Wednesday, October 04, 2006

Debt restricts you

Having debt sucks! The only debt I have is a student loan. I consider myself debt-free though because I'm choosing to not pay off the student loan because the interest rate on the loan is about 2.6% and my EmigrantDirect account pays over 5% in interest. So, I just keep making my mandatory monthly payments because I'm making money by doing it this way.

I'm frugal. I'm not cheap, but I certainly don't just spend money like it's water. As far as credit cards go, I pay them off every month. So I never have an outstanding balance that carries over. My car has been paid off for at least five years and it has about 113K miles on it. I spent about $1K in July for a major tune-up and a minor repair on it and I plan on keeping it until it dies or I just get sick of it. So far, it doesn't bother me! Sure, it's not some fancy car with leather interior, but it's functional and decent.

I know people of varying levels of debt. They range from completely debt-free to hampered down by credit card debt, student loans and car loans. (I don't think any of my friends have this, but one of my pet peeves is car leases!!)

I have one friend who chalked up a lot of debt over the last 10-15 years because he was a single father working a not-so-great job simply for stability for his son. Now that his son is all grown up and he has a MUCH better job, he's been working the last couple years to pay down his debt. We were talking about it last week and he thinks that by the end of next year, he may finally be out of credit card debt! He's so excited about it and I'm excited for him! We're planning on having a party to celebrate his debt-free status once he's all done!

Debt chokes the life out of you and prevents you from following your dreams. Having financial freedom is so liberating! I wish everyone would live within their means. It's tough to do, but like anything, you really can appreciate what you've worked and waited for. There's no satisfaction in getting something for nothing. Just talking about it with my friend reminds me about how happy I am that I don't have to worry about that!

1 comment:

Carolyn said...

It's amazing how much money you can save when you aren't paying the bank! I'm amazed at how much most people pay for car payments - a $500-$600 car notes are common these days. I'm so glad we're not doing debt anymore. We're planning to drive our cars until they die, and then we won't spend near the amount on replacements as we spent on these cars. It's amazing how much easier (mentally) it is to buy a $30k car on payments than it is to hand over $30k in cash to buy a car!