Why You Should Pay Off Debt

It's been a crazy couple of weeks to say the least hasn't it? I've been in a bit of a sadness/grief with what's been happening so I've been quiet here on the blog. Trying to get my evenings back to normal so I wanted to write on some of the topics that have been in my head for a while.

Last spring Kevin and I kind of had a bit of a financial freak out during purchasing our home. Even though we weren't going over our budget for a home that combined with our debts we realized that it was nuts. We finally bit the bullet and took Financial Peace University. If you're not familiar with Dave Ramsey you should check out his book Total Money Makeover. It takes you through his principals of getting out of debt and building wealth. 
Why You Should Pay Off Debt by Musings of a Museum Fanatic

We realized that we had somehow wandered back into debt by taking out loans on cars when we really didn't need to. In the past we had tackled my student loans and literally had no debt! What were we thinking? It was too easy to go back into debt. 

Staying out of debt is really tough. It can seem so innocent having a car loan. You have to have a car right? Well there are some pretty important reasons to not have debt in your life. 

Reduce your bills
I think everyone can relate to the love of not having as many bills right? Well pay off that debt.Less debt equals less bills.  

You're spending more than you can afford
I think this is the mantra we had when we wandered back into debt. It's just X amount per month we can totally afford that. That type of thinking is what will get you in trouble. It's not about the monthly payment it's about the entire amount. You will payment yourself to death and deep debt. 

You're losing more money
This goes hand in hand with spending more than you can afford. You think you can totally afford a payment but have you ever looked at how much extra money you're spending by keeping all those payments? As we were working on finishing out our car debt I did the math on how much our interest was each month and it was like $60. That doesn't seem like a lot but it could be a nice dinner out! You don't even want to know how much extra you'd pay if you actually keep to the 30 year mortgage payoff. 

Have financial freedom
Have you ever been so worried about not making all your payments for the month? Maybe you realized a year into paying off something that it was just too much to handle. Having debt makes you beholden to those debts and the holders of your debt. This does not make for a happy life. 

It makes for stress and worry. Not having debts is a freeing experience. Turning in that last payment for our cars was so incredibly freeing! I can't wait to have that feeling when it comes to our home. Financial freedom isn't just a feeling though. It allows you to enjoy life. Without debt you're able to do things you've always wanted to do. Go on awesome trips. Give to others. Whatever you've always wanted to do but say to yourself if only I had the money. 

Increase your wealth
Having debt is a sneaky way to not have wealth. I always thought we were doing well since we could afford the stuff we wanted and could do things that we enjoyed. The more Kevin and I started to learn about debt and how it affects your finances the more we realized that really we were broke. 

It doesn't matter if you have savings if you have debt. They cancel each other out so you're actually in reality broke. This concept took some getting used to but when we accepted it we wanted to change that! Now moving forward we can work on our wealth building full force. 

Reduce risk
Debt is risky. You don't know what could happen in life. As someone who hit adulthood right as the Great Recession was starting I can attest to that. I'm not talking about just something financial. Nothing is ever certain. Who knows if you are still going to be at your current job. Maybe someone passes away. Who knows what things good or bad could totally change your life. 

If you're in debt this is a huge risk with all sorts of big life changes that could happen at any time. I believe this now more than ever. I'm so glad we don't have the car debt anymore. Who wants to deal with something that can be preventable risk?  

Thanks so much for stopping by! You can also join me on InstagramTwitter, and Pinterest. In addition to life-capades and doing it for yourself, I love all things 'real life' so use the hashtag #museumfanatic on social media so I can see your beautiful unstaged life. Oh and on the top of the side bar to your right, you can follow me on Bloglovin or on social media to be alerted to each new post!

Post a Comment