dont let the reality of future debt discourage present progress

May 28th, 2008

Don’t Let the Reality of Future Debt Discourage Present Progress

Hi, I’m paidtwice, and I’m in debt.

But of course, you all know that. However, sometimes I feel like my life is like that, defined by my debt progress and my current state of past payoff. I’m in “debt recovery” and I keep working and working at it but the possibility of future debt looms over me at every turn. There’s debt that I can choose to avoid – like purchasing luxury items beyond my means, not taking extravagant vacations, and the like, but there is also debt that feels unavoidable. The balance between being prepared for an emergency and paying down our existing debt is a tough one, and if I choose to save too little in order to make more progress on our debt, it could backfire and I could instead end up in more debt. This has already happened once in our debt reduction journey, when the engine in our Saturn self-destructed and we didn’t have the entire $3600 required to fix it. We did bounce back from that pretty quickly, but a bigger emergency (or a string of significant ones) could easily place us back into more debt.

And then there are our cars. This is the “future debt” I have been purposely not thinking about but I know, when I am honest with myself, is probably the most likely reality. The wheres and the whys aren’t important, but the fact of the matter is, the likelihood of one of our cars becoming inoperable before we have enough money saved to replace it is pretty high. I hope that isn’t the case, and both cars last another 6-8 years at least, but it isn’t very likely (especially given the track record of one of the aforementioned cars).

But for today, I have made a decision. Debt does not define me. I may be in debt, and I may be in more debt in the future, if we are not able to pay for a car in cash when the time comes to replace one. My goal is debt freedom, and I will do anything I can reasonably do to achieve it. But if for some reason, we enter into more debt – that will be okay. We will work to rid ourselves of it, and we will not take on any additional debt lightly. But I refuse to let the idea of future debt make me feel like a failure. We have come a long way, and although we still have a lot further to go, the road is a long one and there isn’t an easy solution. It isn’t possible to save for every possibility and make any progress at all on our debt. Because I know for sure that I don’t still want to be paying off my undergraduate student loans in 2017 (the current estimated payoff according to Sallie Mae).

Debt does not define me – past, present, or future. And the possibility of future debt will not completely derail our present progress. All we can do is make informed decisions, weigh risk and reward, and plan a course of action. And then – move forward with a balance of considered risks vs possible reward that we are most comfortable with.

Repeat it with me. Debt does not define me. Action does.

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20 Responses to “Don’t Let the Reality of Future Debt Discourage Present Progress”

  1. Well said. Those of us in debt just have to live one day at a time. