Life After Debt: The Biggest Downside to Being Debt Free

“Our whole society is geared towards getting into debt and staying in debt for a long, long time. It’s actually a daily struggle to stay out of debt, because the idea of being in debt is so widely accepted and mainstream that I look like a crazy person for saying “no” all the time.”
This is so true. Being in debt is the American Way. It can be hard to be the weirdo who says no to everything, especially when all of your family and friends are telling you that you can “afford” it. We used to be a bit embarassed by that. Now, we wear it as a badge of honor.

Wow, I’ve never really thought about it. I guess I would just direct the money that was going into paying off the debt into a separate account, and just continue saving it instead of paying down the debt?

I’ve thought the exact same about saving: How do you save enough, and what is enough? Dealing with money is so much about numbers for me that it’s frustrating when there’s no answer for things like this.

I’ll just say another downside to paying off my debt last year is that I often wonder if I would’ve been better to save more rather than going so hard at paying debt free. I don’t regret it, and it was a personal decision for me. But it’s a little more of something to think about now that my self-employed income is less stable than when I had a job.

This sounds similar to how I felt after I started working again and had gotten a few paychecks in the bank – over the last 6 months my all consuming obsession had been finding work so now that I had achieved that I found myself asking the question “Ok where do I go from here?” For you, you’ve been really focused in on this one task and now that you’ve crossed the finish line it is time to figure out what the next goal is. In my case now that I’m working again I’m back to paying off my student loan and rebuilding my savings. On the non-financial side I’m trying to be more social and do more activities outside of the house – suffice to say when I was unemployed I felt like a failure and didn’t really want to be around anybody or do much.

Something to consider as a next goal would be to build up an emergency fund of 3-6 months of expenses – or even possibly 12 months if you feel so inclined. In the May 2011 – May 2012 time frame I only worked for 3 months and one thing that was a huge help to me was the fact I had spent the previous year stockpiling money because I knew layoffs were coming so that helped me weather the storm a lot better than I would have been able to if I was living paycheck to paycheck. I remember hearing a speech buy a member of the European Parliament using the example of a ship about to sail into a storm and preparing by caulking the hulls and clearing the rigging and that is what everyone should do if they have an inkling a storm is coming.

The reason for the emergency fund is a) it keeps you from going back to the debt well and b) helps with feelings of security. I know the second one is kind of hard of quantify and for me I didn’t really “get” the idea of feeling secure until I got walloped and didn’t feel secure at all. Something I’ve become increasingly aware of is how stressful modern life is and I know it can’t be healthy mentally or physically to be under that kind of strain. I imagine if you took a poll of most people the biggest cause of stress to them in money related and according to every study I’ve seen that is also the biggest cause of strife among married couples as well.

Something I’ve noticed when comparing myself to my friends who are married – and I want to be careful here because I don’t want to come off as single guy trying to arm chair quarterback married people. But I feel that as a single person it is much easier for me to turn the proverbial boat and build wealth. Quite honestly I think a lot of people squander their single years by failing to build savings of any kind because that is prime time to do so. Plus listening to Dave Ramsey made me realize that many times a husband and wife are of a different mind set on how financial things need to be and it takes time to reconcile that. Dave himself admits to being both a numbers guy and a spender where as his wife, Sharon, is more interested in feeling secure and saving. Not to mention people calling in and explaining how they’ve scared their spouse to death with the total money makeover and turned Dave’s name into a cuss word in the house. That is why I think single people need to get financial discipline while they are just responsible for themselves, that way if and when they get married there is less weeping and gnashing of teeth on the financial front.

I am in total agreement with you about our society’s view of debt – that it is ok and worthwhile. I mean I would love to ditch credit cards and never use them but I can’t because I need a FICO score to be able to rent an apartment so I charge a token amount every month and pay it off over and over just to keep that score. The other thing is just the temptation of instant gratification “Oh you don’t need to save up for that new computer, just finance it with our handy, dandy finance plan!” Thank you Best Buy, you evil enablers…. Dave Ramsey had a great line on his show once ‘Wealthy people ask “How much?”, Broke people ask “How much down, how much a month?” Now I don’t want to sound cavalier about this because this temptation has been eating at me for the last 2 months like crazy. I spent a year having to lock down my spending and I really would *love* to get a new computer, new clothes, and a lot of other things, but there is other stuff that needs to be done first and I don’t particularly like it. But then again what I want to do and what I should do many times aren’t the same.

Lastly, I agree with you that in the end it is worth it, for the reasons you stated and I would bold and underline a zillion times the word CONTROL. If you have all the money going in and out every month and are massively over extended in terms of debt you have zero control over your income and you sure as heck can’t build wealth that way. I remember in the Millionaire Next Door them mentioning a woman who lived on 50% of her income and invested the rest and was able to retire with a multi-million dollar net worth and that is a goal I would like to push towards. Thing is though you can’t build wealth if you don’t have control over the tools to do it – and that is your income.

Congratulations again Carrie, hopefully I’ll be joining you in Debt-Free land next year!

I thought the hardest part of being debt free would be where to invest all of your extra money… Congrats again!

I am struggling with some of this, as we just paid off over $100,000 in consumer debt. Mainly, I am having to confront those things that straddle the want/need column, things like maintenance and upgrades that were put off to finance debt repayment.

This is absolutely true! Every time we get close to paying one thing off, we tend to take on another. Its kind of a vicious cycle! While I don’t know the magic number for how much is enough to save, I do know that keeping your expenses in check is what you really want to sick the hounds on.

I’m so close to writing this same thing — I’ll be debt free in less than a month, and it’s at least as terrifying as it is exciting.

I’ve been debt free for three years. What my husband and I did was look at what we used to pay every month towards that debt, divided it by half, and funneled it into our regular budget The other half went into savings. That half we chose to spend could be for a short term goal like travel. It’s worked for us thus far!

Although I do not have ANY temptation to get back into debt – the daily struggle is 100% right. Once you figure out how to turn yourself around (usually fear-driven – at least it was in my case), you have so much fear of “going back there” and it stays with you every day. And it’s true most people don’t talk about it – maybe because talking about it is also scary. I’m proud of getting myself out of debt (I did it by actually buying my first home and getting roommates to pay for most of my mortgage – allowing me to put a lot of my original living expenses towards my debt).

That was about 15 yeas ago – since then, there is one more thing I learned that I think people in “our” situation can learn from – finding a soul mate that is on the SAME PAGE in terms of financial responsibilities. Yikes, yes, touchy subject – but money is the biggest reason why people get divorced. Yes – I got divorced a year ago – money was a big part of it (although in my opinion, it was a secondary, indirect reason; I consider *trust* the primary since the money issues were hidden from me) – we just weren’t on the same page on how important financial responsibility was. And considering people are SO sensitive about money and spending and shopping habits and such, especially during dating – it makes it even harder. Especially during dating, since that’s when people are trying to impress each other – no one is going to admit they have a spending/shopping problem or are financially irresponsible. Unfortunately, in most cases, that’s something you find out after you get married… the hard way… unless you are lucky to find someone who believes being honest and truthful is more important than protecting their ego.

I’m very happy to be financially stable after my marriage – no more hidden credit cards (or even identity theft through credit cards obtained with my name – but that’s a whoooole separate conversation). But to add to your “daily fears” – finding a partner that is also on the same page is hard. In my case, moreso because of my experience, I also have a fear of people hiding their financial irresponsibilities and not being honest (or asking for help) about it.