Saving money and paying off debt.

Discussion in 'Men's Economics' started by chocolatethunder, Aug 24, 2018.

  1. As a homeowner, I've been thinking the importance of paying off my house as quickly as possible instead of sticking to my original 30-year mortgage. For instance, working like a dog for a few years and pinch every penny thus being debt free in 10 years rather, and retire earlier.

    Thought we could have a discussion about saving money and paying off debt. Pros, cons, and how would you do it.

    I think it's important to factor if you have children or student debt, as those would probably be a priority.
    Wunderpus and Sparkyp like this.
  2. fodsod

    fodsod Member

    I think your mortgage needs to be the last thing on your list to pay off but if you can manage it then absolutely pay if off.

    All other unsecured debt (student loans, cc, ect...) need to be first, then you need to save enough to handle any emergency that arises because it will happen then that debt will come right back. I'd say 3-6 months of living expenses minimum saved and earning some interest.

    If you have kids then money needs to be saved to go towards education, vehicles, added insurance costs, costs for sports or other activities. Kids are expensive, no disputing that. Then there's retirement savings also. It's never too soon to start that saving.

    A honest and realistic budget to allow for all proper allocation of the funds needed to accomplish those things is another primary need. Budgets are just like the diets successful BB's follow. It must be designed with purpose and you must be able to live with it long term.

    Finances are very similar to the training lifestyle we all lead. The more consistent you are with your habits the more successful your results.
  3. BigNattyDaddy

    BigNattyDaddy Member

    I agree with @fodsod. Mortgage should be close to the end of the list.

    And instead of just letting your money sit in the bank, make it work for you. Invest in stocks, get into real estate, buy/start a business, etc.
  4. sinewave3

    sinewave3 Member

    If you have all credit card debt, student loans, car loans paid, AND have a cash safety net then might be a good idea. If this if the place you want to live long term.

    Banks pay nothing for savers or money market, but need to have that 6 month emergency fund in case you lose your job, gave an accident, leaky roof, etc.

    It’s hard to say if anything is better right now than paying down that mortgage. Stock market seems like a bubble, interest rates are low, treasury bills are anemic, inflation is creeping up, gold seems dead.
    MindlessWork likes this.
  5. ickyrica

    ickyrica Member Supporter

    I pretend that I'm the church and pay myself at least 10% of every check, right into retirement.

    I am a new homeowner but I'm also adding 10% of my monthly mortgage bill to each monthly payment.

    I keep accounts like credit and car loans at or close to zero.

    If I have any debt with interest I always look for a way to push it into a zero % situation (provided the debt will be with me for a little while)

    As stated above, I carry a safety net of cash. I'm under the 6 month mark currently, damn house is a time and cash suck.

    I try to eat home cooked meals as much as humanly possible.

    All I know is if you ignore or take debt with a cavalier attitude it will kick your ass. If you take debt too seriously youll be missing out in some good times in life. Money is a mother fucker lol.
    Logan44551, BigNattyDaddy and fodsod like this.
  6. Wunderpus

    Wunderpus Member Supporter

    I would always pay off credit cards and student debt first... Never go above 10% of you available credit monthly for credit score purposes.... After that, I would pay off whichever debts have the highest interest rates... If you can increase your credit score and refinance at a lower rate, that would be worth considering in the long run. However, there are obvious advantages to owning your home and renting it out, or buying another property to rent... Having a renter pay a large % of your mortgage will go a long way...
    Dr JIM and Logan44551 like this.
  7. Demondosage

    Demondosage Member

    Everything we are taught about saving money and retirement is completely the wrong way to do things!!! We are worried about how much money we invest in a retirement account while we pay 200k in interest over 30 yrs on just a house alone!!!

    Nothing is free. No such thing as free phones, free anything, it's a sign your name on the line and carry an iron cross of debt kind of world. Cash? Oh you want to pay up front in cash? This world is so fucked up now that you'll actually get a cheaper monthly rate autodrafting shit over paying for entire costs up front!!! How fucked up is that?

    All the while we have health insurance which is about the biggest scam going now. Pay your house off, STAY THERE, don't take out another 30 year loan when you're 40 or 50 years old, everyone who does this fucks themselves!!! They'll work until they die, nice relaxing life huh? I would rather travel and enjoy my life than worry about the monthly hustle
    Roger rabbit and BigNattyDaddy like this.
  8. Brandaddy

    Brandaddy Member

    A rule of thumb I've always followed was to buy assets and not liabilities. I started out at 20 investing pretty aggressively and not taking on any liabilities while all of my friends were getting new vehicles, buying designer clothes, moving into fancy apartments, and going on vacation whenever they could.

    I personally look at buying a house in the way most people do as acquiring a huge liability. Most people buy a house that doesn't give them a reliable amount of appreciation in the short term and usually pay more than they should because of something they like about it.

    I got my current house off a post I put on Craigslist about buying ugly houses. It's a side by side twin home. It needed some work done to it so I bought it, was all in at 85k. I then took out financing on it for a total PITI of about $615 a month and I rent the other side out for $925 a month. I could sell it right now for probably $180k+. That's what I would consider an asset.

    Now don't get me wrong, on paper I have a bunch of debt. Not cars or credit cards, but rental properties. I don't see those as a liability though because even my worst one has a DSCR of 3x.

    I know it's not for everyone, but if it were me. I would look at cash out refinancing the equity you have and buying some assets. Whether it's a house to flip, a rental property you can BRRRR, or both. They have both worked for me great and if you have the spare time it can really help you out. Even if your mortgage when up $100 a month, you could potentially turn $30k into a net cash flow of almost $2,000 a month within a year. That's a $1,900 difference, pkuss if you BRRRR the properties you pull most if not all of your capital out anyways and repeat the process. Now you would have $30k in the bank, $1,900 a month in additional income, and the loan pay down and apprecistion benefits of a couple more properties.

    Just my opinion..
    Roger rabbit likes this.
  9. BigNattyDaddy

    BigNattyDaddy Member

    And some people have the nerve to say money doesn't buy happiness
    ickyrica likes this.
  10. ickyrica

    ickyrica Member Supporter

    Baller $ = happiness :)

    I'm not a baller :(

    BigNattyDaddy likes this.
  11. BigNattyDaddy

    BigNattyDaddy Member

    "The lack of money is the root of all evil."
    Mark Twain
    Roger rabbit likes this.
  12. The value of the dollar will fall over 30 years so if you stick to the original plan you’ll end up paying less since you’re $ will be worth less, well they are worthless too as they’re pieces of paper backed by nothing.
  13. Roger rabbit

    Roger rabbit Member

    Actually the dollar is backed by oil.

    Nixon took us off of gold back dollar and backed it by oil. This is why the USA can put sanctions on other countries and no one else can. The petroleum dollar or also known as the “petro” is the only way to buy oil... hence why we protect this.... and other countries who try to go around this end up in a scrimmage with the USA and guns.
    The Terminator likes this.
  14. Meh I guess but oil’s not the same, it’s dirty, gross and can’t really be used more than once, now gold and silver are beautiful metals, better than platinum or diamonds . More people are willing to take gold over oil as payment i think, heck I would rather get paid in gold or silver lol
    Roger rabbit likes this.
  15. Roger rabbit

    Roger rabbit Member

    I’ll take gold all day!
    The Terminator likes this.