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Five More Reasons to Become Debt Free

freedom from debt

Everyone knows that paying off debt is a great way to build wealth and ensure that setbacks and emergencies won’t send you into a downward money spiral. For that reason alone, kicking debt to the curb is always a great idea. Since paying of consumer debt a few years ago, I’ve also discovered some new reasons to become debt free. Great Career Opportunities When we were working to pay off our credit cards, there was no way on earth Jim or I could have thought about changing jobs. We were too dependent on our paychecks to seek out or take advantage of other opportunities. In fact, I really didn’t see lots of opportunity other than one foot in front of the other. I’m not sure if they weren’t there or if I didn’t have the flexibility to see them, but I know changing jobs was not an option during that period of life. Now that we don’t have consumer debt, it seems that job offers are pouring from the rafters. Besides my full time offer from the government, Jim was asked to take on a new management position a few weeks ago. While we most likely won’t accept either of ...

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Can You Help People Who Don’t Want to Help Themselves?

helping family members

Lord knows we’ve made our share of financial mistakes in the past. Once we got sick and tired of being chained to debt, we did something about it. In all honestly, we didn’t have the first clue about what to do or where to start, but by searching, studying, and asking for advice, we learned how to take control of our finances. Being in control gave us our lives back. Now, when I see someone struggle as I once did, my first instinct is to help. Sadly, I’ve found that almost never works. Can you help people who don’t want to help themselves? Change is Scary There are far worse things in life than being in debt, but since this is a financial blog, we’ll put everything in the context of money issues only. Have you ever wondered why people who struggle financially seem to repeat the same mistakes over and over? I think it’s because change is scary. Even if your life is in financial ruin, it might be all you’ve ever known. Sometimes, in it’s own weird way, dysfunction is comforting. As long time readers might  know, we’ve gone to great lengths trying to help family members who ...

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When Should You Consider a Debt Relief Program?

using debt consolidation

Households in the US carry an average of $7,400  in consumer debt. Whether indebtedness comes from having to use credit after loss of a job, a large medical bill, or from years of overspending, there comes a time when bills outpace income and something has to give. No one sets out to have crushing debt payments, but unfortunately that’s how many people end up. Sometimes those in debt need outside help to manage their situation, but when should you consider a debt relief programs? Can I Pay Off Debt on My Own? Before consulting a debt relief agency, determine if it’s possible to pay off balances on your own. Is there a way to cut expenses or increase income enough to make payments more manageable? Credit card companies may work with you by lowering interest rates or it may be possible to transfer high interest balances to zero interest promotions. Remember that promotional offers may charge a fee for balance transfers and there is usually a limited time period before interest rates go up. If you can’t pay off the balances in the allotted amount of time, or if your credit is not good enough to get interest rate reductions, it ...

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Being at Peace With Debt

paying off debt without stress

With of Americans carrying almost 12 trillion dollars of debt, it seems inevitable that we’ll all owe someone money at some point. I was reading an article about student loans recently and it listed a concept that many in the personal finance community don’t understand or support; coming to peace with debt. At first glance, I was ready to write the whole article off as one of those advice pieces that are about as helpful as payday loans or 18 months with no interest until I read further and decided that maybe being at peace with debt isn’t such a bad idea after all. Debt Can Control Your Life It’s very easy to let debt control your life. One example is after overextending yourself to the point where minimum payments are forcing you to live paycheck to paycheck. In this situation, the end of the money happens before the end of the month. You’re forced to dig further into debt keep the household running. The other example is when you have a sizable debt, something like a mortgage or student loan, and you can’t get over the fact that you’ll owe money for years. Even though these are considered “good ...

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Is It Better To Invest or Be Debt Free?

paying off debt quickly

A big reason many people put off investing is debt. It doesn’t really make sense to ramp up investments while paying 21 percent interest to credit card companies, but what about low interest debt? Obviously the answer depends on many variables including income, how much debt you owe, and if you are investing for short or long term goals. We currently have lots of mortgage debt, mostly from investment properties, that we’d like to see paid off quickly. However, we don’t want to miss out on investment gains and compound interest either. Is is better to invest or be debt free? Completely Debt Free In Six Years! Assuming we maintain our current level of income and expenses, if we were to stop investing in our 401k’s, IRA’s, and taxable brokerage accounts and put all the money toward paying down mortgage debt, our primary home could be paid off in about three years. The commercial building we own will be paid off in a little over four years. At that point, we could throw everything toward the other rental house and four plex, paying those off in another two or three years. If we went for that strategy, we would own ...

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