Debt

[Ostinato Rubato]

Bad marriages = bad divorces = debt.

Still wouldn't change it for the world. The old adage "It's cheaper to keep her" doesn't factor in the cost on overall quality of life i.e. stress, addictions, ulcers, hypertension, jail times, murder suicides, etc.

Congrats Frets! If you were me I'd be moving the fuck out of CA to some place where retirement won't look like living like a near-poor person while living near growing homeless encampments. Flap wings free bird!

[fretless]

Thanks man yeah it's unsustainable but for us it's still fun for now and shit is going as planned . We don't have kids and we are not tied down to anything .

[Dave]

Credit card debt sucks. However there are various categories of debt and each has it's own unique circumstances.

I use my Amex platinum for all daily spending so I can earn rewards and it's a charge card so pay in full each month is the only option. If you have the discipline to stick to a budget Amex is the only way to go, and I don't mean their bullshit credit card products. Green/Gold/Platinum, pick the one that meets your needs the best. We have various other credit cards just for the cash back at places that don't take Amex like Costco and those are paid off each month as well. I maintain a spreadsheet of the best cards to use for each type of spend each quarter. We are militant in sticking to this.

Promo deals for large purchases are another way to take advantage of cheap money right now. Why pay cash when 0% is offered? This doesn't mean go buy crap because the monthly payments are cheap, but if the purchase was planned and budgeted, and the store offers 0% go for it. Keep the money in the market to earn more money. Always keep the money accessible.

Car loans are so stupid cheap right now it doesn't make sense to pay cash for cars. We financed about 1/2 the new Jeep because it's simply more beneficial to keep the money in the market. The Lexus was traded in to lower the tax liability of the new Jeep otherwise we would have sold it 3rd party and financed the whole Jeep. Never take this advice to mean buy more car than one can afford simply because monthly payments. Always keep the cash on hand to payoff in the event things go sideways.

Mortgages are in the same boat. Always keep the max cash on hand. Outlay the bare minimum to get the best rate, and invest the rest. If one doesn't have the assets to payoff the whole balance in a crisis, at least ensure significant equity to be able to get out of the house in the event something bad happens.


tl;dr don't go full Dave Ramsey but be smart

[Dave]

Thanks man yeah it's unsustainable but for us it's still fun for now and shit is going as planned . We don't have kids and we are not tied down to anything .

I don't understand how DINKs have any credit card debt. Ever.

[Telephant]

I just paid off the little CC debt I had. Ordering Ak left and right earlier this year. No ragerts.

[GuitarBilly]

Credit card debt sucks. However there are various categories of debt and each has it's own unique circumstances.

I use my Amex platinum for all daily spending so I can earn rewards and it's a charge card so pay in full each month is the only option. If you have the discipline to stick to a budget Amex is the only way to go, and I don't mean their bullshit credit card products. Green/Gold/Platinum, pick the one that meets your needs the best. We have various other credit cards just for the cash back at places that don't take Amex like Costco and those are paid off each month as well.

I agree with you but if you're paying your credit cards off every month, you're not really using credit. You're just adding one more step to cash payments so you can get the card rewards. That's a great way to do things but completely different than incurring debt.

[Dave]

Credit card debt sucks. However there are various categories of debt and each has it's own unique circumstances.

I use my Amex platinum for all daily spending so I can earn rewards and it's a charge card so pay in full each month is the only option. If you have the discipline to stick to a budget Amex is the only way to go, and I don't mean their bullshit credit card products. Green/Gold/Platinum, pick the one that meets your needs the best. We have various other credit cards just for the cash back at places that don't take Amex like Costco and those are paid off each month as well.

I agree with you but if you're paying your credit cards off every month, you're not really using credit. You're just adding one more step to cash payments so you can get the card rewards. That's a great way to do things but completely different than incurring debt.

I always hear that but don't necessarily agree. I let all my balances report when the statement cuts, and pay them before the due date. The bureau shows I have a balance, it gets paid before the interest starts, and all is good.

Some people pay the card off before the issuer reports it to the bureau but that doesn't really help. Not only does it lead to a $0 balance being reported to the bureaus, which is the issue you're talking about above, but it can lead to one's account being flagged for credit cycling. People with low limit cards will pay them off several times a month to put more spend through the card than their risk departments have deemed fit. Paying before the statement cuts can trigger that flag even for people that are just trying to pay as they go.

The key here is to have way more credit than one will ever need. It's wise to have at least 5-6x as much available credit than will be used in a given month. I never have more than 1-2% utilization showing and the Amex charge cards don't count against utilization at all since they're not a revolving account like a credit line.



