Where Do People Have the Most Debt?

**jediab** · 02-07-2011, 10:55 AM

Originally Posted by lacarnut

Getting out of debt increases your happiness factor by a 1000%.

QFT

**Phillygirl** · 02-07-2011, 11:03 AM

Originally Posted by Tecate

I've been completely debt free for a little over 5 years now.

Something weird happens when you reach that point, especially after carrying debt for a long time. It caused me to start saving money at a rate I never thought imaginable.

Yep. It's nearly impossible to save for retirement if all your spare money is going to pay down debt. I'm not debt free, as I still carry a mortgage...my accountant freaks out every time I mention paying it off because of the tax issue. But other than that I have no debt. Cars seem to be a debt that people get themselves in trouble...they keep trading in when they still owe money on the loan, so they never really get ahead with it. I haven't had a car loan in 10 years. I don't see the point in it. If I can't afford to buy a car for cash, then I can't afford the car.

**Gingersnap** · 02-07-2011, 11:22 AM

That's the right attitude about cars. Dave Ramsey is forever trying to convince people that cars aren't important aside from transportation.

**linda22003** · 02-07-2011, 11:29 AM

Originally Posted by Phillygirl

Yep. It's nearly impossible to save for retirement if all your spare money is going to pay down debt. I'm not debt free, as I still carry a mortgage...my accountant freaks out every time I mention paying it off because of the tax issue.

Yep, our financial guy wants us to keep the mortgage too, because we have a 4.5% rate. Dave Ramsey has a good formula on why NOT to keep a mortgage - the amount you send in payments far outweighs the amount of tax you'd be paying without the mortgage deduction.

Any car I've owned has been paid for in cash on day one.

**SaintLouieWoman** · 02-07-2011, 12:28 PM

Originally Posted by linda22003

Yep, our financial guy wants us to keep the mortgage too, because we have a 4.5% rate. Dave Ramsey has a good formula on why NOT to keep a mortgage - the amount you send in payments far outweighs the amount of tax you'd be paying without the mortgage deduction.

Any car I've owned has been paid for in cash on day one.

Same here. I've never had a payment book. I didn't rest til I paid off my first house that I owned on my own. I also figured that the savings on payments on a home far exceed the tax credit. It's worth my piece of mind to know that I'll have a place to stay (unless I don't pay my taxes) and a method of transportation. Other expenses can usually be adjusted in case of a downturn.

**Phillygirl** · 02-07-2011, 12:33 PM

Originally Posted by linda22003

Yep, our financial guy wants us to keep the mortgage too, because we have a 4.5% rate. Dave Ramsey has a good formula on why NOT to keep a mortgage - the amount you send in payments far outweighs the amount of tax you'd be paying without the mortgage deduction.

Any car I've owned has been paid for in cash on day one.

Yeah, I try to make that argument with my accountant, but my investments have been doing pretty well, and I definitely get more back in the investments at this point. Mostly I'm just always afraid of being cash poor. But each year I look at the statement and say "I should just pay the damn thing off". Maybe this year. The taxes I pay are equal to the interest deduction I get, so at this point the interest writeoff is probably not all that worth it.

**Phillygirl** · 02-07-2011, 12:34 PM

Originally Posted by Gingersnap

That's the right attitude about cars. Dave Ramsey is forever trying to convince people that cars aren't important aside from transportation.

I'm constantly amazed at the people that come in my office with tales of financial woe driving cars that cost them over $600 a month. To me, that's the first expense that should go.

**lacarnut** · 02-07-2011, 12:50 PM

Originally Posted by linda22003

Yep, our financial guy wants us to keep the mortgage too, because we have a 4.5% rate. Dave Ramsey has a good formula on why NOT to keep a mortgage - the amount you send in payments far outweighs the amount of tax you'd be paying without the mortgage deduction.

Any car I've owned has been paid for in cash on day one.

Dave is correct about paying off the mortgage early. Saving is contagious...the more you save, the more you want to save. Paying taxes to the IRS is just a fact of life. Even taking up residence in a foreign country does not remove you from the long arm of Uncle Sam's taxing machine. The US is the only country in the world that has this tax policy.

I bought a new car coming up on 2 years and probably will buy another sports car for cash this year. I get a great deal of pleasure from driving. Buying expensive jewelry like a Rolex watch or a ring does not do anything for me. Having a fine car does. Different strokes for different folks.

Old Dave was certainly wrong about the gold, silver and commodities market. Although, his advise on being debt free was spot on.