I was driving to lunch with a friend the other day and he asked me what my plans were for getting rid of the debt in my life.
He was referring to our mortgage.
This put me on the defensive and I quickly shared my philosophy on good and bad debt.
Then I straight up said I was comfortable where we were at. And it’s the truth. I have no plans to pay this debt off early under our current circumstances. I’m comfortable having it.
The debt allows us to have our own place, it’s at a low interest rate, and we can use all of our excess funds to save for retirement. In fact, if anything, I’ll probably refinance it later on this year (I wrote this a while back. I’ve since refinanced).
The reason my friend asked the question: he is fortunate enough to be entirely debt free. He saved up to pay for his house in full, and has no other consumer debt. A very radical move on his part. He shared with me that waking up everyday knowing you don’t owe anything to anyone is a feeling I should strive to experience.
He said my spreadsheets and “acceptable leverage” couldn’t touch the freeing experience of being totally debt free. Who am I to argue with him? I’ve never experienced what he has. So I had to acknowledge his feelings and respect that he might be on to something.
I stopped to ask myself, “what is stopping me from completely getting rid of all the debt in my life?”
Are those barriers positive things or are they negative?
Am I creating them, or are they really there?
My point today isn’t to argue my particular situation or to debate paying off your mortgage. I want to hear from you about the radical financial moves you may be considering for the new year. I also want to know what might be preventing you from making your move?
I’m going to skip the part where I actually make the case for more radical financial living. That’s going to be different for every person, and I’m going to assume it’s something to be desired. But I will say this, if a more radical approach to your finances could lead to more freedom and happiness, then it’s probably worth pursuing.
Here’s a few radical money moves that I thought of:
- Skip the student loans and pay for school by working.
- Save and pay for your house in full.
- Save over 50% of your income for retirement and retire in your 40’s.
- Give over 50% of your income away.
Don’t believe that these items are realistic? Check out the article I wrote for US News that lists names of actual people who have made these moves and more. (read: totally radical money moves)
Also, check out these suggestions from Twitter followers and friends:
There is no law preventing you from doing these things. So what are the barriers that prevent us from making them a reality?
Some of the things that come to mind are our traditions and customs. We just follow the herd. It might also be peer pressure from family, or simply seeing what the Joneses are doing across the street. It may be selfishness. Fear of the unknown is probably also a factor. Probably the biggest barrier: it’s freaking hard, because we don’t want to sacrifice today for tomorrow!
In 2012, Mrs. PT and I will be doing some things to pursue a more radical financial life. One of those things may be attempting to get rid of some mortgage debt. We’ll see.
If you’ve overcome a barrier in your life and achieved a radical money move I’d love to hear your story. Share it in the comments below.
And here’s a somewhat rhetorical question for everyone: What barriers are keeping you from a radical financial life?
Image by Amin Choc