What is 'your' definition of Debt-free? This is our situation. A financial question.
Hello, and Happy Thursday to everyone.. For starter I just want to say I know this section of the forum is title "Financial problems in marriage". We Don't have a financial problem, I just have a financial question. I think it go here because it financial related, my apology if I posted it in the wrong section of the forum.
I'm sorry for the longgg post ahead, but there is a financial question I want to ask. Not expect anyone make it through reading it since my post it so long, but I really appreciate it if anyone can help answer my question. Thank you so much.
So, on a mommie-baby site that I'm a frequent poster on CafeMom (it a community forum for mommies, pregnancy, women who TTC, etc.. where women talk to other women for advice and support). There is a thread where a poster aksed if there anyone in there who not have any debt, and asked what Debt-free is to everyone.. Alot of ladies in there replies, pretty much posters there share about their financial situation whether they have debt or not, and exchanged their viewpoint of what to them is the meaning of Debt-free.
So me as a regular poster in there, I replied in that thread too. I might not be a very bright girl, but I think I know what Debt-free mean.. Please try to read it to the end in order to get a clear picture of the question I'm trying to ask.
So this is my replied in that thread:
[[ We Debt-free, zero debt. No student loans debt, we never have school debt. No credit cards debt. No medical debt.. Cars are paid off, long paid off. I mean we have insurance, but both our cars his and mine are paid off.
Rent and All bills are pay on time early every month way before the due date; once we get the bills we pay it right away mail out the payment the next day.. Credit card bills, same thing. Mail out payment next day way early before the due date. We have excellent/perfect credit scores.
Our credit card bills is just what we use charge with our credit cards for that month, and once we get the bill we mail out the check right away next day pay it off. Never once we own credit cards a penny, let alone own a dollar.
Everything, Rent and all bills including credit cards bills are all pay on time way early every month actually. Never once we have a late payment, let alone a missed payment.
My husband make decent income, he make 100K a year (money don't fall down from the sky. He has to work long hours in order to make that income. But he has No difficulty of bring in 100K income a year).. Despite we live in a HCOL state California, but life is comfy for us due to we both Debt-free. And we both are not big spender.
He very responsible with money, he work hard to secure for our future. To make sure we always be in a comfortable fiancial position.
His checking account it just where he pays Rent and all bills; and he pays it all, I don't have to pay anything. (Yes, he has me as Joint on his checking account).
His life saving is not in his checking. It his saving accounts and his retirement accounts are where all his life saving money are at.
---He has two Saving accounts, and both accounts have more than decent saving money in it save for emergency/rainy days. (Yes, he has me as Joint on both of his saving accounts).
---He has two 401k accounts and one IRA account saving for retirement, and all three has more than decent money retirement saving in it, especially his IRA account.. He prefers IRA, he used to have three 401k accounts but last time he roll one to his IRA. (Yes, he has me as the Primary beneficiary on all three of it).
---He has Life insurance, Health insurance. He has excellent/perfect credit scores.. Eventhough he has more than decent money in his Saving accounts and his 401k and IRA retirement accounts, he still want Life insurance just in case. He is a huge planner. (Yes, he has me as the Primary beneficiary on his Life insurance. And I'm on his Health insurance).
I'm a girl with only a High school diploma, No college degree. I work minimum wage jobs all my life, I make minimum wage. He on the other hand, make 100K a year. I told him repeatedly I don't want to be on any of his financial accounts (I understand our incomes difference, it alot).. But he adamant put me as Joint in all his bank accounts, and as Primary beneficiary on all his retirement accounts and Life insurance. I refused, he insists. I refused, he insists. I don't know what to do so I let him have it his ways.
We dislike debt. We never over spend. We budget everything.. Every month money go in what in what, we have everything budget lay out all and ready.
We do live BELOW our means. We rent in the lowest monthly rent place. No, we don't need to live in a high-end place with swimming pools and work out gyms and all that stuff, lol. we don't care those stuff.. I told my husband why pay the top expensive rent monthly when we can find a place with much lower/cheaper rent? It helps each month to add MORE money into your savings if we paying lower rent.
Perhaps I'm cheap, but to me having 'Cash' in our saving accounts is more important than live in a high-end place.. It not just money in Saving accounts, it also money in 401k and IRA retirement too, the more retirement savings we have the better we be in our old age.
'Cash' in our saving accounts is still count as an asset right? Liquid form of asset.
Also retirement savings in our 401k and IRA accounts are also assets right?
No, we personally don't want to own a home in California. Anyone who live in California know how expensive it is to buy a house here.. Same with New York. You talking about two HIGHEST cost of living states in the U.S., and the highest home prices too.
We don't want to buy a house in California because we not staying in this state till the day we die. We thinking of relocate to Georgia (where my husband mom side of the family all are at), perhaps we buy a house there in Georgia, we just want to buy a condo or townhouse.. It just never was a 'must need/must have' to us own a house in this HCOL state California and the house prices here are ridiculously high.
Why buy a house in ridiculous high price California when houses in the South are at a much lower price?
Anyways, I'm very frugal. I'm a coupon person; I cut coupons, I save coupons, I use coupons.. I save every dollar as I can.
My husband make 100K a year and I'm here cutting coupons out of weekly grocery ads, lol.. even coupons like buy one get one half off, or .75 cents off I still cut out use and save.
I'm not a huge planner like my husband, but I'm frugal.
Is Debt-free and making 100K a year income comfy to others? Probably not, but to us it comfy. And being Debt-free sure help alot.. And what added further to the help it our lifestyle, we both are not big spender and we live Below our means. We hate debt, so our goal is lifetime Debt-free.
oh, and our age.. I'm 31, I'll be turning 32 soon. My husband he a year younger than me; he 30 (just turn 31 few months ago). ]]
okay, so that is the financial situation of me and my husband, I considered we are Debt-free. Perhaps my definition of what Debt-free is is different from others, but to me I think we Debt-free.
BUT then there is a replied from a poster, she quote me and she said that is Not Debt-free.. okay, she got me confused and I second think question what really Debt-free is then?
This is her replied, I cut and paste what she wrote to me in CafeMom to here: [[[ You pay rent every month. I don't view that as debt-free, it's akin to having a mortgage. One that you'll never pay off. ]]]
So by her quote above replied to me, and her viewpoint of what Debt-free is. Me and my husband we not Debt-free Solely because we pay 'Rent'.. But we rent in the lowest monthly rent place, so we can have More money save added to our savings and retirement. Our rent is way low compared to my husband income. I don't see how can our rent is considered our debt? We don't own rent a penny, once we get the rent bill, we sign a check immediately mail out next day pay it.
IF by her definition what she wrote (in the blue bold bracket), nobody is Debt-free then unless they born with a silver spoon in their mouth.. Because those who rent, whether it high or low rent they have to pay monthly Rent. If not rent, then those who buy house, whether it high or low monthly mortgage payment, they still have to pay Mortgage.
Then by her definition, nobody is Debt-free then (since we have to pay Rent or Mortgage).
So my question is, do you agree with what that poster said (her quote in blue bracket above)--her definition of Debt-free? According to our situation above, we Debt-free to me. Am I thinking Debt-free definition wrong here?
Yes, I'm an easily confuse girl, and right now I'm confuse. That poster she throw me off. So what is really Debt-free then? What is 'your' definition of Debt-free?
Last edited by jasmine31; 01-25-2017 at 12:21 PM.