Why I Love Being Debt Free

Kraig | August 17, 2012 | 22 Comments · Doing What You Love

This morning, I read an article by a friend and fellow personal finance blogger, Carrie from Careful Cents, titled, Life After Debt: The Biggest Downside to Being Debt Free. Carrie sheds light on some of the struggles that we face financially even after we are debt free. This article inspired me to think of the opposite side of this, so I wanted to post today about why I love being debt free.

For those of you new to this blog, I've been working on all this personal finance stuff for several years now. As a reporter that I spoke with last week from a large newspaper in New Jersey said to me, I wasn't in much debt. At my lowest point financially, I owed $20,000 on my car, $2,500 on my credit cards and $5,500 on my student loans, totaling $28,000. That was just over 4 years ago. Sure, it wasn't as much debt as many people have today, but to me it was a lot. I bought a car I couldn't afford and financed 100% of it. I even put its down payment on my credit card. As you can see, I wasn't afraid to go into debt. Well, that all changed soon after. When reality set in and I figured out how many years of working hard it would take to pay that car off along with my other debt, I freaked out. I was so freaked out that I immediately started throwing all my extra income to my car. I was writing $1,000 checks each month to GMAC (my car's lien holder) and it was leaving me with no cash in the bank. I did however manage to knock out $7,500 of my car loan in the first 6-7 months of owning it. That helped a lot. During that time (fall 2008), the economy tanked and I had to stop being crazy with my car loan and start piling up some cash. I stopped paying on my car for the whole year of 2009 (I didn't have to pay that whole year because I was so ahead). At the beginning of 2010 when I had to start paying again, I knew what it was like to have cash in the bank for once. I had piled up $10,000 on a modest income from the prior year. In the spring of 2010, when I needed a double root canal done without insurance just days before an expensive vacation I had planned, I ate through a large chunk my savings. I had managed to go 6 months in 2010 without making a bit of financial progress. On Memorial Day that year, I said "That's enough. I'm cutting big." Seven months after saying "I'm not living like this anymore", I was out of debt. It's crazy what you can do when you put your mind to it. I knocked that debt out like nothing. You can knock yours out too if you put your mind to it. Trust me. Anyway, for almost two years now, I've been debt free. To be honest with you, I NEVER want to be in debt again. It's been a great two years. My financial stress has almost completely went away. Not only have I been able to stay out of debt since, but I've saved up more money during the last two years that I would have ever thought possible. I have over 2 years of living expenses in the bank. It's very comforting. Now, let's get to the point of this post. It's the point of how great being debt free is. Here are the main things I love about being debt free:

I don't have to use my credit cards anymore

With a healthy savings account, I don't have to use credit cards for anything, if I don't want to. Sure, I'm missing out on my points and rewards, but honestly, it feels so great to log into Mint.com and see zeros next to my two credit card balances. It's almost a form of medicine for my peace of mind. I love swiping my debit card through the machine at Target, the gas station or even the at the mall without having to worry about how or when it's going to get paid. I know that it will get paid right now with the money I have right now in my checking account. Yes! I love paying for things right now with money I have in the bank right now! You can't tell me that getting points or rewards on your credit cards feels as good as this feels. I won't believe you.

I don't have to see any debt payment bills anymore

Back when I was in debt, I received a GMAC bill every month for $351. That wasn't a fun bill to get. My student loan bill was paid automatically, but I still saw it as a line item in Mint.com every month. Those credit card bills were horrible to receive, especially when I spent to much and they were in the several hundreds each month. Ouch. Today, I have all of my monthly bills set up automatically and none of them are debt payment bills. It's so great!

I get to use my income to build wealth for myself instead of my creditors

It's so great not having to budget for debt payments. My monthly expenses are directly related to how much my living costs are this month and not at all related to crap I've bought in the past. It's great. This means that I get to use my entire income for me each month. Sure, I have to spend money on rent, food, insurance and all that stuff, but I get to use what's left over for me. I get to transfer money over to my savings account every month. I can actually build wealth now that I don't have to send all my money to creditors to help them build wealth. Forget helping all those corporations get rich. My money is for me now!

