THINGS THAT FINALLY MAKE SENSE.

Living debt free is a priority that has become a realization as the years have passed. Maybe more than anything else, keeping free of debt is providing freedom and peace. It was a difficult road getting there.

After graduating college and getting married, there was a desire to get “things”. I see this in young singles and married people even today. The first thing is usually the new car which is followed by things needed for the new car. Then comes the new home. That brings with it all the things you now have to have. New furniture, appliances, tvs, stereo systems, etc. This of course is often financed with credit cards and loans. It isn’t long before you wake-up a few years down the road and find that your debt has enslaved you. Worse yet, you experience a loss of a job or a divorce and the debt which allowed you to purchase these things that brought you such apparent immediate happiness is now bringing you lots of emotional stress and misery.

It isn’t like I wasn’t warned and advised to stay out of debt. The first poor financial decision made in my 20s was the trading in of a vehicle that was paid off for a new Jeep CJ5. The payment was $265 per month, which at the time was a big payment (1981). That amount alone, invested in a few stocks over the course of the loan, would have produced enough return to fund a retirement. All that was needed was an understanding of the principle of compounding interest and an ability to deny instant gratification.

In the last year, I read Dave Ramsey’s book, The Total Money Makeover: A Proven Plan for Financial Fitness. I highly recommend it. It gives a great blueprint for getting yourself financially fit.

Here are four decisions I have made to help create a financially secure future and a peaceful way of life while getting there. I am encouraging my kids to do the same. You would be doing yourself a favor as well to at least consider these options for yourself.

  1. Paying cash. Period.
  2. Focusing on paying off remaining debt. Keeping this a priority is a key to maintaining peace of mind. I am finding increased freedom directly proportionate to decreasing debt levels.
  3. Creating a fund for emergencies. Money Magazine reported that 78% of us will have a major negative event in any given ten year period. Most of us have some kind of minor emergency yearly! The initial amount is $1000.
  4. Begin investing again, wisely. (I will be reporting what I am doing here, with results. Posts to come!)

I would have never thought that living a debt free lifestyle would be one of the beliefs found with the advent of turning 50. If I could just find a way to help my 20 year olds feel the same way!