Over the past eight years, I’ve been digging into and writing about personal finance. During this time, I’ve repeatedly come across the idea that debt is a normal and even beneficial part of life.
I strongly disagree with this viewpoint. Yes, debt is common and widely accepted, but that doesn’t mean it should be considered standard. Let me explain.
Picture a life without debt—your house is fully paid off, your cars are yours, and those gut-wrenching monthly reminders of student loans or hefty purchases are gone.
What would you do with the extra cash available each month? Even people with modest incomes could find an extra $500 to $1,000 monthly if they were debt-free.
For many of us, debt has become so routine that it feels like just another bill to pay, like groceries, which is a flawed perspective.
Whenever I talk about wanting a debt-free life, I often hear things like “some debt is good” or “you need debt, don’t pay off everything.” Even reputable sources like CNN Money suggest that avoiding debt completely is unwise because it might deplete your emergency funds, a point which I completely disagree with.
If you don’t have debts to pay, you can better allocate your money towards savings and investments. It’s much simpler to grow your emergency fund and savings when you’re not dealing with large monthly debt payments.
The old belief that keeping a mortgage for the tax benefits is a money-saver needs a closer look. While it’s good to use tax breaks when you have a mortgage, holding off on early repayment just for the tax break doesn’t make sense. The amount you save through tax breaks is minor when compared to what you could save without those monthly mortgage payments and interest rates.
Debt often robs us of our freedom. Instead of accepting debt as normal, we should challenge this mindset.
Another myth is that you need a lot of debt to boost your credit score. This isn’t true.
So before you accept debt as a normal part of your life, think about what you could achieve without it. What dreams could you pursue? Where could your life take you?
Consider these common situations:
– “I can’t quit this job I hate because of my student loans.”
– “I wanted to travel this summer, but my budget is tied up with debts.”
– “I’d love to quit my job and focus on writing, but the bills are too much.”
– “Retiring this year isn’t possible without enough savings.”
Debt can trap us and limit our financial freedom. So before you view debt as a regular or advantageous part of your life, think about all the possibilities that could open up if you were debt-free.
Do you see debt as normal or even beneficial? Have you believed that carrying debt is necessary for good credit?