Don't let debt rule your life"Debt has the ability to rob us of our future buying power and dreams. After all, you are borrowing from your future."
Debt. It’s a four-letter word that gets a lot of attention these days. Yet where would we be without it? How many of us could buy houses or fund new business startups without it? How would the federal government function?
The silent “b” in the word is a reminder of just what an illegitimate child debt often is.
Debt has the ability to rob us of our future buying power and dreams. After all, you are borrowing from your future. The one that eats at me the most, since we don’t carry credit card balances, is the huge principal amount remaining on our mortgage. It just sits there like a mighty giant, and we seem to succeed at only picking away at its toe jam as we chip at it each month.
Since our current efforts to slay the giant aren’t fast enough for me, we are currently refinancing it into a 15-year loan from a 30. It’s downright shocking to see the tens of thousands of dollars that can be saved when taking this step. But it’s encouraging to see just how much more we’ll pay off in principal each month compared to our current situation, even though we’ve been at it for the better part of a decade.
I’m the kind of guy that lies awake at night thinking about paying the mortgage. Having this kind of debt certainly does limit the freedom one may have to explore different career options, launch a new business, travel, be free within your finances to be generous and a blessing to others, to simply take that much-needed sabbatical, or to focus on the needs of others before yourself.
That last one is particularly grating to me, much to my chagrin, as another example of how my life is so unlike that of the author of my faith. I definitely don’t put the needs of others before my own. Clearly a mortgage does not need to be paid off for that, but the monster can definitely get in the way.
A balance is certainly to be desired, however. In the case of my family, if we stick to this new 15-year loan term, our kids will be 21 years old by the time the beast is paid off and the last dagger is driven into its heart. Should we live on a shoestring budget until well after the kids are out of the house, only because I obsess about paying it off?
There’s just something visceral that takes over when thinking about the necessity of making a monthly payment to a bank so you can continue living in your own house.
It seems that we should be able to go after the balance in a big way, while teaching our kids that the best things in life are free.
Numerous toys, video games and the accumulation of stuff are not only unnecessary, but can be downright harmful. Yet it can be worth it to spend on family vacations and the like, purchases that can result in lasting memories.
Perhaps by the time the kids are 21 we will have this all down pat. Isn’t that the way life is? You’ve got to learn to enjoy the journey while feeling your way along. Surely we’ll make mistakes, but it’s crucial to teach the value of frugality to our children while also exhibiting generosity and a concern for others, especially for the poor.
This makes me think of an experience when I was 19. I took a year off from college and lived and worked up on the North Shore. One day I walked into my boss’ office and calmly informed him that I was going to walk to Colorado from Grand Marais in a few weeks (it was October). I was going to stay with a friend, and then hike to the Pacific in the spring.
Well, I was talked down from the ledge and ended up taking a scaled-back month-long vacation where I traveled by train to various locations in the West.
Being single and having no responsibilities made it much easier to do that sort of thing, but surely families can structure their financial house in such a way that they can be unshackled from the banker, and learn to appreciate the journey of life.
Monthly Budgeteer columnist Eddy Gilmore is a freelance writer, father of twins and husband of one. He can be reached via e-mail at email@example.com.