If I was awake, I was thinking about debt, scheming for a way to get out faster than what was even mathematically possible. And you know what? I succeeded. On a $55k salary, I paid off $22,000 of consumer debt in 6 months, and then destroyed my home mortgage of $54,000 in less than a year. I hated debt so much, I didn’t care that the numbers didn’t make sense. Nothing was stopping me. That debt was going to die a short, gruesome death. Today, roughly 4 years later, I’m shocked to discover that debt doesn’t bother me like it used to… I’m back in debt, and not really in much of a hurry to get out…
7 Reasons Debt Doesn’t Bother Me Like It Used To
I know what you’re saying right now (or rather, what you’re yelling at your laptop screen)… “Derek, who are you?? I feel like I don’t even know you any more! How can you even call yourself a personal finance blogger??”
Well my friends, I guess this is why I called my site, “Life And My Finances” way back when. Even though I was completely money driven in those early years, I apparently still had the foresight to understand that money isn’t everything, and it certainly isn’t nothing. Rather, there’s often this combination of life and money. And, without a mix of both in some weird sort of uneven tango… our world and our existence just doesn’t work. We can’t properly function with just one or the other.
In short, debt doesn’t bother me like it used to because life has happened to me…more than once.
But anyway, since the long answer is often more fun and entertaining, let’s go there.
1) It’s Been Too Long Since D-Day
You know how countries fall because the future generations forget what truly made it great in the first place? And, they then end up taking the fruit of the ancestors for granted and it all falls through their finger tips?
For any of you history buffs, you know this stories better than I do. It has happened again and again throughout all of history: Rome, Persia, the British Empire…the list goes on and on.
Do you know what’s really interesting though? I’m discovering that even in my own life (and not across many generations), I’m beginning to soften on topics that I used to have a fiery passion for just 5 years ago. With time, I think this is natural for all of us.
Back in the day, my entire life revolved around debt and fricken just getting rid of it as fast as possible. Today, I still don’t want to do anything extremely stupid, but a little bit of mortgage debt (which is exactly what I did) probably won’t kill me…
Time heals all wounds, and apparently it reduces our testosteric motivations as well.
2) The Low Rates Make It Easier to Ignore
Our current mortgage rate is 4.25%. With the sale of our last house and our flip house, we were able to pay down our new mortgage to just $22,000. So, with our $1,327 payment each month, about $1,250 goes to the principle, and just $77 gets “lost” to interest each month.
Now, would I rather keep $77 in my pocket each month?
But since the great majority of my payment is driving down the principle balance, it becomes a little easier to ignore…and therefore do absolutely nothing about it. Just one of the many reasons debt doesn’t bother me as much as it used to.
3) We Have a Solid Cushion, Which Makes Debt Easier to Ignore
With two kids at home and only one primary income (my wife has the much tougher job of staying at home with the kiddos and making them into respectable human beings), we have decided that instead of paying down the mortgage and leaving ourselves with just a few hundred bucks in the bank, we’d rather have a beefy savings and pay down the mortgage a bit more slowly.
The funny thing is, the more money you have in the bank, the less you care about that looming debt that’s still hanging over your head. Sure, you could chunk the majority of your savings at it and pay all your debts off today, but then that warm fuzzy feeling of having money in the bank would be gone.
In short, the debt payment doesn’t really affect us that much, so instead of getting mad and paying it down like crazy people, we just haven’t addressed it and continually punt that decision down the road…
I’m not at all proud of this fact, but it has become our new reality…
4) Time Is Way More Valuable Today Than It Used to Be
Like I mentioned before, I have two kids and a wife. Life is WAYYY different today than it was just 4 years ago.
When I get home after a long day at the office, my first thought isn’t to do extra work so I can earn an extra $100 that I can throw at my mortgage.
My first thought is to play with my 3 year old daughter that’s yipping on the other side of our house door because she’s so excited I’m home. And then to spend time with my 7 month old boyo who’s just starting to crawl! And then of course to spend some time with my wife after both of my wonderful kiddos go to bed.
After my wife goes to bed, I might pop open my computer and write a kick-butt article like this one, but I have little motivation to do much else…
My time today is precious, and apparently even a mortgage payment won’t tear me away from my priceless moments with my family.
5) Experiences Hold More Weight Today
When I was young and single, I didn’t care one iota about experiences.
- Eating out
- Visiting new places…
Nope… I was all about saving up money, going nowhere, and trying to have fun without spending a dime.
Today…things are a little different.
My memories back then would have been just of myself, and you know what? I’m just not egotistical enough to care about myself that much. 😉 But, now that I have a wife, kids, aging parents that I value more with each passing day, I’m more prone to want to create memories!
And what are the best ways to create those unforgettable memories? Create unforgettable experiences!
Today, I absolutely love to take our kids to Florida during the winter, to go to new places locally in the summer, and to take mini-trips to visit friends and relatives whenever we have a chance. Yes, they cost money, and yes they take time away from my money-producing hobbies (like this site), but they are worth far more to me at this stage in life than they ever have before!
6) The Loan is Getting Paid Off Quickly Anyway
In the beginning of January, our house loan was $22,000. Today, just a few months later, that loan is already in the $18,000 range. Over the course of just 20 months or so, this loan will be paid in full.
Most people have home mortgages for 360 months (or longer if they refinance!). Ours will last just 20 months… That’s pretty fast.
If we dialed up the effort, we could probably pay it off in 10 months…but to what benefit? We’d save about $500… But at the same time we’d totally ignore our kids for nearly a year. It’s just not worth it. Our mortgage is going to be paid off quickly whether we focus on it or not.
7) We’re Making Other Important Investments
Out of all seven reasons debt doesn’t bother me like it used to, this one is really the kicker – we have a handful of other investments that we simply consider more important.
- Continually funding our retirement accounts
- Beefing up our (tax-free) HSA account (reminder, we have children that WILL hurt themselves and cost us loads of money in the future)
- Saving up for private schooling (for both kiddos)
- Investing for college
When it’s all added up, we invest $1,400 a month in the items above. When you consider the $1,327 that we’re also putting toward our mortgage each month, there’s not a ton left to do anything with.
So, essentially, we place a higher value on retirement, our HSA, and our kids’ education vs. the mortgage balance. And quite frankly, that’s probably the way it should be!
Debt Doesn’t Bother Me Like It Used To – What About You?
So what does this mean for you? Since I, the personal finance guru, am ignoring the aggressive mortgage repayment route, should you be doing the same?
It all depends on your situation.
If you have a huge mortgage and no kids, then you should probably be tackling that debt with a vengeance. That way, when you do get married and have some kiddos of you own, you won’t even have to worry about these decisions! You’ll have a paid-for mortgage, no other debts, and you can simply focus on your family and your future investments (both for your retirement and for your kiddos).
If, however, your situation is very similar to mine, then it probably wouldn’t be such a bad idea to focus on your spouse, your kids, your parents, and the value of life in general vs. the almighty dollar. Remember, this site is called, “Life And My Finances” and your decisions should probably follow that order as well.
What will greatly improve your life? And then…what will improve your financial situation as well?
Are you shocked and appalled that debt doesn’t bother me as much anymore? Or does it make all the sense in the world?
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.