Happy Monday, Frugal Farmer friends! Today we welcome our friend Sarah, from over at The Frugal Millionaire. Sarah’s going to share with us today her top reasons for avoiding credit card debt. Welcome, Sarah!
A little backstory: When my husband and I met, we were in about $7,500 of combined credit card debt. We didn’t want to be one of the many millennial couples drowning in debt, so before getting married, we decided to tackle this debt plus my car loan and his student loan, totaling more than $40,000 combined.
Within five months, we hustled and hustled and eliminated our credit card debt. Two years later, married and with a baby, we were debt free.
Since then, we’ve always avoided credit card debt. We sometimes use our cards for monthly purchases to rack up points, but we pay them off as soon as we buy the items. I will never forget how it felt to live with thousands and thousands of dollars of debt. I had trouble sleeping, I was constantly worried and my quality of life wasn’t as high as it is now. I don’t ever want to go back to that life of being saddled down with debt, so I always keep the following five reasons for choosing to stay out of credit card debt at the forefront of my mind.
Stay Out of Debt to be a Good Example to My Kids
I have two little girls that are my world. Not only is it my job to teach them how to behave, how to take care of themselves and how to be kind, it’s also my job to teach them how to handle their finances. If my husband and I are constantly racking up debt, living above our means and always seeking the next big thing, what kind of example is that to them? Instead of teaching them that “things” buy happiness, I want to teach them that being in a good financial situation will bring them more peace and happiness than any item ever will.
Having More Money to Save and Invest
Let’s face it, if you’re in substantial debt, you’re probably not able to save or invest as much money as you’d like to. Debt eats away at your paychecks, limits your ability to go on vacation and prevents you from saving and investing. Not having debt has allowed us to save thousands of dollars, contribute heavily to our retirement accounts and invest in mutual funds. Our miscellaneous income is greater now and we’re choosing to invest in our future with the extra money.
Improving my Marriage
Money is one of the main causes of divorce. My husband and I paid off our debts together and continue to stay on the same page regarding our finances. When we had debt, we had frequent fights over money (our debt seemed to bring out the worst in us). Now, while we still have arguments, money is very rarely the reason why. Tackling our financial problems has brought us closer together as a couple.
Being Debt Free Motivates Me to Work Harder
That’s right, now that I’m out of credit card debt I’m motivated to work even harder so I can continue to live a debt-free life. Our goal is to either pay cash for our next house or have a substantial down payment (well over $100,000). Not having to make a mortgage or rent payment every month would be a dream come true.
Allowing us to Retire Early
My husband and I both work for ourselves, and while we are doing what we love, we don’t want to have to work for the rest of our lives. Staying out of debt will help us achieve our goal of early retirement. If we have no mortgage payment, no car payment, no credit cards and very little monthly expenses, that means we can take time to travel, spend time with friends and family, focus on hobbies, exercise and just relax.
Anyone who’s been in debt knows just how hard it is to get out of debt, and that’s my main reason for choosing to remain debt free. Debt is what ties you to your employer, your city, your house and overall, your life. If you want to start living your life and following your dreams, you have to first get out of debt.
What are your reasons for getting, or staying out of debt? How would/does a debt free life allow you to chase your dreams?
About the author: Sarah Brooks is a wife, mom and blogger at The Frugal Millionaire. Her and her husband are both self-employed and working hard to reach financial independence. In her free time, she enjoys spending time with her family, being outside and baking.