Tuesday, July 31, 2018

Debt Free

                                                 Hello Family, How Are You Today?

                       The Feeling of Being Debt Free

 It's GREAT! But at the same time, life goes on. It contributes to one's happiness, but it is not happiness itself.

Being debt free means your stress level goes down. It means you have more options and flexibility in life. The option to save. The option to live a slightly better everyday lifestyle, or maybe some of both.

Being debt free can set off a "virtuous cycle" whereby you take the money you were putting toward debt payments and apply it to savings/investments. As your savings and investments grow over time, your margin of safety grows. So when life's misfortunes come (job loss, car repairs, etc.), they are at least a little bit easier to take. When you're not desperate, you feel more at ease to negotiate that better salary for yourself and/or don't have to snap at the first job offered. You have the cash available to plan and stock up on things when they're on sale, which grows your margin of safety some more, etc.

I guess I really haven't ever been tempted to slip back into old habits. I basically have permanently raised my standards for what's financially acceptable. That means my 'red alert' button goes off long before most other people's. I try not to wait until there's a crisis to solve a problem. When you're saving a healthy portion of your income (i.e. more than 15%) as a normal thing, then that just becomes your standard for "normal"....and when you dip below your usual savings rate, you view it as a "problem" where most other people wouldn't until they were thousands in debt on their credit cards. Much easier to solve your problems when your savings rate has dipped to 10% than when you are running up credit card debt at double digit interest rates.

I think having long term goals also helps. People who like planning usually do better financially than those who don't. I keep track of my net worth and I like projecting the numbers out toward retirement. When you value flexibility and freedom more than the things money can buy (such as freedom to walk away from a job you hate without worrying where the rent will come from next month), it's easier to stay focused on long term goals. Also, when you realize that after the most basic necessities are covered, having more "stuff" doesn't add all that much to your happiness, it becomes easier to save, so buying things you don't really need just isn't that much of a temptation. Try being debt free you might like it . If not you can always go back to being in debt again.

                                               Have A Great Cheap Cheetah Day & Save That $$

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