My life has been a roller coaster over the past 10 months or so. I went from a happily married homeowner to a single guy with an unfinished house and a bunch of empty rooms, not to mention some newly acquired debt from the settlement. It’s not at all how I imagined my life, but I can’t travel back in time so my focus has been on the future and the successes that are awaiting me. One of the most relieving successes is that I’m about to get out of debt again! At the end of this month I’ll once again be debt free and I’ll have more cash flow than I’ve ever had before (thanks to my increased earnings by writing articles for others)! But, with my increased earnings come many dangers…
The Danger of Debt Freedom
I have been thinking about this debt freedom day for quite a while now. Over the past 6 months I have been living an incredibly simple life – all because I just wanted to rid myself of this debt and move on with my life! Over this period of time, I have no doubt been tracking my progress toward paying off the debt, but I have also been thinking about all of the great things I can do once my debt is gone! Here’s a quick list:
- Go on a tropical vacation
- Experience a Detroit Tigers baseball game
- Buy a baby grand piano
- Buy an Eames Lounge Chair and Ottoman
- Buy a desk and furniture for my office
- Hire someone to repaint my house
- Hire someone to re-shingle the house
- Get all new windows
- Buy a new triathlon bike
- Take golf lessons
I absolutely love this list, and it would be awesome if I would get to do all of these things, but there’s just one problem. This list of only 10 products/experiences is going to cost me $20,000! While it would be great to have the freedom to purchase all of these things, is it really worth $20,000?
Since I have been burdened with this debt, I feel like I’ve been trapped in my own life. Every day something comes up that I would love to do, but I have to ignore the fun and tell myself, “Derek, you owe a debt. You can do this fun thing after it’s paid.” I felt very responsible when I said this to myself, but then all of the sudden I realized that my list of “must-haves” is going to cost me over $20,000. Something isn’t right with my mindset.
When I’m Debt Free, I’m Going to…
I always used to cringe a little when I hear people say this phrase because I was uncertain of their motives. If they have a single reward set up for themselves once they pay their debt, then that’s perfect. You need to do that. But, if they were thinking like I am now they can quickly head back down into the spiral of debt. Before I “reward” myself with any of the items on this list, I need to step back and review my long-term goals – one of which is paying off my home loan. Guess what? None of the items on my Top 10 is going to help me do that. In fact, by not doing them, I’ll get closer to achieving my long-term goal.
What are you going to do when you achieve debt freedom? Are you keeping your long-term goals in mind?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.