Living Debt Free

After last years tax return, which was admittedly more than I should have let it be, even after spending half a year in a tax free combat zone, we paid off all of our remaining debt. We all know the importance of getting out of debt and the impact that it can have on all of our lives. I’ve read quite a few financial books lately who all stress the weight of compound interest, the dangers of making minimum payments on credit cards, and the staggering facts of how much debt the average American household is really carrying. What they don’t talk about is how great it actually feels to be completely debt free.

flickr: lemon jenny

Imagine that static in the back of your mind that you carry throughout your day, the stress of paying bills, and making ends meet being replaced by the clarity of possibility. Where I used think about how long it would take to get free, I now think about how compound interest will work for me, and how I can better save and creatively invest my money. The trick is getting out there and informing yourself, absorb as much financial knowledge as possible. While public schools still debate the need for standardized testing to grade our children’s skills in math, science, and reading, the average graduate is unable balance a checkbook, or fully understand the full concept of credit. The more you empower yourself with this kind of knowledge the better off you will be financially. Along with that the more you read, the more you will develop a style that works for you, and disagree with many of financial writers out there. While there are varying extremes, and different opinions on the details the fundamentals of financial happiness is relatively the same.
The best thing that I ever did for myself financially was to set up an emergency fund. Some people will say that this is the first step to independence, and will disagree with the amount needed to be saved. For us it was a thousand dollars. We were able to save it fairly quick, and from then on this has helped us absorb life’s little emergencies that have come up in the past few years. Though we have been a bit more dynamic on dipping into our savings than most would recommend, we have always recovered the minimum thousand dollar balance before moving on to the next steps. This has been a great foundation to help us eliminate our debt. It took several years, and we used a variety of methods, but now we are debt free. I drive down the road and know that I am in the minority of people who actually own their car. I was fortunate enough to have my financial hardships early in my adult life. My wife and I have gone through what could take some a lifetime to endure, in the first five years of our marriage. From living in a dilapidated farm house near south Detroit we carry our lessons with us, thankful that we are not making those same mistakes that I see people all around me making in their thirties and forties.

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