Are you debt averse?

divillybit

In this day and age being in debt is a necessary evil for the average working person but its avoidable too, including mortgage debt. I'm debt averse, as due to my circumstances I was raised on half nothing but with a strong work ethic and it has stood to me. I guess I appreciated the money and things I had because I worked for it and never got anything handed to me on a plate. I recognise that mortgage debt is a necessity for many but repayments on smaller loans can really be expensive. Im in the fortunate position that I dont worry about money, I'm far from being well off I can assure you but I'm in my mid 30's and own my own car and house outright. And I would be a worrier by nature. I dont like owing people money. So for my wellbing both financially and health wise being debt averse has worked well for me. Hearing a friend complain about his credit card debt got me thinking about this. He's on a good wage but always seems to be skint.

Hande hoche!

"neither a borrower nor a lender be".

dxhound2005

"For loan oft loses both itself and friend".

spurious

The nuns beat the evils of 'tick' into me early.
If I can't afford it, I can't have it. If I really want it, then I will have to save up.
I don't owe anyone anything. Even the credit card company never get any interest off me.

ytpe2r5bxkn0c1

Apart from a modest mortgage I have never has any loans. Like the OP, we had not much growing up and were taught to save for things. So, never a loan but save up for whatever was needed.

bee06

I’m totally debt averse. The “only” debt I have is the mortgage on my house and we are working to pay this off asap. I always pay my credit card bill off in full every month and have never taken out a loan. I don’t even like borrowing 2 Euro off someone. My motto is if I can’t afford to buy something with my own money I don’t buy it until I can afford it.

Dr Crayfish

Small mortgage bought before the latest boom. No debts or credit cards. Get in line ladies!

GLaDOS

Never had a loan myself, dont even have a credit card. Need to get one to build up a credit score because using a debit card responsibly counts for nothing.

Mint Sauce

Other than the mortgage, and the occasional small amount on the Credit Card, thats it.

ytpe2r5bxkn0c1

GLaDOS wrote: »

Never had a loan myself, dont even have a credit card. Need to get one to build up a credit score because using a debit card responsibly counts for nothing.

You don't need to have a credit score, from the likes of CC usage, in this country.

GLaDOS

Zachariah Round Dewdrop wrote: »

You don't need to have a credit score, from the likes of CC usage, in this country.

Really? Ive been told otherwise, but I'm pretty ignorant about it!

Zachariah Round Dewdrop

Zachariah Round Dewdrop wrote: »

You don't need to have a credit score, from the likes of CC usage, in this country.

I have no debt yet I was turned down by DFS for an interest free loan because I basically don’t exist on the credit scoring system.

elperello

I have found that financial conservatism is one of the building blocks for a happy life.

It is only one however. You need to work at other stuff as well.

theteal

Why spend my money when I can spend the banks?

For the last 5 or so years I've picked up a new credit card each year for some large purchases e.g. car insurance, electronics, furniture etc.
Most cards come with 12 - 15 months interest free on purchases. Make the purchase, pay it off within the time frame while still adding to my own savings lump. It takes a bit of management and discipline but it's free money while leaving the rainy day fund untouched.

I'll be drawing down a mortgage soon, that's a bit scary.

RayM

I'm totally debt averse. I've never borrowed anything and I'd sooner rent for life than borrow several hundred thousand to buy a house. I've always been more of a saver than a spender.

padd b1975

I have a large but manageable mortgage, no loans or anything owed on the credit card.

If I want to upgrade the car or apartment I rent out a couple of rooms for a year or so beforehand.

arayess

RayM wrote: »

I've never borrowed anything and I'd sooner rent for life than borrow several hundred thousand to buy a house.

sounds like you are a monk

spurious

Aegir wrote: »

I have no debt yet I was turned down by DFS for an interest free loan because I basically don’t exist on the credit scoring system.

When I moved bank I ran into this problem too. There must not be many of us with no debt.

Lia_lia

I'd be similar to you, OP. I did have a car loan once but paid it off within about three months. I had the money saved anyway but thought I'd prefer to keep the saved money and spread the payments for the car. Just hated seeing the money coming out of my account every month so paid it off.

