What's the average age that people are debt free in America?

[Scarpozzi]

I keep hearing people say they're debt free on Dave Ramsey's show... I remember hearing this one lady that was in her late 20s call in bragging about how she had her house paid off and had about $20k in liquid assets...and pays cash for everything. I think it's absurd unless they are making $200k a year and living a moderate lifestyle.


I've got 2 kids in daycare, a mortgage, 2 car payments and living paycheck to paycheck (but still saving for retirement)...It just sucks to work as much as I and my wife do to see all of our cash go right out the door each month. Anyone else in that boat? (or is it everyone else?) I'm almost tempted to look for a second job, but don't want to be away from my family anymore than I have to.

 

[Vdubchaos]

Have you seen the deficit? Even if you are debt free in personal life, you are about 40-60k in FUTURE debt to government.

They keep printing/spending more money too.....

I keep hearing people say they're debt free on Dave Ramsey's show... I remember hearing this one lady that was in her late 20s call in bragging about how she had her house paid off and had about $20k in liquid assets...and pays cash for everything. I think it's absurd unless they are making $200k a year and living a moderate lifestyle.

200k? No, it depends where you live, HOW you live and HOW MUCH YOU SPEND (not what you make).

I've got 2 kids in daycare, a mortgage, 2 car payments and living paycheck to paycheck (but still saving for retirement)...It just sucks to work as much as I and my wife do to see all of our cash go right out the door each month. Anyone else in that boat? (or is it everyone else?) I'm almost tempted to look for a second job, but don't want to be away from my family anymore than I have to.

Sounds to me like one of you is working just so your kids get daycare. Why not just stay home and raise them....that's what we did. My wife would literally have to work just to pay for daycare......didn't make sense.

Here is your problem:
2 car payments (why do people buy new cars every 2-3 years....I don't get it). There is NOTHING better than a car that's paid off.

Chances are high you are also spending way too much money/went over your head with a house (don't worry, most people do that now days....and still do it even after housing crash).

And are also spending way too much elsewhere.

Your solution, start cutting down on expenses. downgrade your car, cut the cable, eat less, go out less, spend less on BS (coffee etc).

There is ways to cut down expenses, but it requires downgrade to your lifestyle....downgrade which MOST people are NOT willing to take/do.

Good luck

 

[sm625]

Probably around 65.

 

[purbeast0]

i would think it would greatly depend on where people live. paying off a $30k house in the middle of bumfuck nowhere at the age of 24 doesn't seem hard to do at all, but paying off a $300k condo in a nice city or suburbs at 24 seems a lot harder to do.

i'd also rather have "good" debt (ie, mortgage, etc) and be enjoying my life with disposable income rather than putting every cent i earn towards paying off a mortgage.

 

[smackababy]

I find the term debt free misleading. Unless you pay for everything in cash 100% of the time, being debt free is simply not going to happen. Someone responsible would have some revolving debt (as paying with a credit card is safer than using cash / debit) and until you get to the point you no longer require new transportation, automobiles could easily be viewed as debt, even if paid off. They still require some financial responsibility to maintain.

I would think one should be mostly debt free by retirement. Once you pay off your house, you should be reasonably debt free for the remainder of your years unless you buy a new car every couple of years.

As far as living paycheck to paycheck, I easily avoid that. I got to the point I could live entirely off one of my biweekly paychecks (cover all bills / food costs), and I don't really upgrade my standard of living more than my income increases. But, I don't have kids, so I am saving a ton of money there.

 

[vi edit]

If you went to college, I'd say probably mid/late 50's. And that's only if you aren't footing a huge college bill for your kids. For many of us, that debt cycle starts in college and we just get sucked into that mentality for the next 30 years until we finally get smarter and higher incomes.

Most of the debt free people I know never went to college, started working at 18 and lived much more modest lifestyles.

 

[cbrunny]

Big difference between secured & unsecured debt. We have no unsecured debt, but have a mortgage and car payments. Our total interest paid per month is pretty low though. (age 28)

 

[Vdubchaos]

i'd also rather have "good" debt (ie, mortgage, etc) and be enjoying my life with disposable income rather than putting every cent i earn towards paying off a mortgage.

Only in America people call debt "good".

Mortgage is the worst kind of debt one can possibly have. Have you even looked at your mortgage statement and how much interest you have paid to your bank?

There is no "worst" debt than your mortgage.

Most people pay anywhere from 10-20k a year in interest!

And NOT putting every cent towards your mortgage and minimizing your interest "to enjoy your life, which of course requires money, can't enjoy life without that".......is not exactly smart either.

 

[z1ggy]

It all depends really. If you mean when are you out of bad debt... For most people, that's probably by their mid to late 30's, due to student loans, credit card payment, etc. Plus, most people aren't wealthy enough to pay for a new car in 100% cash, even if you are frugal and only buy a new one every 10+yrs.

For other debt like owning a home, that might mean you're in debt til your 50s or 60s. But, that debt is technically earning you equity (hopefully) so as long as you keep paying, it's a good thing IMO. I'm not an economist though, so I can't speak too technically on the debt stuff.

 

[purbeast0]

oh look ... vdubchaos is on my nuts in another thread. shocker!

 

[DAGTA]

I don't know what the average age is. So many factors affect it.

I'm 36 and my only debt is my mortgage, which I'm actively working to pay off. I plan to be debt free before 40.

 

[Vdubchaos]

Big difference between secured & unsecured debt. We have no unsecured debt, but have a mortgage and car payments. Our total interest paid per month is pretty low though. (age 28)

Define "low".

