Solitude
Executive Member
If all goes well I should be debt free in about 3 years time. Still paying off the house and the car but working hard on getting them paid off.
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Debt-free?
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PaCiFieR
Well-Known Member
Debt free save for the R998.00 I owe on my credit card. This can be paid now If I wish.
RedViking
Nord of the South
No. That's not debt. That's an expense.
Depends on who you ask. Under IFRS 16, long term leases have to be reported as debts on a company's balance sheet because it is, in effect, an obligation to pay a certain amount over a certain time period, just like a loan.
I suppose it depends on your rental notice period, one could argue that if you have a one month notice period that one months rental would qualify as debt, anything more that than it's a contractual obligation so wouldn't qualify...
RedViking
Nord of the South
You confuse company for personal.
Yes, I get that. But technically interest you pay on home loans is also an expense.
The point I'm making is this thread is basically about are you free of an obligation to pay money. I don't think one can say hey, I'm debt/obligation free because I don't have a bond, when you are actually committed to monthly payments.
And on another note, one can become bond free and therefore debt free by paying it off, but if you don't own your own property you aint ever paying off your rent....
thestaggy
Honorary Master
I'm debt free.
I use my credit card for everything (hate cash) and zero it every month. I track what I spend and I have a self-imposed limit, never crossing it. There are exceptions such as vehicle maintenance and other unplanned expenditure and for these I have an interest-bearing cash savings which I put in to every month and I'll use this to zero my credit card whenever I exceed my limit.
I paid my car off last year.
I rent, so no bond.
If I want something new, I will save for it and purchase it cash. For example, when I purchased my at the time 5k TV I saved for a few months and effectively bought it cash. Swiped my CC and then dumped the money in to it. It took me nearly a year to build my PC as I bought it piece-by-piece throughout the year and then used some of my bonus to finish it off. Of course my purchases are all within my means as well. I would love the high end tech toys but I know I what I can reasonably afford.
I use my credit card for everything (hate cash) and zero it every month. I track what I spend and I have a self-imposed limit, never crossing it. There are exceptions such as vehicle maintenance and other unplanned expenditure and for these I have an interest-bearing cash savings which I put in to every month and I'll use this to zero my credit card whenever I exceed my limit.
I paid my car off last year.
I rent, so no bond.
If I want something new, I will save for it and purchase it cash. For example, when I purchased my at the time 5k TV I saved for a few months and effectively bought it cash. Swiped my CC and then dumped the money in to it. It took me nearly a year to build my PC as I bought it piece-by-piece throughout the year and then used some of my bonus to finish it off. Of course my purchases are all within my means as well. I would love the high end tech toys but I know I what I can reasonably afford.
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mr_norris
Expert Member
I think what you are talking about is an expense. Otherwise food and water is a debt too.
Edit: I replied late
And levies/property tax on the property you paid off.
No, not confusing the two, I'm well aware that accounting standards only apply to companies. I was just pointing out that there is precedent elsewhere to treat rentals as debt. In this case especially so because you have to live somewhere so you will always have an obligation to pay rent (unless you own the place) which, to me, seems a lot like a perpetual debt...
Speedster
Honorary Master
Following this thread I'm amazed at the negative perception of debt. My only problem with debt is that I can't get much more.
I have a home loan, car loan (this is one I could do without), large limit on my credit card (which I max out each month) and a large overdraft on my cheque account (which I use often).
I'm also trustee of two trusts, both of which have relatively large loans (when measured against their turnover).
I have a home loan, car loan (this is one I could do without), large limit on my credit card (which I max out each month) and a large overdraft on my cheque account (which I use often).
I'm also trustee of two trusts, both of which have relatively large loans (when measured against their turnover).
RedViking
Nord of the South
No. Not the same. Rent you are not indebted with. You can pack up and move anytime. Debt you can't get away from.
Pineapple Smurf
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Pineapple Smurf
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why do all the people here that rent say they're debt free? debt free means you live in a home in your name that is paid for, finish and klaar !!!!!!
And just where do you move to?
Refer my example to you where you can eventually get away from debt, but not rent...
By this logic you can't get away from debt if you own your house, since there's always rates/taxes/levies/insurance/maintenance to worry about.
Pack up and move to somewhere else where you are obligated to pay rent presumably? You aren't "getting away" from an obligation either.
I get where you are coming from and I agree that a lease is not the same as debt. But to say that you are "debt-free" while renting is not really an honest representation of your financial position either.
For sure. But that stuffs minor compared to a new bond/ever increasing rentals.
What do you infer about someone's financial position if they rent (as opposed to own)?