Happy New Year everyone! I am happy to tell you that this year Color Me Frugal is participating in the Debt is Not Forever Movement. What is that, you ask? Well, this year dozens of bloggers are participating in a group effort to help people the world over get out of debt! We aim to do this by helping people get in touch with the reasons why they want to be debt free. The reasons are likely different for each and every one of us. Some may want to pay off their student loans so they can start saving for a house. Some may want to get out of credit card debt so they can finally start saving for retirement. Others may yearn for the day they can throw that last dollar at their last debt so that they can finally know that they are truly DEBT FREE.
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Debt most certainly does not have to be forever, although I completely understand that when you embark on your journey to pay off your debt it may feel like that!
I think the most frustrating thing about debt (for me anyway!) is that many of us incur debt when we are young. We buy cars on credit, we take out student loans to go to college, and we take out mortgages to buy homes. I did all of those things within a few years of graduating from high school (well, ok, I guess the mortgage did not come along until I was maybe 27-ish). Suffice it to say, I got myself in a whole mess of debt at a young age. In other words, before I really knew enough to be extremely cautious about debt.
(Unfortunately I went to college before the days when there were cool websites like Scholarship Owl that help you find and apply for lots of scholarships at once- far less painful than it used to be! I still applied for scholarships in college- it just took a lot longer. 🙂 )
I think the best advice for those who do NOT have much debt at this point is to think very very carefully before you take on debt. As in, run through the numbers on what your payments will look like, how long you will have to make payments, what type of salary you may be able to bring in (especially in the case of student loans), etc.
However, this article is not really directed at those without debt. I am writing this article for you, my fellow debt-strugglers! Mr. CMF and I have been working to pay off our debt for the better part of a decade now. Granted, we didn’t wake up and smell the coffee (and start making more than minimum payments!) until about two years ago. We’re fortunate that it’s not credit card debt- it’s mostly a mortgage and student loan debt at this point- but debt is debt no matter the kind.
I’m proud of the progress we made in 2014- we paid off about 16% of our total debt. We think it should take us about 5 more years until we are free of ALL of our debt. We feel confident that debt is NOT forever.
I think it’s important to repeat that. Debt is NOT forever. I think that too often in today’s world debt seems normal. Everyone you know has a mortgage, a car loan, a student loan, and credit card debt (if not all four, certainly some combination of those, right?) Before we axed cable I used to watch the Suze Orman show on CNBC, and some of her guests had truly frightening financial situations. How would you like to be a 70 year-old with a $200k mortgage? Or a 60 year-old with $50k in credit card debt?
What is normal about having that much debt at that age? Nothing. I know there are folks that would argue that a mortgage is good debt, but personally I do not think any debt is good debt, especially in the so-called “golden years.”
Debt is Not Forever
I think that ditching the “Debt is Normal” mindset is a critical piece of achieving debt freedom. For us, it took stepping outside of that mindset to realize that we were feeling WAY too comfortable with WAY too much debt. Once we started “re-framing” our thoughts about debt and began to see it for what it was (in our case, a chain that was binding us to our jobs and keeping us living in a city that we did not want to be in), our mindset changed.
When we started to see that debt was holding us back from the things that we really wanted in life, we knew we needed to make a change. We put debt payoff at the top of our priority list and let that guide our financial decisions going forward.
Our Big “Why”: We Want to Move Back to Our Favorite Mountains!
It’s hard some days. Many of our friends are not as passionate about getting out of debt as we are. So sometimes it’s awkward in certain social situations when it becomes apparent that we live our lives differently than most. But we try not to let it bother us too much. We have our reasons for living the way we do, and some of our friends are aware of that and others are not.
We know that our debt will not be forever. One of Dave Ramsey’s quotes often comes to my mind when I think about our debt payoff journey.
“If you WILL live like no one else now, you CAN live like no one else later.”
This quote sums it up for me. I think paying off debt is about making choices now that will ALLOW you to have more choices later. For example, I think it will be beyond awesome when Mr. CMF and I one day get to reap the fruits of our labor and retire early. I certainly think that will be a lot better than the alternative, which would be to have no choice but to continue working much longer than we would like into our golden years!
Debt is NOT forever. There is a great life out there beyond debt, just waiting for you (and us!) It will take a lot of work, but I know it will be worth it.
Will 2015 be the year that YOU take a stand against debt? If you are already debt free, tell us about your journey to debt freedom! What’s YOUR big “why”?
Suggested Reading: Dave Ramsey’s The Total Money Makeover
CMF’s favorite FREE money management tools!
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photo credit: zimpenfish via photopin cc 1/4/15, with changes
Debt is not forever, indeed. I’m on track to be debt free by the end of April this year. I am really excited about that since is less than 4 months away! Well, I’ll probably go into debt again when I buy a house, but I’ll enjoy being debt free for a while.
The reason why I want to be debt free is because I’m tired of giving my money to other people (credit card companies, student loans, etc.)
YAY! That’s awesome Aldo!! And I totally hear you on being tired of giving all your money to your creditors. That’s another reason why we are pretty sick of our debt at this point.
Love the slogan Debt Is Not Forever! I recently celebrated two years of debt freedom and the reason why I still remain debt free is that life without debt leads to greater possibilities. What I am able to do now and how I live my life wasn’t possible with the amount of debt I had.
That’s so excellent! Two years!! Now that is something to celebrate. You must feel so much more free- we can’t wait to have the same freedom!
Good slogan! I totally know what you mean about how friends react to you being kind of different. I get the same strange looks but more along the lines of I don’t bring in as much income so my budget is very tight, meaning even simple $10-$13 social outings need to be weighed carefully to see if I can do them. But recognizing what is most important to you, not them is admirable. Good luck!
