Last month, I forgot to pay the electric bill. As a result of paying late, we got a Nastygram from Duke Energy Progress, and I had to pay $.87 in interest. I also pulled my credit report because I was worried that the negative information made it to my report (it had not, yet).
Lesson learned (I hope).
However, I was grateful for the opportunity to pay less than $1 in interest. If I would have paid my water bill late, I would have owed a $5 late fee. And, I'm really grateful that Duke gave me the chance to pay them back before interrupting our service.
Despite my gratitude, I am more grateful to be in a position where I usually don't pay interest. More so, I'm grateful that I've learned that rejecting debt simplifies life.
Rejecting Debt Is a Life Simplifying Choice
I understand that getting into debt is a slippery slope, and most people who struggle with debt weren't super-aware of the consequences of debt when they started their financial journey. I also understand that it is really hard to dig out of a big debt hole. But my story isn't about debt holes, or debt freedom.
Instead, my story is one of life simplification in the midst of a chaotic life.
Rejecting debt is the single best financial choice that my husband and I implement on a daily basis. Rejecting debt simplifies our life, and it allows us to live presently and mindfully. It means we don't live under the oppression of poor financial decisions.
Rejecting debt doesn't mean we don't make bad financial decisions. We do. Rejecting debt simply means that our past decisions can't haunt us. We can't get trapped in houses or cars that cost too much. We cannot get trapped by past overconsumption. At our very worst, we can only be trapped by present overconsumption.
When we search for houses and cars, we know how much we can afford. In the future, when we pay for our kids education, we will know how much we can afford. It won't be dictated by the amount a bank will lend us. Instead it will be based on the amount of money in our bank.
Why we choose to simplify life.
Rob and I haven't chosen a simple life. I think our life is complex. We've got school, work, kids, home renovations, friends, church and family, not to mention keeping a toddler alive. We are entering a stage of life where time could pass us by, and we would be so busy that we wouldn't notice it.
We share many goals, and every single one of our goals is important to us, but we run the risk of "achieving" a lot and impacting a little. Additionally, we see the risk of pursuing a lot and enjoying a little. Money (or the lack thereof), slows us down. Debt would allow us to run head on into all our goals, and achieve them faster.
However, what would happen to us, if achieving our goals left us feeling hollow and empty? Suddenly, we would be tired of our life and forced to deal with the debt that wasn't worth it.
Having just a few systems in place that help us to slow down gives us the opportunity to express gratitude to God. It gives us the opportunity to identify and provide for other people's needs. It helps us to deal with pain and anticipate eternity.
Rejecting debt is one system that allows us to slow down.
What about good debt?
Rejecting debt for us means rejecting all debt, including mortgage debt, low interest car loans, 401k loans or student loans for our kids. The only debt product we carry is a single credit card for renting cars or hotels.
We are far enough along in our wealth building journey where this is a viable choice. If we move somewhere that has expensive houses, then we'll rent. If our car breaks down, we'll fix it, or buy a new one that we can pay for in cash. If shit hits the fan and the entire economy collapses, we'll do whatever everyone else is doing to survive (it probably won't involve financial insititutions).
I can't consider every financial contingency, but Rob and I would do without a lot before we went into debt. The life simplification is so important to us, that we prefer to reject debt on every level. If you're fighting your way out of debt, let me encourage you that the other side is worth it. If you're considering plunging into debt, be sure you're ready for the additional element of complexity in your life. You may not find the complexity worth the interest, or maybe you'll come to a different conclusion than Rob and I have which is just fine.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.