I can buy and do almost anything I want, but I don't

It's fun thinking about all the options I have now that I'm debt free. I could quit my job and pursue something else. I could take a vacation several times per year. I could buy almost anything I want in cash (outside of extremely expensive things like a house). I could invest in all sorts of things. I could give like crazy to those in need. I could move across the country. I could do a lot of things. Just thinking of all my options is fun, even if I don't do any of them.

I feel great about myself and my ability to control my money

Ever since I've gotten out of debt, I feel very confident in my financial decisions. That's probably because I feel getting out of debt was the best financial decision I've ever made and I'm happy with myself about it. People were telling me I was nuts. They would say, "Why would you pay your car off? You have such a low interest rate." I would just shrug it off. You know, my student loan payment was only $60 per month. Why on earth did I pay that off? I didn't even notice that money coming out of my account each month. Well, I'm glad I did anyway. I'm out of debt and with an attitude like that, I would still be in debt and probably not as well off financially as I am today. Overall, I feel great about having gotten out of debt and making the decision not to go back in. Sure, I'm missing out on low interest rates while I could be investing the money in something earning a higher return. Sure, I could be traveling for free everywhere off of credit card points and miles, but instead I'm enjoying my zero balances. My feelings about debt may sound stupid to you, but that's okay with me. I'm so happy to be out. My life hasn't been the same since. Having control of my finances has been outstanding and it wouldn't be this way if I was still in debt. Trust me. Being in debt sucks more than being debt free. Just ask those who were there and got out.

#The Joys of Being Debt Free #I'm Debt Free and Loving It!#Why Being Debt Free Rocks

