well. 

      Like 7
      • Ben
      • Toolkit for YNAB Designer & Developer
      • furiousfalcon
      • 1 yr ago
      • 1
      • Reported - view

      Technicolor Cheetah We ran into the same issue last year when it came time for a new (to us) car for my wife. Everything was discussed in terms of monthly payment cost, not the length of the loan... It was a little crazy the sort of deal they were pushing us towards.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 1
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      Technicolor Cheetah Yeah, it's absurd. I plug our numbers into affordability calculators and they all say we could buy a house about 3x as expensive as what we currently have.

      Like 1
      • QC
      • HaplessFinanceProfessional
      • Queenofcoin
      • 1 yr ago
      • Reported - view

      nolesrule Absurd is right, as a single looking to buy current calculators tell me I can afford something more than double what I bought as part of a couple.  

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      In 12 days I'll be good with my 2.625% mortgage refinance.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      nolesrule Do you mind me asking the terms and cost?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • Reported - view

      Superbone I don't mind.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      nolesrule You know what? I thought about that possible response. Sigh...

      What were the terms and cost?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      Superbone 15 year  2.625%. No points, no credit. About $2300 in costs. That's coming down from 20 year 3.5% (we moved since my original post, and we're 7 payments into the new mortgage). It'll take about 11 months to recoup the costs, but we'll save $40k against our current payment with extra we've been making  or $50k against the original payment amount.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      nolesrule Nice! Although, I was afraid you were going to say a 15 year term. In my HCOL area with my too expensive home, I just can’t justify halving my term. It would eat up half of my monthly taxable investing funds! I can’t complain though at 3.25% but I’m always looking for that extra edge.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • Reported - view

      Superbone right now isn't a good time. Rates went back up because of the demand. As things slow down again it might be possible for the rates to come back down. We locked back on March 10 just before the SHTF.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      nolesrule I actually had a friend lock in a 15 year, 2.6% rate yesterday. Apparently, the rates dipped that particular day. But, yeah. I'll keep my ears open and try to take advantage if/when appropriate.

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  • ... it offends me to think about paying interest to a bank simply because I cannot manage my budget properly.

    (We're already debt free except for a low-interest mortgage, which we keep by choice. I'm very aware that we're lucky to have a good income and have not suffered from life-altering calamities or illness.)

    Like 4
  • I want to be able to stay home and raise our family, and living on one income is much more difficult to wrangle with debt payments.  It will be hard enough without, I'm sure, since that is not the norm.  Perhaps this is only a pipe dream (I know life throws unexpected twists in the rope, and everyone does the best with what we've got), but I hope it works out. 

    Like 5
  • I had a friend who said, "I am heavily investing in my past." Obviously he was joking about being in debt, but really, I'd much rather be investing in my future than in my past.

     when you're paying for past mistakes and paying for interest on top of that, it really reduces the options you have for your money.

    Like 11
  • I want to be debt-free because I want to have more options in the future.

    Like 3
    • QC
    • HaplessFinanceProfessional
    • Queenofcoin
    • 1 yr ago
    • 5
    • Reported - view

    I want to be debt-free because I don't want to work today for something I bought last month and forgot about after a week!  I want to be debt free because the choices I make today affect the kind of future I have.  I want to be debt free because every hour of every day is mine, not the bank's or the store's or the finance company's....mine!

    Like 5
  • Made me look.  A similar question was posed on a forum I was following in 2006, and at that time (over a year before I found YNAB), I wrote this:

    The top three reasons I want to have no debt:

    1) Security
    2) Security
    3) Security

    Let's examine these reasons in a bit more detail.

    First, there's security. There is no such thing as job security in today's world. I am blessed with a job that pays me well. If this job were to go away, I would have some trouble finding a job that pays as much. Having no debt means that I could consider jobs that pay significantly less if my current employer goes out of business or decides they no longer need my department. 

    Second, there's security. I hope to retire, although I don't expect to retire early. Having a big pile of savings and no debt is security in retirement. Debt is anti-savings, required cash flow, and in general risk and insecurity. In and of itself, that's a reason to not carry consumer debt.

