Debt Story

What I Like About Being Debt-Free

I was talking to a friend the other day, and he asked me, “What’s the big deal about being debt-free?”. Here is a summary of my answer:

I do not have to worry about late-fees, penalties, interest charges, lost payments, universal default, or other “debt-related” issues. Instead of worrying about how to pay for items I purchased in the past, I am free to plan for the purchases that I am going to make in the future.

If something where to “happen” to me, my wife would be free from the pressure of debt. Instead, she would be able to focus all of her attention on taking care of our kids and herself.

Interest rate fluctuations work for me and not against me. If interest rates, which are currently at all-time lows, begin to creep upward, I have no worries. Why? Because, those higher rates will be working for me, in my savings account, instead of against me, in a credit account.

I have a great job, working with and for great people. I no longer work simply for a “paycheck” but I work because I am doing a job that I love.

I can fully fund my emergency fund, retirement accounts, and college savings accounts. In the past, a good portion of my income was dedicated to debt repayment. Now, that same portion (and more) is divided into my various savings accounts.

I have clearer understanding of the difference between a beneficial purchase and a silly purchase. When I was in debt, and not focused on my financial future, I would “reward” myself by purchasing a “toy”. Now, I reward myself by sending an extra $500 to my Roth IRA.

I enjoy helping other people. Living without debt ‘frees up’ more income for helping others.

I have decided to live without borrowing money. This FORCES me to be ‘intentional’ with my money. I must live on a budget, I must plan for my future, I must balance my checkbook, I must think about major purchase, I must be in control.

Living without debt (and not tapping into available credit) can be challenging, especially when you consider ALL of the major purchases that we make in our lifetimes. Cars, houses, furniture… these things cost a LOT of money. I am (TRUST ME) well aware that it will take some very, very diligent planning to live without EVER borrowing money. But, that is my goal, and that is my plan. Will I succeed? I hope. So far, I’m 15 months ‘in” and things are going well.

12 thoughts on “What I Like About Being Debt-Free

  1. I lived without a credit card for 10 years. You can do it NCN.

    Just delay your gratification, which can be hard sometimes for me. I love to travel

  2. Pingback: No Credit Needed Podcast » Blog Archive » No Credit Needed Podcast Episode 41 : Personal Finance Podcast About Debt Repayment, Debt Reduction, and Saving Money
  3. I love this post. For me the best things about being almost debt-free (working on that mortgage) are that I’m not stressed, we can do the things we enjoy, and we have more money!

  4. I have recently become debt-free — paid off the charge card, home equity loan and house! What a freeing feeling. I can enjoy life now as it was meant to be enjoyed. I feel so relaxed, satisfied and content now.

  5. Great post, it hard to find other people who have figured out debt is bad. I’m starting my third year of debt free living. I don’t think I’ll ever use debt again. “The rich ruleth over the poor, and the borrower is servant to the lender. ”


  6. Hallelujah! There are others of us out there that are debt free and enthusiastically support living without consumer debt. Now we’re working on paying off the house to be totally w/o debt. No more debt, ever!

    Good luck and all the best!

  7. I am debt-free and am coming to the conclusion that it is not entirely what it is cracked up to be.

    Don’t misunderstand me -I am not saying carrying debt is a good thing- but I think an implication that is “sold” with the idea of being debt-free is that your financial life gets easier or more pleasant. I’ve found that that isn’t really what happens.

    What does happen is that the nature of your financial problems change. For example, if you want to buy a house but not go into debt, that’s a problem. Saving up the money to buy a house without debt will take years. You will work just as hard, find yourself just as functionally illiquid (and “waste” just as much of life) compiling that money as you would have if that money were paying a mortgage. True, if you save first you have more financial flexibility if your circumstances or desires change. On the other hand, saving gives you less flexibility in that you are planning for an uncertain future instead of spending in a present whose circumstances you can define.

    So debt is good – or rather it can be good. I think the key is whether you take on debt responsibly and manage it responsibly. Signing a mortgage for a home you really want to live in, after doing significant research and due diligence and leveraging your financial strength to get favorable terms, is good and responsible debt. Signing a mortgage for a house you merely want to flip, with changeable, possibly damaging terms, is irresponsible debt unless you are a professional. (Even if you are a pro, it may still be irresponsible.) Putting $40 on a credit card for Chinese food (like I used to do all the time) is irresponsible debt too.

    Personally I think it is part of financial maturity to have debt. But it has to be manageable, favorable debt for the few important things in life.

    One of the first things I think people should do when they become debt-free is make a list of three to five things they are willing to go into debt for. For example, I would gladly go into debt to start a business, to buy a home, to add onto a home, or to fund my children’s education. I would never take on debt for a car, however. Cars are essentially these days, and I am not against car loans – if you really really really like cars and that’s one of your five things. It’s just not one of mine.

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