When you’re carrying debt, sometimes it feels like you’re standing at the bottom of a hole, just looking up. Your debt has built up all around you and you feel stuck, unable to get out.
Even though I have successfully climbed my debt mountain, I still talk about debt all the time. I mean, it’s all around me. Most people in my life have some sort of debt- usually student loans or credit cards. I even have one friend with mortgage debt! I get it- we’re young and just starting our lives. Things cost money, and we make very little of it. College is costly. Apartments are costly. Food is costly. It’s just for now though, right?
WRONG! According to the Federal Reserve Bank Of New York, $323 billion of student loan debt is held by those who are 40 years old and older. Worse still, the average American doesn’t expect to be debt free until age 53.
Debt has been accepted as a natural part of life, not matter what age you are. When you’re younger your mindset may be just what I said above: life costs money, and you’re starting to put your life together. It seems to just snowball from there.
First, you’re just starting out and need stuff- a car, a college degree, a trip to Europe in your twenties that you put on a credit card. Then you’re in your thirties. It’s new clothes for the kids, a house and a bathroom remodel. Then you’re in your forties and fifties, and it’s sending kids to college, a kitchen remodel, dinners out, and all that travel you never did finish in your twenties. The reasons to go into and maintain debt never seem to end.
Except that they absolutely should come to an end. Today. Debt is not normal. What’s more, debt doesn’t have to be forever. By getting out of debt you open yourself up to the whole world. Your limitations take off and leave you weightless. It’s a wonderful feeling!
Knowing that there’s always going to be the risk of debt in my future lights a fire under my butt to pay off debt now and avoid letting it clog up my future. Pardon my French here, but shit happens. You can’t account for everything in life. Take this scenario: Shit happens and I end up with a $5,000 medical bill tomorrow. I blow through my emergency fund and end up right back in debt, to the tune of $2,500. Imagine I hadn’t paid off my student loans so that debt is just added to my student loan burden.
Take this scenario: Shit happens and I end up with a $5,000 medical bill tomorrow. I blow through my emergency fund and end up right back in debt, to the tune of $2,500. Imagine I hadn’t paid off my student loans, so that debt is just added to my student loan burden.
Remember, my student loans started at $25,302. Two years in I was still carrying a balance of $18,000. Adding any more amount of debt to numbers like that, when I make under $30,000 a year is serious business. I know I want to get out of debt and hey, it’s only an additional $2,500 in debt. I can still pay that off.
Life goes on. Now I’ve got no safety net, more debt, a low income and every day brings the possibility of total financial ruin. One more $5,000 bill and that’s it. That’s my whole life right now, gone to debt. I’d be swimming in debt even as other life events come and go. A wedding, or purchasing a home become out of reach. All of my life’s dreams are going to be dictated by my debt.
By paying off my student loans and working to increase my savings right now, I’m taking care of myself in a very concrete way. I’m making sure that a surprise situation won’t be a totally devastating blow in my life. I’m giving myself the ability to weather bigger blows. I’m starting out down a road where there is financial security rather than fear.
I want that for myself, and I want that for you too! Don’t let your current debt become your future debt. If you’re 25 and know that you want to own a house someday, don’t carry your student loans until the day you apply for a mortgage. Tackle debt as it comes, as fast as you can.
It may always be that reaching for the credit card seems like the easy way. When you’re standing at the bottom of your debt hole you may be tempted to think “I’m already down here. What’s a bit deeper really going to matter?” It does matter though. If you want to get out of that hole you have to start climbing UP, not digging DOWN.