Anyway I think I went way off topic, but yeah using charge/credit cards how I do is not using debt. It's insulating my bank accounts/cash from fraud/hackers/etc by using other people's money up front. The other things I listed in my post were the ways to effectively use debt. Real estate, sometimes auto, promo financing, etc.

[ajaxlepinski]

I haven't shopped for a credit card in a while so, I'm not sure which card is best.
The g/f and I have the clear, Amex Everyday Card which has no annual fee and you get 20% more points if you have 20+ transactions per month. I rarely use cash... except to buy lottery tickets so, I always get the bonus points.
We make sure we pay it all off each month because, the late fees reduce the value of your points fast.
Delta lets you transfer all your points into SkyMiles and is an excellent value.
From what I understand, using reward points for air travel is a better value than redeeming for cash.
It takes each of us about two years to save enough points to get two plane tickets to Rome (from New York).
At this point in my life, I'm sick of traveling but, the g/f isn't!

[fretless]

queues Breaking the chains...

[GuitarBilly]

Credit card debt sucks. However there are various categories of debt and each has it's own unique circumstances.

I use my Amex platinum for all daily spending so I can earn rewards and it's a charge card so pay in full each month is the only option. If you have the discipline to stick to a budget Amex is the only way to go, and I don't mean their bullshit credit card products. Green/Gold/Platinum, pick the one that meets your needs the best. We have various other credit cards just for the cash back at places that don't take Amex like Costco and those are paid off each month as well.

I agree with you but if you're paying your credit cards off every month, you're not really using credit. You're just adding one more step to cash payments so you can get the card rewards. That's a great way to do things but completely different than incurring debt.

I always hear that but don't necessarily agree. I let all my balances report when the statement cuts, and pay them before the due date. The bureau shows I have a balance, it gets paid before the interest starts, and all is good.

Some people pay the card off before the issuer reports it to the bureau but that doesn't really help. Not only does it lead to a $0 balance being reported to the bureaus, which is the issue you're talking about above, but it can lead to one's account being flagged for credit cycling. People with low limit cards will pay them off several times a month to put more spend through the card than their risk departments have deemed fit. Paying before the statement cuts can trigger that flag even for people that are just trying to pay as they go.

The key here is to have way more credit than one will ever need. It's wise to have at least 5-6x as much available credit than will be used in a given month. I never have more than 1-2% utilization showing and the Amex charge cards don't count against utilization at all since they're not a revolving account like a credit line.



Anyway I think I went way off topic, but yeah using charge/credit cards how I do is not using debt. It's insulating my bank accounts/cash from fraud/hackers/etc by using other people's money up front. The other things I listed in my post were the ways to effectively use debt. Real estate, sometimes auto, promo financing, etc.

yeah no argument there, that's a good way to do it. I also agree that car loans and mortgage are a different thing altogether.

When I think of debt I usually think of people running credit to live well beyond their means. Some of them even actually make good money but have no control whatsoever. And man, I know a lot of people like that.

IIRC you're a financial pro so it's not surprising you have a really good handle on that stuff.

[madkeithv]

Slightly different sitch here in Belgium. For one thing, credit ratings don't exist here, and credit cards aren't much of a thing.

However, only 4-ish years ago I lived in the UK with a perfect credit rating, fairly expensive mortgage and two cars on payments. Brexit triggered a move to Belgium, where we decided to move to a much cheaper area for housing. We actually made a more-than-decent profit on our UK house, so now we have no mortgage, no car payments, and two or three years worth of cost-of-living sitting in investments. We decided to get very used cars "initially" while we settled here, but with the COVID lockdowns both of them have been serving us just fine.

I am eyeing up a new mortgage in the future (1-2 years) so we can turn part of our house (about 2/3rds of it is unused/old farm barns) into a holiday home that my wife can run for her own income. It's great to really not have to worry about the day to day at all, only thinking about investments towards our future.

[GuitarBilly]

I'm a big proponent of getting used cash cars, if you know how to buy used, reliable vehicles. $5-7k is usually the sweet spot for me to get something reliable with no payments.
But I'm not a car person to begin with and I've been working for home for over 10 years so it's easy for me to say. I literally drive about 3k miles/year. So it's pretty minimal.

So I completely understand why people with daily commutes, young kids etc would want/need a new car and I'm not one to look down on that. And as Dave correctly pointed out, car loans are very cheap these days.
I don't really see car payments as "incurring debt". It's more like a part of your monthly overhead. Same with mortgage payments, utilities etc..

