I paid off our car this morning. Andy and I are officially debt free. I haven’t been debt free since 1999. During that time I bought a $500 car and paid it off pretty quickly and was debt free for about a year. But then I got a Target credit card and bought gifts I couldn’t afford for people who didn’t care if I gave them a Christmas gift. From then on, I accumulated various debts: cell phone bills, dentist bills, car payments and student loans. Poor Andy was debt free when I met him in January of 2002. Helped me pay off the vast majority of my debt. And then together we accrued debt together.
Being in debt is so natural for us Americans. I don’t know too many people who aren’t in some type of debt. For people who owe, it’s mortgages, then student loans, and finally credit card debt.
I grabbed this nice screenshot from Nerd Wallet:
More debt means less savings. Less savings means that your emergency savings is less than you need and retirement savings is inadequate for the future. This leads to a vicious cycle of borrowing more money. It’s hard to save money when you have no money.
A lot of my debt came from living a lifestyle I couldn’t afford. When I was younger, I spent money without any regard for the future. I didn’t save any money so when an emergency came up, I was in a tough spot financially.
It has taken a lot for me and Andy to get to a place in our life where we have no debt. We stick to a budget, we shop sales if we need something, we plan for larger expenses, rarely go out to eat, and the biggest one: we talk about money. A lot. It’s hard to be frugal in this world. I work downtown and see the shops with the gorgeous bags and beautiful books in the window. I walk past numerous food carts on my way to work only to eat my bagged lunch. But I think being debt free is more important.
These are some of the blogs I’ve been reading for a few years that have taught me some great financial lessons: