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And im asking those of you who used to be deep in debt but managed to dig yourself out of it and now are living a debt free life. How does it compare to before and how do you deal with temptations and have you ever been close to slip back into old habits?
And im asking those of you who used to be deep in debt but managed to dig yourself out of it and now are living a debt free life. How does it compare to before and how do you deal with temptations and have you ever been close to slip back into old habits?
It's GREAT! But at the same time, life goes on. It contributes to one's happiness, but it is not happiness itself.
Being debt free means your stress level goes down. It means you have more options and flexibility in life. The option to save. The option to live a slightly better everyday lifestyle, or maybe some of both.
Being debt free can set off a "virtuous cycle" whereby you take the money you were putting toward debt payments and apply it to savings/investments. As your savings and investments grow over time, your margin of safety grows. So when life's misfortunes come (job loss, car repairs, etc.), they are at least a little bit easier to take. When you're not desperate, you feel more at ease to negotiate that better salary for yourself and/or don't have to snap at the first job offered. You have the cash available to plan and stock up on things when they're on sale, which grows your margin of safety some more, etc.
I guess I really haven't ever been tempted to slip back into old habits. I basically have permanently raised my standards for what's financially acceptable. That means my 'red alert' button goes off long before most other people's. I try not to wait until there's a crisis to solve a problem. When you're saving a healthy portion of your income (i.e. more than 15%) as a normal thing, then that just becomes your standard for "normal"....and when you dip below your usual savings rate, you view it as a "problem" where most other people wouldn't until they were thousands in debt on their credit cards. Much easier to solve your problems when your savings rate has dipped to 10% than when you are running up credit card debt at double digit interest rates.
I think having long term goals also helps. People who like planning usually do better financially than those who don't. I keep track of my net worth and I like projecting the numbers out toward retirement. When you value flexibility and freedom more than the things money can buy (such as freedom to walk away from a job you hate without worrying where the rent will come from next month), it's easier to stay focused on long term goals. Also, when you realize that after the most basic necessities are covered, having more "stuff" doesn't add all that much to your happiness, it becomes easier to save, so buying things you don't really need just isn't that much of a temptation.
Last edited by mysticaltyger; 06-17-2014 at 04:12 AM..
I have never been in debt so I cannot tell you the negative feelings associated with that. However, being without debt to me is one of the essentails of feeling free. I haven't had a single day in the last 10 years where I had to check my account balance to make sure I can pay my bills, I hardly ever know when my payday is nor have I had to think twice when purchaseing something to find out if I can afford it. When you experiance this for the first time, you will never want to go back to having debt. So I guess thats why I have never had temptations to overspend. The feelings associated with being debt free have kept me motivated not to.
I have never been in debt so I cannot tell you the negative feelings associated with that. However, being without debt to me is one of the essentials of feeling free. I haven't had a single day in the last 10 years where I had to check my account balance to make sure I can pay my bills, I hardly ever know when my payday is nor have I had to think twice when purchasing something to find out if I can afford it. When you experience this for the first time, you will never want to go back to having debt. So I guess that's why I have never had temptations to overspend. The feelings associated with being debt free have kept me motivated not to.
Yes, all of that is correct.
However, believe it or not, a lot of people are kind of used to living in a crisis oriented way, especially if their parents were broke or in debt. There are many people who can't handle stability, psychologically speaking. So, for them, their "normal" is to be broke or in debt. Having a margin of safety is actually outside their comfort zone. I lived with someone like this when I was younger. That psychological pattern can be extremely hard for people to break.
I have never been in debt so I cannot tell you the negative feelings associated with that. However, being without debt to me is one of the essentails of feeling free. I haven't had a single day in the last 10 years where I had to check my account balance to make sure I can pay my bills, I hardly ever know when my payday is nor have I had to think twice when purchaseing something to find out if I can afford it. When you experiance this for the first time, you will never want to go back to having debt. So I guess thats why I have never had temptations to overspend. The feelings associated with being debt free have kept me motivated not to.
Im almost debt free. My husband and I have paid off almost all our debt, over 20k. It's hard to imagine a life without it. Another 550 dollars a month will open up for us. That along with husbands pay raise of $9 k a year. It's hard to imagine a life without debt.
My husband and I are almost 100% debt free. When we got together, I was unemployed and he had a ton of debt from his ex-wife. We pulled together and I managed the bills. It took us 3 years but we paid off everything and started saving. We bought our retirement house and for the 3 years before he retired, we made principal only payments in addition to the regular payments. We reduced the mortgage down to under 10 years and we have enough in savings to pay it off in full as well as continue to make the improvements we want.
We just bought a 2nd vehicle by putting it on an empty credit card (always as we pay in full each month) and we used the savings from the "buy a 2nd vehicle savings account" to pay it off when the bill came in. We got cash-back from using the credit card also.
We are so relaxed and, although we never argued over the bills, I'm sure it contributed to some disagreements back in the counting pennies days. Life is so much more pleasant now and his blood pressure is back to normal.
LOL no (I wish I could've paid cash), so technically I have debt. But that's the only debt I have. I wrote my first post under the assumption that the OP was referring to debt that was hard to manage or living beyond ones mean. I bought my house 5 years ago and I'm on track to pay it off in 4-6 more years so I should be completely debt free then.
Quote:
Originally Posted by mysticaltyger
Yes, all of that is correct.
However, believe it or not, a lot of people are kind of used to living in a crisis oriented way, especially if their parents were broke or in debt. There are many people who can't handle stability, psychologically speaking. So, for them, their "normal" is to be broke or in debt. Having a margin of safety is actually outside their comfort zone. I lived with someone like this when I was younger. That psychological pattern can be extremely hard for people to break.
Your absolutely correct. I actually read an article on this type of thought process and poverty. Its very interesting how we can let ourselves get "stuck in a certain mindset" even when its harmful to us.
When growing-up, 'debt crisis management' was pretty much a way of life ... 'Should we pay the rent on time ... or buy groceries ... or do something else with our always insufficient income?' (The cause wasn't so much mis-management, as a single mother trying to raise three kids on secretarial wages ... without welfare).
Therefore, after I grew-up and had my own family, 'living within our means' and staying out of debt (except for an occasional mortgage or car payment) was a BIG deal. As we moved along in our lives, we were gradually able to pay-off mortgages and car loans (in addition to 'giving', which was always a BIG deal to my wife - and soon to me). Because of our stable, relatively debt-free lifestyle, we also actually had some control over our retirement planning, which today remains a really BIG deal... as we live-out retirement without debt or financial pressure!
IMO, as long as one is not living well below the poverty-line, debt-free living, like debt itself, is more of a reflection of one's priorities, than a measurement of one's financial condition. If debt, freedom and control over one's life are 'no BIG deal,' then the things that are considered priorities will 'rule' one's life (always bigger and better ... houses, cars, vacations, appearances). If paying one's bills, saving, giving and staying out of debt are a BIG deal, then one's priorities and life will reflect that. Many folks would like to suddenly be 'out of debt', but, lack the discipline and priorities to work at it over a long period of time.
I had been completely debt free. For 20 years I owed no money to any one for anything. The feeling is indescribable. Until you are completely out of debt the feeling you get will be foreign to your system. Being out of debt gives unbelievable power over your life. Saving money just happens without thinking about it just because you can't spend it all.
Shortly after becoming debt free you find your self just paying cash for that new car without thinking about it. There are expenses to go away like life insurance. Why pay for life insurance when you have more money then the insurance would pay in your savings account. You don't need full coverage insurance for that car because if you total it, just buy another one.
To bad 90% of the population will never get to experiance this feeling.
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