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22 Comments

Mai says:
August 17, 2012 at 9:31 AM
Kraig, you continue to inspire me. When you put your mind to it and exercise discipline, there's really nothing, NOTHING you cannot do. Not only does this pertain to debt but to almost every aspect of life. For example, three years ago, I would have never thought I would ever be as fit as I am today and am now over 30 lbs. lighter. When you make a strong commitment to a goal and never lose sight of it, anything is possible. Unfortunately, I am still very much in debt with students loans, a personal loan and one credit card, which only amounts to about $19,000 but it would be so great to be debt free. I was over $35,000 in debt several years ago so I know I can do it! I just haven't been able to with my current family situation, but your post is motivating me to start again. Thank you for the inspiration!
Anita says:
August 17, 2012 at 1:54 PM
I commend you for setting your mind and achieving this goal you set for yourself. Congratulations! I have done this a couple of times in my life, but as I say "sometimes life gets in the way"! I am now going to set my mind to doing this a third time, wish me luck. I know how it feels to be debt free, it is the best feeling in the world. Keep up the good work!
Mrs PoP @ planting our pennies says:
August 17, 2012 at 2:59 PM
You're telling your warm fuzzies from showing $0 next to your credit cards would feel better than the $1000 in rewards points we've earned in the last 9 months? We use rewards cards responsibly - we get a float on the money until the due date (that's interest being earned by us in that time, not the bank), we never pay interest, we get additional insurance coverage on a lot of our purchases, and will have an extra $1K+ in our pocket at the end of the year. Personally, we like it when banks pay us for our business.
- Kraig @ Young Cheap Living says:
  August 17, 2012 at 3:11 PM
  Hey, if that's what makes you happy, great! I personally like seeing zero balances. That makes me happy!
  - Kara says:
    February 22, 2015 at 8:52 AM
    You're leaving out the HUGE risk factor of messing with credit cards to earn a measly 1k per year. No wealthy person ever became rich that way. I'd rather have the peace of mind a hundred times more. Life & Murphy's law can and WILL happen. Not worth the risk.
Jay says:
August 17, 2012 at 3:15 PM
Awesome, having to credit card debt are car debt is great. To be honest it sounds like commitment issues, seems like you dont like to be tied down to anything for too long.
- Kraig @ Young Cheap Living says:
  August 17, 2012 at 3:17 PM
  You are right. I don't like to be tied down to things I've thrown money away on in the past!
  - Person says:
    January 14, 2016 at 8:46 PM
    Aww the sheer bliss of Zero credit card bills post Christmas as have none!! Haha
AverageJoe says:
August 17, 2012 at 3:23 PM
There was a study done recently (PK at DQYDJ turned me on to it) that shows that the more money you make and keep, the less you like to spend money. Isn't that funny? When people have none they want to spend, but then when you get money, it starts sticking! Cool points.
krantcents says:
August 17, 2012 at 6:54 PM
Although for most of my life I have had very little debt, I have less total debt now! My mortgage will be paid off in less than 5 years and my car will be paid off in less than 4 years. No debt means choices!
SavvyFinancialLatina says:
August 17, 2012 at 9:27 PM
It's exactly how I feel about getting out of debt :) $5K more to go, then no more monthly payments to a bank. It can all go to the savings account. I don't understand why people say their scared of going back into debt. Honestly, I haven't been in debt. The $5K debt was from my husband's car loan before marriage.
Carrie Smith says:
August 17, 2012 at 10:35 PM
You're absolutely right Kraig! Being out of debt is a great feeling and there are lots of positives. I can't wait till I'm in your position - with good cash reserves built up - so I'll be a little more confident in my financial situation. The reason I'm feeling the downside of being debt free, is because I'm in the middle stages where I don't have much saved up but I'm not looking to accumulate more debt. Thanks for including my post, and I'm glad I could inspire you to share your thoughts.
Barbara Friedberg says:
August 19, 2012 at 5:10 PM
The mental stress of debt can be devastating. Sometimes it takes a wake up call to get one to the point of saying, ENOUGH! I'm so happy to hear your progress!! Life's much sweeter without debt!
- Charles says:
  December 29, 2015 at 12:20 PM
  I always love that song the seven dwarfs sang.."I owe I Owe so off to work I Go". Ha !.But really .To go to bed at night and have no money/Debt (Or Health) Worries is fantastic .I have a One Bed Condo With 2 Parking spaces .I bought 10 years ago for 150 thou Cash ,(Now worth 300 thou) is fantastic..Just outside Toronto Canada (On the Lake)..I count my blessings for the Freedom of not being dependent on anything JOB security especially.My overheads are so low ..True happiness comes with feeling healthy and secure.
Ornella @ Moneylicious says:
August 20, 2012 at 1:29 PM
The Most important thing is to have control over your finances. It's so much easier when you have a clear mind to make financial decisions.
maria@moneyprinciple says:
August 21, 2012 at 10:31 AM
Well done and keep it up. Yeah, it is a great feeling being debt free!
jason says:
April 15, 2014 at 12:52 PM
I know this is an old entry, but you may want to think twice about using your debit card everywhere. I'm debt-free now for several years, and use my credit card to prevent theft. I pay my credit card off several times a month. If someone steals your information for your credit card, you are protected as long as you report it within 30 days. If someone steals your debit card info when you swipe it, you lose that money directly out of your account. Look what happened at Target. Would you rather had your debit card information stolen or your credit card info? Peace of mind.
Kathygirl says:
September 8, 2015 at 10:42 PM
I'm so happy you made that journey and I'm inspired to do the same, starting with one credit card and a car. And I'm going to keep chipping away at it. Personally, my reason is I would love to change jobs and this would give me more flexibility - I wouldn't have to "shop" for the right earning level in order to pay my debt load. I could even take a pay cut or a job with similar pay. It opens up choices.
Rose Green says:
January 13, 2016 at 12:09 AM
Well done!You have what I think of as financial serenity.What you have accomplished is inspiring and the fact that you still maintain a debt free lifestyle shows just what a smart lad you are.You know yourself well and you are doing what works for you.You definitely think outside the box and had the courage to do what it takes to take control back over your life.I respect that.You don't use credit cards,loans etc regardless of low interest,points,or perks to make "wise"use of these "financial tools"for purchases or varied types of investments.You are actually NOT contributing to the debt based economy and can sleep peacefully.I'm so glad that you are not chomping at the bit being tempted to annihilate your financial freedom again.Personally,this Canadian is retired and happily debt free.I have no desire to be in debt for any reason at all.I see it as enslavement.Each to their own.Best wishes,R.Green
Person says:
January 14, 2016 at 8:49 PM
Happy with my pre paid opt plus card from Cash Money thanks?
Person says:
January 14, 2016 at 8:52 PM
This works: if I want to shop online, I make myself walk to the cash money store to load the pre paid with Cash and then, walk home. No instant gratification at Amazon from the comforts of home without work first and physically Seeing the cash go on the card! Try this!
- Person says:
  January 14, 2016 at 8:54 PM
  No credit card bills! No zero balance statements with an " accidental" credit to tempt use card again.. Nope.