[madkeithv]

I'm a big proponent of getting used cash cars, if you know how to buy used, reliable vehicles. $5-7k is usually the sweet spot for me to get something reliable with no payments.
But I'm not a car person to begin with and I've been working for home for over 10 years so it's easy for me to say. I literally drive about 3k miles/year. So it's pretty minimal.

So I completely understand why people with daily commutes, young kids etc would want/need a new car and I'm not one to look down on that. And as Dave correctly pointed out, car loans are very cheap these days.
I don't really see car payments as "incurring debt". It's more like a part of your monthly overhead. Same with mortgage payments, utilities etc..

Totally agreed - I'm the same, I've been working from home for 7 years, the only time I did significant distances was when visiting family in the UK. "My" car is over 10 years old, and cost me less than $3000. My wife's is newer, and was around $7000, better for the kids and dog. Both cars will serve, and if one of them is out of service we can use the other one, because neither me or my wife need to be anywhere else most of the time.
That's not the most common situation, I know. I do the occasional commute to my job, and that's a fair drive (2hrs one way), but as long as the damn thing keeps running and I don't die (AC isn't working, would cost more to repair than the car's worth), I'm fine with it.

When we did have car payments we got hosed in the move because early termination was a huge, huge money sink for no good reason. We couldn't keep the cars, we could not get them on the road legally in Belgium, but the finance situation was basically "haha lol you have to buy the car outright and hope you can sell it privately". Again, not the most common situation, I basically ended up losing over GBP10.000 with my car sitting unsold in a used car lot for over a year.

But for our specific situation, we thought about it, and settled on the new thing. That has paid for itself in just two years, and our monthly overheads are ridiculously low. Now that all gets used for improving the house, it's over 100 years old and it shows.

If I was commuting every day, I'd have a company car. Partially tax deductible, no insurance worries, decent aircon and sound system. That day may yet come. But for now, no reason for me to have a very expensive, fast sofa sitting unused outside my front door, is there.

[Dave]

The Costco visa is my main alternative to my platinum Amex. 4% back on gas is huge when one drives a lot

[Dave]

The difference really adds up

And the Costco visa gas rewards are good at all gas stations.

The Amazon prime visa is equally as good and the two are some of the best no annual fee cards around.

[fretless]

first time I've had some serious ducats in the bank in .. forever . It's a strange feeling to be looking past all that debt into the clear blue..

[IndyWS6]

On a related note, I hit my max allowable 401K contributions for the year with this paycheck. Woo Hoo!

Now I need to figure out some strategies for the extra $$ each month since it will be after-tax...

[VTM]

On a related note, I hit my max allowable 401K contributions for the year with this paycheck. Woo Hoo!

Now I need to figure out some strategies for the extra $$ each month since it will be after-tax...

Invest in a Henning Cherry Bomb.

[IndyWS6]

On a related note, I hit my max allowable 401K contributions for the year with this paycheck. Woo Hoo!

Now I need to figure out some strategies for the extra $$ each month since it will be after-tax...

Invest in a Henning Cherry Bomb.

I'm well-stocked on guitar gear. Honestly, over-invested considering my skill level

Focusing on retirement security

[Chris Z]

Paid off all my debt last month, no outstanding balances anywhere!





Got a bill for hospital covid stay after insurance for $5500 the week after.

[fretless]

oh hell

[darthcon]

Being debt-free is a great achievement! The feeling of having that weight lifted off your shoulders is incomparable.

Back in 2021, I ran into a massive hiccup with my truck company. We had accumulated debts from multiple vendors, leases on trucks, and the overhead was just mounting with reduced inflows due to market dynamics. The solution for me was to file for bankruptcy, and after two years, I'm finally debt-free.

I worked with this attorney for bankruptcy in San Diego. He helped me in figuring out what assets to protect, which debts could be renegotiated, and what paperwork was crucial. Without legal help, I was still in debt nowadays.

[fretless]

Well that all changed but I’m in a great place these day. Working, playing, its all really awesome. Hope y’all are happy and living it up. Cheers

[ajaxlepinski]

College tuition is absolutely insane these days!!!
When I started at the State University of NY at Buffalo in 1978. tuition was $450 a semester and dorm (with three squares a day) was $500 a semester = $950 x 8 = a BS Degree for $7600.00
In 2006, nephew graduated with a BS at at New York University in in NYC (tuition and dorm) for $140,000!!!

[Landshark]

I have no debt and my credit card gets paid in full every month. Life is easier without debt.

Right there with ya good buddy.

same, and i'd like to retire in a couple years.

its just scary that when you go out to eat, a $15 hamburger is the norm now. wtf