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Why Should You Care About Getting Out of Debt?

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Most of the time I’m writing on this blog to help people get out of debt and to save and invest money for their future. But, for those that stumble onto my site from another random site, perhaps they don’t even care that they have debt. After all, it’s incredibly normal to have debt today. In fact, I have realized over the years that I am the weird one that is actively trying to get rid of all my debt, including my house mortgage (by next year). So yeah, I guess I’m a little crazy, but why do I care about getting out of debt, and why should you? I have 5 pretty solid reasons why you might want to ditch your debt and be a crazy person like me.

Why Get Out of Debt?

1) It’s weighing you down emotionally 

DebtFor those of you that step back and think about how much debt you actually have, it is actually pretty scary. Most people have a house mortgage, two car payments, student loan debt, and some credit card debt, which could easily total $400,000+ dollars, if not over a half-million. When your income is less than $100,000 a year, that number can be pretty daunting. This is why most people just put their head in the sand and focus on making those monthly payments. After all, that’s what everyone else does right? (don’t make me say it…if all of your friends were jumping off a bridge…. 😉 you get the picture)

2) You Have No Extra Cash to Invest

After making that house payment, car payments, student loans, etc., there often isn’t that much money left at the end of the month. So for the first 10 years of your life, there are very few investments to be made. But, you figure that retirement is a long way off, so you can always put money aside for that when you’re older. The only problem is, compound interest will help you very little when you start investing in your 40s and 50s. If you had the money to invest when you’re young, compound interest could easily quadruple your money in the long run.

3) Debt Has You Physically Stuck

Not only can debt have you emotionally scared (and perhaps frozen at times), but it can also keep you stuck physically. For all of those people that purchased their homes when the housing bubble was at its peak, they are finding themselves “under water” today. They owe more money on their mortgage than the home is worth, and it’s keeping them from switching jobs to a new location, which may be better for them financially. But, since they have no equity in their house, they have no choice but to stay where they are until their house goes back up in value.

4) Are You Going to Leave an Inheritance?

It used to be that parents would leave an inheritance to their children. Lately, it has been exactly the opposite. Couples are only interested in keeping up with the Joneses and it’s causing them to rack up the debt without any hope of repaying it before they pass away. Instead of leaving their kids with a valuable home and cash, they are leaving the gift of their debts. Sounds pretty selfish to me.

5) The Borrower is Slave to the Lender 

If you have ever listened to Dave Ramsey, then I’m certain you have heard this phrase. It almost sounds cliche, but it is absolutely true. If you borrowed $1,000 from your friend, things are never quite the same between you two are they? If you still owe that friend money and you decide to take a $2,000 vacation, then your friend will probably pretty upset with you! You are really a slave to that person until you pay off your debt. The same is true for the credit company and the bank. If you decide not to pay back what you owe, you will be getting some pretty nasty phone calls in the near future! It is 100% better to not owe a dime to anyone. You can rest easy and you can be your own master instead of someone else’s slave.

Are you trying to get out of debt? What is driving you to do so?

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AUTHOR Derek

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.

9 Comments

  1. It’s the emotional weight that is the worst for us 🙁 We hate feeling like, whatever we do, we will always need $1400 after taxes each month just to make minimum payments on our student loan debt! It’s so defeating.

    • $1,400 is a ton of money – I can see why it’s weighing you down! Keep persevering and don’t give up! Once that student loan debt is gone you will feel so great!

  2. Debt just takes SO MUCH energy! The emotional weight, the effort it takes to try to keep up with everything and juggle your finances around to make things fit. It’s like playing tetris with the wrong sized pieces. People shy away from the effort it takes to make a budget and live by it….I know because I used to be one of those people. But once you start, it’s SO much easier to live within your means….

    • Well said Travis! Now that I am on my last piece of debt (my house), I have such a peace of mind and never have to worry about the size of my next paycheck. It gets deposited in the bank and adds to my savings. Not having any consumer debt is a wonderful thing!

  3. Interesting thought that occurred to me regarding the #5 statement as I was reading it.
    I think that people are less reluctant to borrow money from their friends/family, simply because they don’t want to tarnish the relationship. Like you said, if you owe your friend $1k, but at going on a $2k trip, it kind of defeats the purpose of borrowing from them. It’s almost polar opposite when you can switch that friend/family member into a “heartless/gutless corporation” such as a bank or payday lender.

    • It does make it totally different, but should it really be? From a moral standpoint, I feel the need to pay off my debts as quickly as possible. Apparently not everyone feels this need.

        • I thought you would Chris! Thanks for the comment!


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