    Finally, there's security. Like many other people, I find that there are aspects of my job that I don't like. I'd really like to have a big enough pile of F-U money that it doesn't matter whether I tell my employer what to do. Having consumer debt is contrary to having F-U money, and also requires me to have a higher income in order to service the debt. Being able to live off much less than I am paid, and having a big F-U fund to tide me over until I find other work, is being secure in the knowledge that even though I may take the BS at work, I don't have to. If I'm willing to pay the price, I can go do something else. This knowledge makes work a lot more tolerable.

    Carrying large quantities of consumer debt is incompatible with security, undermines future security, and doesn't go well with security.

    That's my story and I'm sticking to it.

     What's happened since then?  I found YNAB when I was experiencing a perfect storm of financial changes.  It exceeded my initial goal of getting me through that storm while avoiding dis-saving.  In 2016, when I was 60 years old, my employer changed working conditions in a way that annoyed me.  I looked, and found that I had enough F-U money.  So I retired.

    Investing well was part of what made early retirement work a decade after I thought it would be impossible.  Another big part of it was finding YNAB, and learning to avoid spending that wasn't important to me.  That part enabled me to throw more money at investing and retirement savings than I would have without a budget.

    The current YNAB sound track is very heavily focused on the situation of being broke and just needing to get ahead of the paycheck to paycheck cycle; I was blessed to find YNAB at a time when it preached Living on Last Month's Income and clarity of how much money is accumulated for what purpose.  Those principles are still very valuable to me in retirement.

    I still have no debt, as defined by most people.  In nYNAB terms, I continually have debt consisting of current cycle credit card charges.  Using a card to spend next month's income this month is a fool's game; but I'm quite happy spending last month's income this month, paying for it next month, and getting a dab of cash back from it the month after next.

    Like 11
      • QC
      • HaplessFinanceProfessional
      • Queenofcoin
      • 1 yr ago
      • 2
      • Reported - view

      Patzer As one who lives for the feeling of security I love your detailed look in to what it means to you.  Thanks so much for sharing.

      Like 2
  • I want to have some money in my checking account and I want to MOVE OUT of the crazy farm!!

    Like 5
    • Peter
    • Professional Designer, Web Developer
    • lasty
    • 1 yr ago
    • 2
    • Reported - view

    I want to be debt free because paying interest is just an unnecessary money sink

    Like 2
  • I want to be debt free because, in my mid-to-late 20's I made some stupid mistakes and I am still paying for them years later (I am 34 now).

    I want to be in complete control of my money instead of debts having first chunk of it and I get what's left., which quite frankly. most months.. isn't enough.

    And most important, I want to invest so I am not stuck working until 68 which is the new retirement age for civil service in the UK. 60 would do me fine, so I need money for that :) (will probably pop my clogs at 59!)

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  • I want to be debt free cos I want to be free.  Freedom for me is the ability to choose, if my money is tied up in debt payments, my number choices and opportunities are limited. The debt has then chosen for me.

    Like 5
  • I want to be debt free because I hate debt and this particular debt, from my divorce, is a psychological burden because I was debt free before the divorce.

    Like 3
    • PhysicsGal thanks for replying to this thread. I missed it 11 months ago. 
      I’ve combined Veronica ’s idea with  Patzer ’s reply of Security, Security, Security. I also added his reply to my home screen as I want to read it many more times

      Like
  • I want to be debt free because... I'm tired of being afraid. Afraid I won't have enough to retire. I come from a poor family. The vast majority of my family will work until the day they die. That isn't inherently bad, but they don't do it because it is a hobby or in a field they love, they have to do it to make end meet. I don't want to become complacent and just go through the motions for the rest of my life.

    Since starting YNAB I've been thinking about What I want my money to do for me. There lots of things I want, mostly electronics, but there are some things I need. I need to make memories, I need to experience all the world has to offer. The airfare, hotel, and food money are really the bare minimum I need to experience the world and while I may not have the means to travel this year I do plan to budget for it in the near future.

    Like 3
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