3 Reasons You Should Get Out Of Debt
Today, I want to take a minute to talk about a topic that a lot of us are familiar with, but do not like to talk about. That topic is debt.
We love to have the shiny new cars and the nice houses, and we don’t mind borrowing money for these things. Most of the time we do not think twice about signing the dotted line for loans or new credit cards.
In the past, I was the same way. I wanted the nicest clothes and newest electronics as soon as they were released and would use my refund check from school or a credit card to purchase these things.
This changed for me when I graduated college with my Master’s degree. I realized that the money that was so freely handed to me had to be repaid no matter what my entry-level job decided to pay me.
Let’s be honest, how many people have really graduated college and landed their dream job with the perfect salary to take care of their responsibilities at home AND have money to repay their loans?
I can say with certainty that I did not, which brings us to the reason why we are here. Debt.
Debt, by definition, is an amount of money that you owe to a person, bank, or company. In other words, the result of buying things that you can’t afford or living above your means.
I understand very well that debt cannot be avoided in some cases, but I read an article not too long ago that stated that only two-thirds of Americans could not afford a $1,000 emergency. That really stuck with me.
It doesn’t take much for a $1,000 emergency to occur. It concerns me that the average person would be “out of luck” if this were to happen at this very moment. That brings us to the first reason to get out of debt.
1. Emergencies Happen
Murphy’s law states that anything that can go wrong, will. This is very scary. I’m not sure about you, but I don’t want to be one of the two-thirds that cannot afford emergencies for the rest of my life.
I would much rather have access to cash in the event that something happens. It is harder to come across cash if you are thousands of dollars in debt.
Becoming debt free would allow you to focus your time on taking care of the people that are involved in the incident without worrying about how you will pay for it.
2. The Cycle Needs To Be Broken
There are no classes in school that teach students how to manage money. What’s even worse is the fact that parents rarely have transparent conversations with their children about money and debt.
Children never know that their parents are in debt and how stressful that can be until they have credit cards and loans of their own.
Getting out of debt would make a positive impact on the next generation. They would see that living without debt is possible and they would strive to become debt free themselves.
3. Fewer Bills To Pay
If you’re anything like me, you have a great number of bills to pay each month. Between numerous medical bills and student loans, I send payments to at least 10 different places each month.
That is a pain to organize. Becoming debt free means that I will only have to pay my monthly bills each month. That would free up so much money.
Have you ever thought about the amount of money that you could save if you had fewer bills to pay? This is my motivation to become debt free and I hope it motivates you as well.
The Bottom Line
There are a ton of reasons why getting out of debt is a great idea. I can only imagine how I will feel the day that I pay off all of my debt.
If you are serious about getting out of debt, use Dave Ramsey’s Financial Peace University to create your plan to pay off everything that you owe. Taking this course has really helped me put things into perspective. It has also motivated me to pay off debt as soon as possible.
Another helpful tool for getting out of debt is a budgeting app called You Need A Budget. This app has taught me how to stay on top of my bills and control my spending habits. If you are ready to gain control of your money, try YNAB free for 34 for days.
The main thing to remember is, do not to be discouraged if your journey seems like it is taking forever. Trust the process and be patient. The end goal is to demolish your debt.
I was faced with the decision to delay retirement because I was not as prepared financially when that magic date came. Talk about a disappointment…I was so hurt. I decided to go to a financial planner who was free…thank God! He was much younger than I and initially I was embarrassed to disclose my personal situation. He was very understanding and basically put me on a payment plan known to some as snowballing to pay off debt one debt at a time. Although I had to extend my work life and not retire, I learned it is never too late to start and ultimately, like you Kamika I can’t wait until the big debt payoff day.
It’s always hard to make the mature decision. You will love a more comfortable life because you did the right thing.
You have brought forward a very important topic. In India too, people are too quick to sign above that dotted line and start a journey of paying easy Monthly Installments (EMIs). They are never easy and it assumes that the job stays but what if it doesn’t? I have always believed that one must think of their needs before they splurge. My husband and I have stayed debt free and would love to be on that journey.
You brought up a very good point about keeping a job. What happens if you are unable to work for a period of time? The debt will still need to be paid. I am so glad that you and your husband are debt free! That is very rare in today’s society. Thanks for reading!
Hello! I was one of the lucky few who was taught by my parents at a very early age how to budget money. They were excellent examples of budgeting and saving money. But, I have to agree with you, in a previous job I worked to counsel people on budgeting and debt management. The cycle can be very hard to break. One of the best pieces of advice I ever read or saw is to know what you need versus what you want. Buying a house or a car that’s not at the top of what you can afford, but rather is easily affordable at 2/3 your current income is a great way to start. It’s about managing expectations. Much of the “expensive” things in life (except for an education) are meant to confer status. But, why is status important? Why do we need to appear to others as if we make more money than we do? These are core questions I’d hope every one of us continue to ask ourselves.
Great, thoughtful post. Thank you!
I agree with you! Most of the time the people that we are trying to impress don’t even care! The cycle is very hard to break and it starts with living within your means. Thanks for reading!