I have decided to do a series of posts, ten in all, exploring the concept of living debt free.Â This is the first post in that series.
Defining Debt Free
Let’s assume that I take my daughter to the doctor.Â I schedule an appointment, my daughter sees the physician, I give my insurance card information to the doctor’s office manager, and then my daughter and I go home.Â Three months later, I receive a bill from the doctor, for the balance on my daughter’s account, the portion not covered by insurance.Â Technically, this bill is a debt – a debt that I owe and a debt I am obligated to pay.
Let’s now assume that I take my son to the movies.Â I reach for my wallet and find that I’ve left my cash at home – and all I have is my credit card.Â The movie starts in two minutes, so I swipe the card and buy our tickets.Â A month or so later, I get a bill from the credit card company.Â This bill is a debt – a debt that I owe an a debt that I am obligated to pay.
Let’s further assume thatÂ a friend approaches me and asks me to sponsor him in a 5k charity race.Â I sign up for a per kilometer donation.Â Two months later, my friend’s charity sends me an envelope in the mail, with an invoice for the amount I’ve pledged.Â This is, again technically, a debt – a debt that I owe and a debt I am obligated to pay.
It’s nearly impossible to function in the modern world without monthly bills, future monetary obligations, and some type of “debt”.Â So, for the sake of this series, here’s how I will define debt free:
I am living debt free when I can meet all of my financial obligations without paying interest or making loan installment payments.
Hopefully, the above makes sense.Â Basically, I do not want to borrow money in order to make purchases or afford services.Â Instead, I want to pay for the things that I want, need, and use.Â Personally, I do not use a credit card – but it would be possible to live the debt free life and use a credit card – assuming one was paying off credit card balances, in full, at the end of each billing cycle.
Considering THE MORTGAGE
Now that I’ve defined living debt free, it’s important that I mention THE MORTGAGE.Â (That’s how I see in my mind’s eye – THE MORTGAGE.)Â A few months ago, we purchased a new house, so we have a mortgage.Â Technically, we’re not debt free.Â We’re debt free – except for the mortgage.Â I do have a plan in place to pay off the mortgage early, but it’s always important to remind my readers that we do have this debt on the books.
For the purpose of this series, I’ll focus on non-mortgage debt: car loans, student loans, personal loans, etc.Â Basically, I want to explore life without consumer-debt.
Exploring Pros and Cons
Now that I’ve defined living debt free and mentioned the mortgage, I’ll get to real purpose behind this series.Â I want to share my own four-plus years of experience living debt free – and let you guys know some of the pros and cons associated with this type of life.Â You might be surprised by some of the things that I have to say write.
I’ve outlined the series and I’m very excited about it.Â It’s been a while since I’ve written regularly, because I had grown tired of the same-old-same-old type of blog post.Â From this point forward, I’m just going to write posts about which I am passionate, exploring this journey that I’m on.Â I hope you’ll stick around, subscribe to No Credit Needed, leave comments, follow me on Twitter, and enjoy what you read.Â Rock on!