Never had a loan since. Will probably end up with a mortgage alright (renting now) but plan to put down a pretty big deposit and overpay as much as I can to get it paid off sooner.

arayess

i have a mortgage but otherwise no debts
no loan , credit cards or overdraft



credit is enslavement...

I understand for business but regular man - f that

tayto lover

I own my house and car too.
I took out CU loans for my kids college education as they didn't qualify for any grants. I will have them paid off at the end of 2018 thankfully.
I have a very small and manageable loan for house repair which will end in 2 years.
Then I intend taking lots of holidays to the sun.

RayM

arayess wrote: »

sounds like you are a monk

Not quite, but I'd rather live like one while saving for a car or a holiday or whatever than take out a loan.

RayM

I’ve no debts, never even accrued interest on my credit card.

RayM wrote: »

I'm totally debt averse. I've never borrowed anything and I'd sooner rent for life than borrow several hundred thousand to buy a house. I've always been more of a saver than a spender.

I used to think as you do but being kicked out of my apartment rental after 6 years has driven me towards looking to buy. There’s just no security for renters in this country.

judeboy101

I always buy my cars in cash and slip the consultant an extra 50 when the need arises.

elperello

Karsini wrote: »

I’ve no debts, never even accrued interest on my credit card.


I used to think as you do but being kicked out of my apartment rental after 6 years has driven me towards looking to buy. There’s just no security for renters in this country.

Renting is a broken system for renters and landlords in Ireland.

I expect it will change in time but I wouldn't bet my future peace of mind on it.

When you don't have the earning power to pay the rent you will need a plan.

dxhound2005

elperello wrote: »

Renting is a broken system for renters and landlords in Ireland.

I expect it will change in time but I wouldn't bet my future peace of mind on it.

When you don't have the earning power to pay the rent you will need a plan.

No evidence of a broken system. In fact it is getting ever bigger.

https://www.businessworld.ie/news-from-ireland/Record-number-of-people-renting-in-Ireland-569895.html

LirW

Do not fully agree on the home improvement thing.

We got a home improvement loan, we bought the house cash and it needed work. We effectively improved the value of the house by updating the wiring and plumbing and fixed a few problems that would turn the majority of buyers off.
Absolutely worth it.
If it's something that can really increase the value of the house, there's nothing wrong with it. The house didn't even have a working heating system and we fitted a zoned one with a high efficiency boiler.
But if that's only for a bathroom remodelling or a new kitchen, then I'd see it as an unnecessary burden.

Other than that loan, no debts. No credit card, no car loan, no anything.
Building up our rainy day fund in the new year because the house purchase and the renovation left us pretty much broke.

MilesMorales1

I never borrow a penny off anyone, and I'm close to paranoid about even the possibility of being in debt. When we were growing up my parents got all our stuff on finance, but the interest rate they were on was ****ing mental, 400% or something and they never paid it off, but they paid 30 pounds a week every week without fail for basically as long as I remember from my childhood. So I just avoid stuff on finance as a rule (dunno if a bill pay phone counts) or borrowing cash or whatever.

Agricola

Absolutely debt averse. Always saved for stuff. Parents had little growing up and never got in on credit cards or car loans or anything. Hated oweing money, everything had to be bought outright or do without it. It rubbed off on me and I'm still the same.

Paid back my credit card 100% every bill for years til I bought an expensive holiday with it once and dropped it to 50% repayments to make it easier. I'd rarely have more than a couple of hundred on it at any one time. Cars are always old and my own. Electronics, phones, I buy outright. I'm a sucker for a fancy new fangled TV every few years, I usually save most of the cost before buying.

Beasty

To me modest debt plus a mortgage which is backed by the underlying property value is fine, and allows people to manage their affairs reasonably efficiently. I first got into debt in my 20s, and by the time I was 30 I was measuring it by reference to how much of next year's salary I had spent. After that I became much more "regimented" in my approach to debt but it was probably another decade before I felt I was in "net credit" (although I did have a pension working for me in the background, I never really started valuing that until the last few years)

I paid off my final mortgage earlier this year, and could have done so a few years earlier, but as it was a tracker the interest I was paying was not much. I have not had any other debt for at least 10 years, paying off credit cards monthly and investing further into pensions and other investments. I'll probably retire around or just after 60 (not very far off now!) and should have plenty to maintain my quality of life as well as provide a start to adult life for my kids.

