The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.
I have officially been debt free (including my home) for 7 months now. I typically don’t tell too many people about this milestone because they either look at me like I’m a superhero that has done the impossible, or they think I’m an idiot because I’m forgoing all those tax benefits by not having any debt. Either way, the conversation gets awkward, so I naturally just avoid it.
So what was the driving force for me to do such a crazy thing? And is it all that I imagined it’d be?
Why the Fight to Get Out of Debt?
I have had a few queezy-ache-in-the-pit-of-my-stomach feelings in my life, and at least one of them had to do with debt that I could not pay. I was 24 and newly married. Bills seemed to be coming in left and right and we simply couldn’t handle another one. And then (of course) that new bill came in the mail – it was our student loan bill of $75. I knew we didn’t have the money to pay it and I felt completely worthless, broken down by all the debt. From that point on, I knew that I never wanted to be in debt again.
…And then life happened.
My wife (the spender) decided that she just couldn’t live with me any longer. She left the house and demanded half of our net worth (which was mostly tied up in the house). Since I didn’t want to sell the house, I was officially in debt again – to the tune of $21,000. Ugh.
I was required to come up with the full amount in 6 months. It wasn’t easy, but I did it. Not only was I debt free again (besides the house), but I quickly understood what amazing things could be accomplished with a plan and a deadline. This payoff got my brain thinking a little more than usual, and I started asking myself some strange questions:
- What if I paid off the home mortgage?
- Would that be possible?
- And how would this benefit me?
Ultimately, I decided to set a goal to become completely debt free in one year. The plan was to completely rid myself of debt for the following reasons:
- Peace of mind – no bank can take this house from me
- Increased cash flow – no payments means that my money stays with me each month
- Save on interest – paying off the debt means saving thousands of dollars in interest payments
- Invest heavily to create options for myself later in life
My Perspective Today
Now, over a half a year into my debt-freedom walk, has my perspective changed at all? Absolutely not. Since that last payment, I have been able to cash flow a $10,000 wedding (that’s right, I found a wonderful lady that also likes to save), buy $2,500 worth of windows for my home, and just enjoy life in general. Plus, I still have a healthy amount of cash in the bank. If I had car payments and house payments, how do you think I would have had to pay for all of these things? With credit of course, which then would have put me into more debt, which would have made me even more strapped for cash! It’s a vicious cycle that only keeps dragging us down.
What I Am Most Excited About
The absolute best thing about being completely debt free is the options that come with it. By having absolutely no payments, my future wife and I are banking thousands of dollars every single month. With this extra cash, we soon plan on investing in a rental property, which will then provide us an even larger cash flow. By doing this just three times, we will effectively replace my wife’s working income and she will be able to stay at home with our future kids!
With debt, the only way to make this possible would be to cut our everyday expenses dramatically. We would have to constantly watch our pennies and spend money only after checking the bank account first. This is certainly not how I’d like to live my life. By getting out of debt, investing heavily, and creating a passive income, my wife and I can continue to live comfortably and provide a stable, stress free environment for our family.
How about you all? Are you ready to get out of debt? What motivates you to get out of debt?
Share your experiences by commenting below!
***Photo courtesy https://www.flickr.com/photos/59937401@N07/7214450550/
