Tag Archives: smart budgeting

Buy the Finer Things in Life, or Pay Off the Debt?

This inspiring article was written by Derek Sall. His article made me want to stop spending on all the frivolous things I like to indulge myself with and start being really serious about paying off our debt. Derek is a recent Finance graduate from Grand Valley State University and posts regular articles just like this one on his website, http://www.lifeandmyfinances.com.

I found my eyes lost in hers while I gently held her soft hands, and she smiled back as if I were the only man in the world at that moment. “I introduce to you, Mr. and Mrs. Sall.” We were married, and it was time to start our fabulous life together; one filled with trips to the beach and hardly a care in the world.

We moved into our apartment and within a couple of weeks, the mail parcels from “Direct Loans” began coming in. Suddenly, we realized that we had college loans to pay; they hadn’t seemed real before this moment, but now they hit us like a sack of bricks. My wife had not found a job yet, and my income was barely covering our necessary expenses. We were in trouble – and my wife needed to find a job fast.

Well, the glorious day did arrive when we found out that she had work. Soon after we received that first paycheck, we were able to pay only the interest that had been building on our deferred loans. At that moment we sat down and decided that we needed to get rid of these pesky bills.

What are the Benefits of Living Debt Free?

  • No extra interest payments over time (which can sometime be equal to the loan amount!)
  • Receive discounts with cash purchases instead of getting suckered on the payment plan
  • Have the ability to invest for your future
  • Live worry free with no debts!

After we made the decision to tackle our debt head on, we designed our first budget and began making loan payments of $200, $1,000, and at one point, $3,200. It’s amazing what can be done when we have a common focus!

Since January 2010, my wife and I have paid over $9,000 toward those student loans. One of them is completely paid and the other should be paid in full by April of 2011! It feels great!

It is completely worth it to give up a few luxuries in order to feel the freedoms that we are currently experiencing. I encourage you to start by taking a close look at your expenses – are they all necessary? If not, cut them out and put the money toward those debts! You’ll be glad you did.

Do you have a great debt story? Leave a comment and let me know how you handled it. Did you tackle it head on, or did you mistakenly allow it to build with interest?