What is your Mortgage interest?

 

[Vdubchaos]

oh look ... vdubchaos is on my nuts in another thread. shocker!

I'm not on your nuts.

Just pointing out your constant ignorance.....

 

[Genx87]

A mortgage has its interest as a deduction on taxes. Also typically housing appreciates. So while we have to live somewhere it makes sense to take out debt on something that should holds its value over time. Unlike a car, or TV, or other luxury items.

I would definitely not call a mortgage the worst debt out there.

 

[z1ggy]

Only in America people call debt "good".

Mortgage is the worst kind of debt one can possibly have. Have you even looked at your mortgage statement and how much interest you have paid to your bank?

There is no "worst" debt than your mortgage.

Most people pay anywhere from 10-20k a year in interest!

And NOT putting every cent towards your mortgage and minimizing your interest "to enjoy your life, which of course requires money, can't enjoy life without that".......is not exactly smart either.

Except, that interest is tax deductible, and while paying it down, you are earning equity. Sure, paying an extra 1-2 payments a year is smart, but putting EVERY ECTRA CENT you earn toward the mortgage...?What..? Only a tard would say owning a home is bad debt.

 

[purbeast0]

I'm not on your nuts.

Just pointing out your constant ignorance.....

you are the ignorant one, as everyone is pointing out after your stupid post.

 

[edro]

If you wrote down where all your money went, you would quickly see ways to to save large amounts.
If you drive beater cars and live in a small low cost home, it is very easy to be debt free.
Everyone likes to keep up with the Jones' and feel they NEED higher cost possessions to get the most out of life.
They often use their kids as an excuse for more expensive items.
I don't want billy growing up in a small crap house!
I don't want billy driving around in an unsafe older car!
When in reality, "I don't want my friends and family to think we are poor."

You only live once!

The best things in life are people and experiences, not things. It's a tough rule to live by though.

 

[cbrunny]

I don't want my son to be named Billy.

 

[Newell Steamer]

Life costs money. And, as such, a family is expensive.

On top of it, your kids aren't even in college yet.

 

[Vdubchaos]

For other debt like owning a home, that might mean you're in debt til your 50s or 60s. But, that debt is technically earning you equity (hopefully) so as long as you keep paying, it's a good thing IMO. I'm not an economist though, so I can't speak too technically on the debt stuff.

That's a great question.

Even though your house MIGHT be earning you equity (not happening now days)......remember, most people pay pay 2x the house price in interest.

Your 250k mortgage will cost you about 550k over 30 years......

Then you add property taxes, fixes/maintenance and.....well I struggle to find "equity" or "investment" in any of this.

HOWEVER, one can also say the alternative "rent" might not be better.

It's the only thing we got as far as "having roof over your head goes".

Read: they got us by the balls.

 

[Capt Caveman]

Only in America people call debt "good".

Mortgage is the worst kind of debt one can possibly have. Have you even looked at your mortgage statement and how much interest you have paid to your bank?

There is no "worst" debt than your mortgage.

Most people pay anywhere from 10-20k a year in interest!

And NOT putting every cent towards your mortgage and minimizing your interest "to enjoy your life, which of course requires money, can't enjoy life without that".......is not exactly smart either.

Yawn. Another ignorant post from you.

Not all debt is bad. And a mortgage is one of the best types of debt to own.

I'd rather have a mortgage at 3.5% and utilizing the 100,00s of money I could have used to pay off the mortgage in investments bringing me $8% plus returns. Then we adjust the actual mortgage rate with the tax benefits. I'm enjoying life better than you.

 

[edro]

Mortgage is the worst kind of debt one can possibly have.

You're a moron. I know you go for shock value, but it gets old.

Do you live in a van, or your mom's basement?

 

[Puppies04]

I've got 2 kids in daycare, a mortgage, 2 car payments and living paycheck to paycheck (but still saving for retirement)...It just sucks to work as much as I and my wife do to see all of our cash go right out the door each month. Anyone else in that boat? (or is it everyone else?) I'm almost tempted to look for a second job, but don't want to be away from my family anymore than I have to.

Tell me what your 2 car payments cost each month and I will tell you why you are in debt. I struggle to understand why people feel the need to borrow for even 1 car when the repayments saved over a few months can purchase a car that is completely satifactory.

Also when you say you are living paycheck to paycheck do you realise that none of your outgoings are anyone elses fault but your own. You chose to have 2 kids, you chose to take out loans for 2 cars and you chose to buy that house where you really can't afford the mortgage (if you are living paycheck to paycheck then you can't afford the mortgage).

Want a way out then simply lower your expectations of the lifestyle you think you should be living because you can't afford the one you are living now.....

 

[Capt Caveman]

That's a great question.

Even though your house MIGHT be earning you equity (not happening now days)......remember, most people pay pay 2x the house price in interest.

Your 250k mortgage will cost you about 550k over 30 years......

Then you add property taxes, fixes/maintenance and.....well I struggle to find "equity" or "investment" in any of this.

HOWEVER, one can also say the alternative "rent" might not be better.

It's the only thing we got as far as "having roof over your head goes".

Read: they got us by the balls.

More yawn.

 

[Vdubchaos]

you are the ignorant one, as everyone is pointing out after your stupid post.

Above actually applies to OP's post.

Those people that call in and brag about their "no debt" are probably the ones in most debt.

That's mostly because people lie so much, they believe their own lies. And speak of their lies to make themselves feel good.

Just like you just did Purebeast.

Tell me, based on what I wrote, how exactly I'm the ignore one.

From a guy that comes up with a term "good debt"