Say it with me people: Debt is bad. For everyone. All the time. No matter what kind of debt you have, it’s bad. I have been battling my way out of student loan debt for the past 3 years. I graduated college in 2011 with $25,302 in loans. Not as much as some people, and not record breaking by any means. Not a sum to simply sneeze at either, though. I graduated right into the Great Recession and finding a job was (pardon my French) damn near impossible.
Only being unemployed wasn’t an option for me, not with this debt hanging over my head. I had to make my monthly minimum payments and I had to make them every month.
No matter if you debt comes from student loans, credit cards, medical bills or car loans, when you’re in debt you are not in control. You have to meet those payments or the punishments you incur can be worse than the original debt. Late fees, garnished wages, declaring bankruptcy (student loans are really difficult to include in bankruptcy)- these can all be huge blows to your already tenuous finances.
Some people try and trick you with the phrase “good debt.” Things like student loans and mortgages are supposed to be “good debt” because you wind up with something (your education or a house) at the end of your payments. This is a little white lie, my friends. While I’m sure those people are full of good intentions, they’re not thinking with their financial brains.
As I mentioned above, there are some truly horrifying worst-case scenarios that come along with student loan debt, and the same is true for mortgages. While yes, you are coming out with some sort of “thing” at the end of these debt periods, you are still in debt. You are still responsible for paying each and every month, you are still paying interest, and you are still not in control of your entire paycheck. Remember our mantra: all debt is bad.
So then, getting out of debt is the best way to protect and grow your finances. It’s the best way to prepare yourself for the rest of your financial life. Once you are debt free you begin to own your money. You no longer have to send a portion of you paycheck off to some faceless company each month. Your entire paycheck now belongs to you. And with that blissful fact comes a multitude of options for you.
Debt Free: Way to Be!
Once you’re debt free you can begin to think in larger financial pictures. You can make very grown up decisions and start saving for a house or a wedding. Adulthood suddenly becomes less scary and more manageable. You can spend guilt-free on things like travel.
No longer do you have to choose between debt payoff or retirement savings. You have a flexibility heretofore unknown! You have a chance to establish money patterns that work for you and will hopefully prevent you from ever being in debt again.
Having power and control over your finances is the first true step to financial security and independence. Becoming debt free is key for this security.
Are you currently in debt? How do you plan on getting out?