Photo by: iDanSimpson
I knew that our debts were really punishing us and dragging down our family, but I really didn’t consider the scope of the impact this debt has. Of my monthly salary, over 40% of my take-home pay is used to pay our debts. Over the course of the month, my fixed monthly debts leech away around $1,800 and my credit card adds anywhere between $500 to $1,500 depending on what purchases we made. That’s at least $2,000 each month that could be used to fund our retirement, help my children through school, or even let us take a less-than-frugal vacation once in a while.
At the beginning of each month, Quicken reports to me that the following balances are due to be paid soon:
- Mortgage – $1,000
- Home Equity – $200
- Student Loans – $300
- Car – $300
- Credit Card – $Ouch
Because of choices I made in my past (not that I’m begrudging any of them), I am limited in what I am able to do today. Because of this debt, I am less free than I would be without it. That is why debt elimination is so important – to achieve that freedom that can only come through unshackling yourself from the chains of debt.
I anticipate that we will pay off the car in November and free ourselves from that debt burden, but it won’t be long before we’re forced to replace my truck with a newer, baby-safe vehicle. We certainly won’t have enough savings by then to buy a car outright, so that will mean adding more debt back to our household. Again, debt comes back as a consequence of choices we make.
I know that if I ever hope to achieve financial freedom and truly feel rich, I’m going to have to dig myself out from under this load of debt I’ve piled up. Total debt elimination may not be something on our near future, but knowing that it’s on the horizon at least gives me hope to attack it with everything I can.
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I probably won’t be out of “home debt” (the mortgage) any time soon, but I hope to have both credit card and car paid off next year. I cannot possibly tell you how excited I am for that. My debt was acquired for reasons that made sense at the time, but I will be very, very glad when it is gone.
Dawn, you’re right on the button about “made sense at the time”. I haven’t entered into any “stupid” debt, but I’m increasingly finding all debt annoying. I’m so throwing a party for each debt I pay off!
I find myself thinking the exact same thing every time I sit down to schedule a debt payment. This money could be so much better spent (or saved) in other ways! It does help provide some additional motivation to move towards debt freedom.
This is so true. Every month I review what I have paid against credit card debt. As I’m paying it agressively, it’s a lot. It’s hard not to think about what else I could be using that money for! I can’t wait to have everything cleared away.