I've been fortunate in some ways, but equally I've always tried to keep my debt manageable, while investing for the future as I could.

Crea

We did have a lit of debt. We had loans and credit card debt. I reckon the whole amount came to around €30k. Slowly but surely over a number of years we paid it off. In the past month we paid off the last credit card and tgey all have been cancelled so now apart from our mortgage we have no debt. We will never have credit cards again. I have become a much better saver - my focus is buying when we have the money saved and not instant gratification.

thierry14

arayess wrote: »

sounds like you are a monk

I agree not paying rent or a mortgage is just silly

Not a way to live

I am mortgage free, debt free, no loans etc, bought house for cash in late twenties with savings, pretty happy with myself

Being debt averse has it down sides too, alot of opportunities pass you buy, investments, property, bargains etc

I am not against loans or a mortgage, just live within your means and they are very handy, I have taken a few variable 5k loans over the years when I had cash tied up and if you pay them off very quick, it's almost free money.

I will take a loan for a Tesla soon, its a depreciating asset, but life is short and we should enjoy.

RayM

thierry14 wrote: »

Not a way to live

Not a way that you would choose to live. That's not the same as "not a way to live".

Mountainsandh

Not a hope I'd get a loan for furniture or even a holiday. I buy old cars upfront every time and would hate a car loan.
The only debt I have is the mortgage.

My father was a banker, his job involved debt collecting among other things. He wasn't a bad guy and it broke him. He warned us against debt and was very cautious himself obviously, so as an adult it is something that I would avoid at all costs.

I think health issues may be the only situation I'd tolerate any kind of debt (alongside mortgage), and even so I'd exhaust all other avenues before I'd resort to that.

thierry14

RayM wrote: »

Not a way that you would choose to live. That's not the same as "not a way to live".

That's true

listermint

I'd say alot in here are in the use a teabag ten times camp.


There's a difference between manageable credit and absolute fear of owning money.

divillybit

thierry14 wrote: »

I agree not paying rent or a mortgage is just silly

Not a way to live

I am mortgage free, debt free, no loans etc, bought house for cash in late twenties with savings, pretty happy with myself

Being debt averse has it down sides too, alot of opportunities pass you buy, investments, property, bargains etc

I am not against loans or a mortgage, just live within your means and they are very handy, I have taken a few variable 5k loans over the years when I had cash tied up and if you pay them off very quick, it's almost free money.

I will take a loan for a Tesla soon, its a depreciating asset, but life is short and we should enjoy.

Similarly to you thierry I bought my house at a young age and paid it off quickly. But the key was having the right mentality towards saving and putting it towards a home for myself.. there was many a time a felt like blowing a ball of my savings on a new car but kept focused on buying a good asset like a house that would stand to me and not a depreciating asset like a car. But alot of people aint good with managing their money. I had a few beers on me one night lately and let slip that I had paid off my house and I felt like my mates were resentful but feck them.

Borrowing money is a valuable tool and the fear some people have of it is bizarre to say the least.

Using up savings to buy things is terrible financial management for example, I would far prefer have a car loan and my savings than burn my savings to buy a car. By all means use some savings as part of the deposit etc but the financing the bulk is the smart way to do it. Spend the banks money.

Renting for life because you don't want a mortgage is worse, the amount of money it will cost you to rent for life compared to buying will be eye watering if you actually calculate it and that's before even considering how you will pay rent when retired, lack of stability, never being able to do things with the house etc etc.

cantdecide

I paid €100/ mth for three years for a pretty nice, mint, low mileage car that hasn't cost me anything other routine maintenance. I could afford the payment while working minimum wage. Meanwhile, my dad has an irrational fear of borrowing therefore drives a ropey and smelly old banger that robs him.

