So as I mentioned in my guest post over at Debt Roundup a couple weeks ago, the hubby and I have recently decided to crank it up to turbo mode on our student loan repayment. For years we have been pretty complacent about paying off our student loans, since after we graduated school we consolidated and refinanced them to interest rates of 2.5% and 3.5%. Given these great interest rates, for years we have been telling ourselves that we are better off investing any spare cash we have, since we could likely make better returns by putting more in our retirement accounts, saving for a rental property, etc.
That is probably mathematically true. In a way, the decision to turn away from this mindset and turn toward a debt repayment mindset was a difficult one because of the math. But in a way it was incredibly easy because we have been calculating our net worth since 2010 and guess what? Even though our net worth has been increasing, our debt has really not been decreasing by that much. That is quite disheartening to see. Looking over our financial statement, it is clear that if we do not take action now we will be paying these stupid loans off for the better part of the next two decades.
TWO DECADES! That’s way too long to have student loans hanging over your head, in my opinion. That does not sit well with us because for as long as we are in debt, I think we will feel like we are in debt. We will feel chained to our jobs. We will feel like we can’t do certain things because of our debt. Most importantly, we will never reach our dream of financial independence while we are in debt.
We have so many dreams that we want to see happen. We want to have children. We want to move back to our favorite place. We want to become financially independent so we can live the way we want to live and have more freedom to do the things we want to do. Allowing this debt to hang around is not going to do anything positive for our lives and will certainly not help us achieve these dreams any faster. So even though mathematically-minded folks may argue that we could come out better in the long run by continuing to invest any spare cash, at this point we are going to say screw the math and work on getting out of debt. The more we’ve been thinking about it, talking about it, and blogging about it, the more we want it. Stay tuned for updates on how things are going as we embark on the debt freedom journey!
Has anyone else out there been in a situation where mathematically it may have “made more sense” to stay in debt? What did you do about it?
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