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Debt free?

November 8th, 2009 at 07:50 am

Is it bad that I consider us to be debt free?

In reality we have a mortgage ($149K) and my school loans ($30K), but I don't really think about them. DH and I closed on our house in August, so we have a mortgage, but the only real change is that rather than paying rent to a landlord, we pay it to the mortgage company. So mentally there hasn't been a big change there.

Also the school loans will still be deferred until I finish in about 2 years. So since we aren't paying for them, I don't think to include them. Additionally with the exception of the first semester DH and I have only been taking out the subsidized loans. So while fellow classmates who need those loans to live off of, have about 100K in debt, I'll only have about $40. Another reason why I don't include it is that if push came to shove, we have the money to pay it off, we'd drain our savings, but technically that could be gone tomorrow. So maybe once the school loans come out of deferment I'll start feeling differently, but I doubt it.

So no, I still have debt, but we've got it under control, so I may slip and say we're debt free. Wink

4 Responses to “Debt free?”

  1. ceejay74 Says:

    I don't think it's bad, because it's not like you're in denial that you need to pay those things off. But you have nothing but "good" debt, and it's a really reasonable amount. I don't think I'd consider myself debt-free in your situation, but I'd be pretty pleased with myself! Wink

  2. LuxLiving Says:

    I'd say I was CC free, or auto-loan free, but to me, IMHO, debt free means you don't owe anyone for anything other than normal household utility bills, insurance & taxes.

    Good that you have no other debts besides those listed. Are you saving for a car or replacement later on so you don't have to take out a car loan?

  3. monkeymama Says:

    Not bad at all - there are different *kinds* of debt.

    I don't agree that there are inherently *good* types of debt like mortgages and student loans. You can get yourself in a heap of trouble with these loans, quite easily.

    That being said, mortgages can be a very different animal (I live where renting is far more expensive) and using debt as leverage/arbitrage can be quite wise. I'd probably call myself "debt free" too. I certainly have when I borrowed against 0% credit cards and plopped the money in the bank to earn interest. I've done the same with low-interest auto loans. But I would generally never borrow for a purchase, even an auto.

    Though I am well aware my mortgage is a debt, most people put mortgage in a separate class when talking about "being debt free." I guess if nothing else, it is usually assumed that one has a mortgage, or rent. Though I wouldn't consider myself completely "debt free," I have often called myself "debt free" when it was clear the mortgage "didn't count" in a particular financial discussion.

  4. Jerry Says:

    I think that you can call yourself "consumer-debt free" at this point, at least! That isn't a stretch, and it will lead to becoming completely debt-free when you are out of school and can pay off the mortgage and student loans. The good thing here, as stated above, is that you have the insurance that you are not living in la-la-land and unaware of these debts. They are what they are, and you are in a better place for understanding that! Good luck with school...
    Jerry

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