Kim and I have been debt free except our house for the past two years. In that two years, she has been able to go from full-time to part-time to PRN (even less obligation to work than part-time). This freedom has come as a direct result of us learning how to budget and eliminating all debt except our home mortgage.
Essentially we are making less money but we are able to do more with it because we don’t have debt eating our income. Today, my income covers all our needs and we stash Kim’s paychecks towards our wants. The more of this freedom I’ve experienced the more I want. So much so that I want to pay off the mortgage. Aggressively. Thinking back I realize that debt has affected my decisions and actions. I can see it in conversations with others close to me as well. I’ve always been blind to it until now.
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Work, work, work, work, work… just to pay the bills.
I recently read Rich Dad, Poor Dad by Robert Kiyosaki. One of the parts that really hit me was the idea that the average person is driven to work by two emotions: fear and desire. Kim will tell you better than anyone else that I am not into material things. I rarely want birthday gifts or Christmas presents. I even hate clothes shopping for myself. Perhaps I should care more about that stuff but if I’m being honest with myself I don’t. Desire is not an issue for me.
Fear is the emotion that motivates me these days. This fear makes me get up and work for a paycheck so I can continue to pay my mortgage. It is the same fear that if I lose this job Kim may have to go back to work full-time to make ends meet. I fear that my son will lose the amount of time that he currently has with his mother because I lost my job and we have to pay the mortgage. This fear stops me from speaking up about certain things in the job because they may find someone else to fill the position and kick me to the curb. This familiar fear is the same thing that kept me in a job two years too long because it was a “great” company and the job was “secure”.
There is a part of me that feels like I’m selling my soul to make the mortgage payment. There is another part of me that wants to be free from the daily grind of humbling myself for a paycheck. That second part of me is screaming for more because he’s gotten a taste of that freedom. Before getting to this point in our financial journey I didn’t even realize how debt was affecting my thoughts and decisions. Today it is absolutely clear that debt has had and still does have an effect on my decisions and actions.
Rock a bye baby because I have to go to work.
I wonder sometimes what the results of a poll of women would be if they had the choice of being a stay at home mom or working part-time as opposed to working full-time. What about dads too? What if both parents had the ability to work less in order to spend more time with family and/or kids?
The average American has $16K in credit card debt, $176K in mortgage debt, $28K in auto loans, and $49K in student loans. Unless one parent has the ability to earn a more than ordinary income this debt scenario doesn’t allow for a household that can survive off one income. Therefore, both parents have to go to work to stay above water.
And let’s be honest, daycare is EXPENSIVE. A huge chunk of your income is going to someone else for them to have the pleasure of caring and nurturing your child at the beginning of their life. Kids are resilient and I’m not saying that if you send your kids to daycare they’re going to be messed up for life. There are definitely perks to daycare. However, if most people had the choice they would probably choose to spend more time raising their kids instead of working. They may do a little daycare to give their child the opportunity to socialize with other kids though. The key here is that it would be a choice and not a necessity.
I can’t tell you how many times I’ve listened to Dave Ramsey’s or Suze Orman’s show and a young mother wants to come home with the kids but the family has so much debt that it just isn’t feasible. That mom HAS to go to work to eliminate the debt in order to eventually be at home with their child. This is the problem with debt. It limits your options and thus your decisions.
I can’t say with 100% certainty that you would see these words today if Kim and I were heavily in debt. Having our own blog would be the last thing on our minds. This makes me wonder how many people are scared to start their own business or pursue a dream because they don’t know how they would make their monthly payments. When having just enough money to cover all your bills is your reality there is little emotional energy left over to ponder other opportunities much less actually work on them.
In finance, there is a term called opportunity cost. This is basically an opportunity that was missed because your time and energy were spent on something else. We’ll never know what idea, inventions, businesses, and even blogs weren’t created because a person’s talents and energy were spent just trying to cover the bills.