There's a lot of piety around debt and there are a lot of cash rich people who will extol the virtues of remaining debt free but there is a place for modest debt in our society in certain times and places. The vast majority of people with elective debt are doing so for strategic reasons, they have their eyes open about it and they have it under control.

TheChizler

Jadiel Muscular Sportsman wrote: »

Using up savings to buy things is terrible financial management for example, I would far prefer have a car loan and my savings than burn my savings to buy a car. By all means use some savings as part of the deposit etc but the financing the bulk is the smart way to do it. Spend the banks money.

Would you not rather have the few thousand Euro you'd pay in interest for the pleasure of using the bank's money in your savings though? I don't get why it's poor financial management to take a loan from yourself for free rather than pay someone else for it, especially when investing in a depreciating asset.

thierry14

divillybit wrote: »

Similarly to you thierry I bought my house at a young age and paid it off quickly. But the key was having the right mentality towards saving and putting it towards a home for myself.. there was many a time a felt like blowing a ball of my savings on a new car but kept focused on buying a good asset like a house that would stand to me and not a depreciating asset like a car. But alot of people aint good with managing their money. I had a few beers on me one night lately and let slip that I had paid off my house and I felt like my mates were resentful but feck them.

Get the same response from colleagues/friends too when mortgage subject comes up

How ur only 31

I never bring it up, I even feel embarressed taking about it.

My wife who is 27 sometimes just nods that she has a mortgage when in larger groups and people talking about them.

Its better to act poor.

I drive an old car, thats about to change soon with the Tesla all going well , will get a few comments then lol.

eviltwin

I've a mortgage but it's small and will be paid off in about five years. No car loans, credit cards or anything like that. I have a credit union account I set up especially for loans but I haven't used it yet. I prefer the saving up to buy something approach.

Are Am Eye

I am averse to being debt averse.

LadyMacBeth_

I don't have very much money so I have always spent within my means. If I can't afford something then I don't buy it. I don't have a credit card and I've never taken out a loan or been in debt. My parents went on a mad one buying properties during the boom and maybe that's made me go the opposite way. I would like to have a small mortgage one day on a 2-3 bed place with my wife. I can't get life assurance though so it will have to be a place she can afford on her own if anything happens to me.

Oldtree

Learned my lesson nearly 20 years ago but had a lucky escape. Have a small mortgage left now but no credit cards or other loans and a debit card only.

Do not borrow for current spending no matter what, you will be years paying it off, far longer than the time it would take to.save for what you want.

Definitely debt adverse.... now

cefh17

Beasty wrote: »

I'll probably retire around or just after 60 (not very far off now!) and should have plenty to maintain my quality of life as well as provide a start to adult life for my kids.

Probably could have done it at 59 if you had never found the SSF thread :D

suicide_circus

I owe nothing but then I own nothing of value.

wexandproud

own my own house plus 2 small rental properties all mortgage free . If you had of asked a few years ago it would have been different story . Got stuck in and cleared them off . Credit card cleared every month . Have a very small business loan but that suits at the moment.
Nice to see a lot of posters in a comfortable position , its a terrible shame a lot more of the population hadn't the same approach instead of borrow , borrow , borrow

CelticRambler

Not debt averse, but increasingly debt-wary as I grow older! :pac:

I had the good fortune/sense to learn about financial management when I got my first decent job, so a few years later when the banks were eager to lend me 50% more than I'd already decided was my max budget for a mortgage, I politely declined their generous offer. That 50% was only £20k, but ten years later, I was able to sell that house for three times what I'd paid for it, clear the remains of the mortgage (and MrsCR's CC bill :rolleyes: ) and buy elsewhere for cash.

Subsequently, through no fault of my own, I went through a bad patch, had to live wwwwwwwweeeelllllllllllllllllll below the poverty line and ran up some unsecured debts, but came out the other side and have been in the clear since.

While I'm still living in the same mortgage-free house and driving the same bought-and-paid-for vehicles for the last few years, I've been building up funds to use as seed capital for whatever business will see me through my retirement. I wouldn't consider selling or re-mortgaging the house, which might now be worth two or three times what I paid for it, but it wouldn't bother me to take out a 15-year loan for ten times my net worth as long as it was tied only to the business.