Wednesday, January 09, 2008

Which Life Do You Want?

I was listening to a podcast last night by No Credit Needed. I highly recommend it. He was describing how his life is different now that he doesn’t have any debt to deal with. Even though I’m already on board with a debt-free lifestyle, it reassured me that I’m on the right track. It got me thinking about the kind of life our family will be living in just a few years.

A family living a debt free life:

Will not be devastated if one of the parents loses their job. They have enough cash to survive because they were able to save their money instead of sending it to debt. They don’t have any bills to pay other than utilities, food, and other minimal bills. Losing a job when you are debt free is NOT a crisis. What, think you can’t lose your job? Think again. Yes, even you are replaceable.

Will build wealth at amazing speed. Let’s say you get a paycheck of $2000. You spend $1000 on your monthly expenses such as food and utilities. That leaves you with $1000. A family living with debt would have to send that money to their mortgage, student loan debt and car payments. There is very little, if anything, left to save. The debt-free family deposits that $1000 into their ROTH or at the very least, a savings account. Which family do you want to be?

Can have a lot of fun! Most importantly, the family is not stressed out about financial problems. They can have fun with their money instead of working to make it stretch. It’s not a financial burden to take a family vacation because they have enough cash to pay for the trip. Vacations are much more fun if you aren’t worried about how much it’s costing you.

Aren’t devastated by emergencies. If the oven breaks, a family living with debt will probably wonder how they’ll afford a new one. They’ll end up charging a new oven on a credit card, therefore making it cost much more than if they paid cash. A debt-free family can simply buy another one and move on with their lives.

Can give like crazy. I want to help people in a productive way. I want to pay for them to go to Dave’s live events. I want to pay for couples to go through Financial Peace University (I haven’t even done this myself!). I want to help feed kids who are hungry. I want to make sure kids living in poverty are well fed and clothed. And as Green told me this holiday season, “Every kid should get at least one present for Christmas.” Because of discussions we’ve had at our house, my boys are well aware of how fortunate they are.

816. They should know that wealth is a tool to further God’s plans.