I keep reminding myself that we will feel so much more free to do fun things with our money when our debt is gone. We are still a few years away from that, but we can still dream…
Great post Dee! Debt is NOT forever! I am so happy my husband and I finally figured this out 3 years ago. We’ve paid off about $113,000 since then! We have $57,000 left on our mortgage. We are pushing hard to be debt FREE by December 2016! Can’t wait!!! 🙂
That’s AWESOME, Nichole! Wow, I’m so impressed with how much debt you’ve paid off!! And December 2016 is not very far away- less than two years!! Thank you for sharing- it’s an inspiration to all of us!!
Really like the catchy slogan. It’s a great way to remember that debt does not have to bind you but that there is always a way out!
Very true! The power is in our hands, we just have to want it badly enough.
The only real debt I’ve ever had is my mortgage and I think I view that slightly different than you. I can at least write off the interest on my taxes for that which in essence just makes my mortgage seem like it’s at a slightly better percentage than it already is.
That aside, I don’t see my current home as my forever home so paying it off doesn’t seem like the best plan to me. I keep saying that I want to move somewhere else where I won’t have roommates but the fact that I know doing that will only make my portion larger makes me hesitate. I’m probably only paying half of what most people pay in San Francisco now, but I’ve had almost 8 years, a refinance, and a number of rent increases when roommates move out to finally get to where I am now.
Also, part of my plan for early financial independence will revolve around being able to pay a 200k mortgage payment with passive income. Sure I could work to pay off my mortgage early but if I have the passive income to keep paying a mortgage then eventually I will have a huge safety net when that mortgage is paid off.
I hear you Zee. It makes no sense to go gangbusters on your mortgage if you do not intend to keep the house forever. I love your plan to have passive income pay your mortgage, and having enough passive income to make monthly payments on a $200k house would be incredible! What passive income sources are you working on?
The only passive income I really am working on is investing. I save somewhere around 60% of my salary so I just invest it with various strategies. I was going for growth companies for a while, but now I am working on building up some divided stocks. I like the idea of a dividend portfolio, but when I see certain growth stocks I think, “well, I could invest it here for a while, then later I can sell it and switch it over to dividend stocks for less volatility.”
I’m actually coming around to the idea that perhaps home ownership may not be for me in the end. If I can just get enough investments or passive income to completely cover renting then I could be location independent. My own personal rule for buying a house is that if you don’t intend to stay for 7 years then you shouldn’t be looking (unless it’s for renting).
If I could pay rent with passive income in the US, then I would be free to move to Thailand for 6 months and then perhaps another 6 months in Argentina. On top of just living in awesome places for a while I would probably be saving more money than I would living in the US.
I guess the idea of becoming a forever renter would be one way to get rid of debt forever.
I think that’s a really good rule on home ownership! Too bad we did not adhere to that when we bought a home in 2009- we ended up really regretting it when we moved three years later. I think your idea of building enough passive income streams to cover living expenses abroad sounds awesome. Especially if you want to spend a significant portion of your time somewhere other than the US, you’re right it doesn’t make any sense to buy.
Totally agree. It’s all about the short term sacrifice for the long term goal. Clean up he mess now for a better life tomorrow!
I love that analogy- “clean up the mess.” It really IS a big debt mess that we have right now. Can’t wait to live a life without debt!
We are already debt-free aside from our mortgage. It feels great! Never going down that road again.
Love it!
SO true, Dee!! At least, it doesn’t have to be forever. With a true commitment, debt can be paid off!
We’re working on it just like you guys are! Some days debt freedom seems so far away, but I know we will get there!!
Spot on Dee, debt doesn’t have to be forever and I loved your advice for people who don’t have a lot of debt now but might be thinking about taking some debt on. I agree – weigh up the options and consider whether you have to take on debt in the first place. Well done on your debt repayment so far and I think you’ll smash your goal of 5 years!
Thanks Hayley!
Total debt freedom is a great place to be! For those embarking on the journey I can only say it’s 100% worth it, even if it will take you a decade. Your perspective on life and the future will certainly change that day you owe no one.
You guys are an inspiration to me, Brian! Can’t wait for the day we can declare ourselves debt-free!!
Sometimes it’s hard to remember that when all of my money is going to debt repayment.
I know, it can be really sickening to send such enormous chunks of your paycheck toward debt, can’t it? We will get there, and so will you guys!
I also noticed that many people in my country also consider debt to be normal. Hey, it’s not. It’s OK to get it for some of your goals, but pay it off and build your life as you’d like to. It’s clearly not an easy task, but it can be done.
Completely agree!
Fantastic post!!! I am around £10k in credit card and payday loan debt. I am finally smelling the coffee and working to be debt free by the end of this year!!
Once I have done that it is all about saving for a deposit and then buying a house and trying to pay it all off by the time I am 40. I have a 20 year plan to buy 2 houses and pay them off fully and be completely debt free by 50! That’s my retirement plan ….it’s all about the goals.
Love your story and loads of luck. I am at the beginning if my journey but have the drive now and you are right- it’s all about changing your mindset.
Good for you! Sounds like you have an excellent plan- I wish you luck on your debt payoff journey!
It took last year to get on a budget system and make sure all was paid on time. It was a huge change for us, still is. Now I am starting to kill debt but by all calculations we are at the start of a five year war 🙁 that does feel like forever. The beginning is exciting and depressing. In a year, after seeing progress,I know I will feel better but it is hard right now. Glad your here to help inspire us!
I know, I think whenever your proposed debt payoff plan will be years it can seriously feel like forever. I just keep reminding myself that a journey of a thousand miles begins with a single step 🙂