Definition of Debt Free

[Spartana]

I personally would consider anything I bought on credit or owed money on - except usage things I needed to buy like food, utilities, gas for the car, insurance, etc...even rent would be a usage cost not a debt - to be debt even if I had the money saved to pay it off or equity in my house to pay it off. In my case I am completely debt free in that I have a paid off house and no other debt of any kind.

[Cheddar Stacker]

This is the definition of debt, so if you are free of all this you are debt free, otherwise, not so much:

debt
 noun \ˈdet\ 

: an amount of money that you owe to a person, bank, company, etc.
: the state of owing money to someone or something
: the fact that you have been influenced or helped by someone or something

Full Definition of DEBT
1:  sin, trespass
2:  something owed :  obligation <unable to pay off his debts>
3:  a state of owing <deeply in debt>
4:  the common-law action for the recovery of money held to be due

debt
 noun    (Concise Encyclopedia)

Something owed. Anyone having borrowed money or goods from another owes a debt and is under obligation to return the goods or repay the money, usually with interest. For governments, the need to borrow in order to finance a deficit budget has led to the development of various forms of national debt.

[Spartana]

This is the definition of debt, so if you are free of all this you are debt free, otherwise, not so much:

debt
 noun \ˈdet\ 

: an amount of money that you owe to a person, bank, company, etc.
: the state of owing money to someone or something
: the fact that you have been influenced or helped by someone or something

Full Definition of DEBT
1:  sin, trespass
2:  something owed :  obligation <unable to pay off his debts>
3:  a state of owing <deeply in debt>
4:  the common-law action for the recovery of money held to be due

debt
 noun    (Concise Encyclopedia)

Something owed. Anyone having borrowed money or goods from another owes a debt and is under obligation to return the goods or repay the money, usually with interest. For governments, the need to borrow in order to finance a deficit budget has led to the development of various forms of national debt.

You got me at sin :-)!

[Doaner19]

I got the house mortage... It's still a nut I have to pay every month.  So I'm not debt free unfortunately.

[Tyler]

This reminds me of the question "should i consider my home equity as part of my net worth?"

By definition, absolutely. But when discussing things like SWRs, you need to look at a different number than your net worth.

By definition, a mortgage is absolutely a debt. When discussing whether you've made the best financial decision for your family, you may need a different metric than simply "debt free."

Don't try to change the definition. Change your perspective.   

[dragoncar]

This reminds me of the question "should i consider my home equity as part of my net worth?"

By definition, absolutely. But when discussing things like SWRs, you need to look at a different number than your net worth.

By definition, a mortgage is absolutely a debt. When discussing whether you've made the best financial decision for your family, you may need a different metric than simply "debt free."

Don't try to change the definition. Change your perspective.

I'm not in debt, my housing costs are hedged against inflation in a leveraged fashion.

[Tyler]

I'm not in debt, my housing costs are hedged against inflation in a leveraged fashion.

Ha.  Who am I to argue with wordsmithing of that quality? ;)

[KBecks2]

This is the definition of debt, so if you are free of all this you are debt free, otherwise, not so much:

debt
 noun \ˈdet\ 

: an amount of money that you owe to a person, bank, company, etc.
: the state of owing money to someone or something
: the fact that you have been influenced or helped by someone or something

Full Definition of DEBT
1:  sin, trespass
2:  something owed :  obligation <unable to pay off his debts>
3:  a state of owing <deeply in debt>
4:  the common-law action for the recovery of money held to be due

debt
 noun    (Concise Encyclopedia)

Something owed. Anyone having borrowed money or goods from another owes a debt and is under obligation to return the goods or repay the money, usually with interest. For governments, the need to borrow in order to finance a deficit budget has led to the development of various forms of national debt.

You got me at sin :-)!

Proverbs 22:7     The rich rule over the poor, and the borrower is slave to the lender.

Slave is an interesting word to use, but it is truth!!! 

[arebelspy]

Slave is an interesting word to use, but it is truth!!!

In your mind, perhaps.  It is not at all the same to me.

As with just about everything else in life, it's all about mindset.

[Proud Foot]

Wow this is a really good discussion. My thought on debt free (in the financial sense) is not owing anyone money. I do not include in this my utility bills or what I have charged to a credit card for the current period. If I do not pay off those charges I do count that as debt though. While I am striving to be debt free, I do understand that I can take advantage of low interest rates to earn a better return. I feel like the whole debt free/using debt as a tool is a personal preference which there is no correct answer.

[Bateaux]

Debt free to me means just that.  No debts.  You could consider yourself debt neutral if your assets are greater than what you owe.
My definition of debt free is this, do you still make payments on a loan?  If so, could you pay off the loan in a month if needed?  If the answer is no then you are not debt free.  Debt still rules your life.

[deborah]

With that definition, I don't think any of us is debt free. Even if we pay our credit card off in full each month, we are in debt during the month. If we don't have a credit card, we probably use centrally generated electricity, which we are billed for after we have built up a debt by using it. And even if we are completely off-grid, we are probably building a tax debt on our stash!

[Dicey]

With that definition, I don't think any of us is debt free. Even if we pay our credit card off in full each month, we are in debt during the month. If we don't have a credit card, we probably use centrally generated electricity, which we are billed for after we have built up a debt by using it. And even if we are completely off-grid, we are probably building a tax debt on our stash!

Excellent point, Deborah! Methinks there's too much nitpicking going on.

[Rural]

I know how my grandfather defined it, and I don't think there's any good reason to change it. Debt free means not owing anybody anything.


I choose to have debt, that is, not to be debt free, because credit card companies will give me a discount on things I buy in exchange for taking out debt. So I have debt. It's okay. I'm a lender, too. My bank is currently using my money to make themselves far more money than they pay me for the priveledge, but they pay me some.


I don't worry about the semantics.

[Davids]

My only debt is my mortgage so no, I am not debt free.