I dream of the day when my debt is 100% gone!
I got into debt pretty early in my life and borrowed money to cover the cost of a Penn State degree.
It turned out to be a great investment. I landed a good telecoms job right out of college at a tech company and successfully paid off the full amount. So borrowing a small amount turned out to be a wise decision.
Debt itself is not a bad thing, it is often a good thing.
I have been fortunate enough to be able to purchase a few homes and other properties thanks to affordable debt. Luckily my credit was strong and I was eligible for the 3% loan. This is unlikely to come back anytime soon.
In 2020, I borrowed money to buy a new Toyota Tacoma truck. I borrowed about half the value of the truck and have mostly paid it off.
According to Kelly Blue Book, the truck is worth $3,000 to $5,000 more than I paid because the used car market has been disrupted by COVID-19 and the many bad decisions that government agencies have made in response to it.
Sure, I’ve had some good experiences in my life with debt, but I’ve had far more unpleasant experiences than that.
Early in my career as a freelance writer, I had to borrow money just to meet my April 15th tax obligation.
There is nothing more painful than borrowing money on a credit card at a high interest rate to pay self-employed income tax, which forfeits income at an even higher rate.
I share my experience with debt over the years because a recent study commissioned by Boyondo Finance and conducted by OnePole for National Financial Freedom Day found that the average American is about $54,000 in debt.
“People’s biggest debt hurdles include credit card debt (57%), mortgages (30%), auto loans (30%) and medical debt (28%),” the study reports.
Inflation, which surged to about 8.5% last year and is now at 4%, has become one of the key drivers of debt creation. People have borrowed money just to make ends meet.
Health care debt is also a major problem, and our health system is a financial burden for millions of people.
I will never forget meeting a home improvement worker one Sunday. We got to talking and he said his teenage daughter got sick so he had to get another job.
He explained that the last time the government “reformed” the health care system, his company’s health insurance deductible jumped from $3,000 a year to $9,000 for family plans.
My daughter’s illness has caused me to hit the deductible limit for the second year in a row, costing me $18,000.
Beyond Finance’s survey doesn’t mention the $1.5 trillion in student loan debt that pains millions of people who make bad financial decisions, but it does even more pain for those who don’t understand that the president can’t wave a magic wand and end the debt.
Debt stinks.
When you have debt, you end up doing a job you don’t want to do for the money you need to pay it off.
Debt can bring you to your knees until it is finally paid off and you are truly free to live frugally and happily. Sadly, too few Americans live up to that dream.
Parcel, creator of infotainment sites servertail.comis a humor columnist for the Pittsburgh Tribune, featuring pet advice learned from beloved Labrador dog Sever. Send an email to Tom@TomPurcell.com.
