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If you know much about me, after reading the title of this article you might have wondered if I meant to write this for April Fool’s Day. That’s because I’m the guy who warns against the dangers of debts and wants you to get out of it more than anybody. But when it comes to making financial decisions, having debt can make creating your monthly budget easier.
What do I mean? Well when you have debt, whether it be student loans, car payments, or credit cards, your financial decisions are pretty simple . . . and limited. You must make payments on these monthly obligations so you put the debt in your monthly budget and after accounting for the debt and basic necessities such as your four walls, you have little money left in your budget each month. That’s because your freedom and options were taken away when you initially signed up for the debt and your decisions are now controlled by your monthly obligations.
When you are debt free you have more options available, but it also means more decisions need to be made on your budget. Now instead of having to pay your $299 car payment you have the option to spend it on lifestyle, save for emergencies and retirement, give more, or a combination of all three. At first it can actually be quite overwhelming! But instead of worrying about making a mistake, embrace the options that you now have and realize that when you are debt free what you do with your money is really all preference.
So are your finances really easier when you have debt? Of course not! Does it make it easier not to think? Probably, but is it easier to live your life? No way! Just because it’s easy doesn’t mean it’s worth it. A lot of times we get so comfortable with our debt that we forget to envision a life without it and that’s unfortunate. Instead don’t let the “ease” of making your payments become a deterrent in experiencing both financial freedom and the option to live the life you want to.