Reason 1,457 to be Debt Free

IMG_1900Everyone has an opinion on money matters.  Is there “good debt”? Should you avoid paying off your mortgage early because of tax benefits/deductions on the interest?  Today, I am as grateful as ever to be 100%  debt free because my husband may not get paid next week.

The US Government’s fiscal year ends Sept 30, and at the moment, no budget is passed for the next fiscal year.  Federal employees are in limbo while the House and Senate try to reach a resolution on the budget.  Guess what? They don’t play well together in the sandbox.  No resolution=no work and no pay starting October 1.

No tax deduction for mortgage interest can match the security of becoming your own bank. . . creating a situation where you can borrow from yourself should you face loss of income or another crisis.  Building savings is like making your own insurance policy that can be activated when life throws you a curve ball.  You can create this level of savings more rapidly the less debt you have.  The less debt you have, the lower your expenses are should you lose income.  We have money saved that will get us through this possible government shutdown, and we continue to save so that we could weather a more lengthy loss of income or other larger crisis.

A fellow blogger wrote this week on our tendency in America to curse the politicians minding the country’s budget in Washington without reflecting on our own money handling and personal debt.  Stop by and read his post  for more food for thought.

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14 thoughts on “Reason 1,457 to be Debt Free

  1. anexactinglife

    There is no tax deduction for mortgage interest in Canada – I suppose the govt is making a statement that it doesn’t subsidize home buying? Plus we have to pay mortgage insurance if we put less than 20% down! I liked the article that you linked to.

    Reply
    1. healthfulsave Post author

      Interesting!
      In the US you can borrow credit against the equity in your home and that interest, too, is tax deductible to some extent. Never done it myself but for some people their home equity becomes like an ATM.

      Reply
  2. Simply Save

    I hope the government doesn’t shut down, that’d be horrible for all our military serving overseas, government employees etc. I also had a scare when I was on active duty with the military and the government almost shut down in April 2011. It made me realize the importance of having a few months of income saved up!

    Reply
    1. healthfulsave Post author

      I remember the April 2011 near shutdown. That was was terrible timing with the number of schools trying to take spring trips to DC and finding museums etc on the verge of closing. My husband said the govt was trying to pass a resolution today to put off the shut down for 1 week. The government equivalent of “I’ll start my diet next week”!
      I believe a shutdown could also affect people receiving social security or disability payments.
      Thank you for your service Simply Save!

      Reply
  3. Liz @ Economies of Kale

    I hope everything works out for you, but it must be such a relief to know that you don’t have to worry about the mortgage. Like anexactinglife we have to pay mortgage insurance if we have a deposit of less than 20%, however it seems like people don’t even think about it and just treat it like an inevitable extra cost.

    I’m hoping to do exactly what you have done and pay off my mortgage as quickly as possible. I’m saving like crazy and will hopefully have enough for a 20-30% deposit on a one bedroom apartment in 2-3 years. Assuming there is no Mr Kale in the picture my plan is to buy a cheap (for Brisbane) apartment, continue to save like crazy and pay off the mortgage as quickly as possible.

    Reply
    1. healthfulsave Post author

      We have the PMI insurance too in the US. I agree – most people just absorb it and put down a small downpayment.

      Liz, I have every confidence that you will pay off your mortgage with great focus and speed when it is time to buy, with or without “Mr. Kale”!

      Reply
  4. "No Pension, Will Travel!" with Cheryl + Paul

    We wish you well in dealing with this road bump. Good that you have some shock absorbers. Most of us have more control over our own debt or savings than that of our governments. In the US, it appears that consumer debt ratios started to improve after 2008. Here in Canada, we did not learn from what we saw only a few miles away. Debt levels continue to rise. We wonder what the proverbial straw will be.

    Reply
  5. Pingback: Another Reason to be Debt Free | Your Financial Toolkit

  6. budgetlovingmilitarywife

    Glad to hear your family is set up financially for the “shut down”… isn’t it crazy how financial security changes a “crisis” into an “inconvenience”.? We are left on working to pay off our mortgage (hopefully only a few more years)… can’t wait for it to be gone!!! I can almost taste “freedom”! 🙂 Thanks for stopping by my blog! Best of luck to your family! Thoughts & prayers!

    Reply

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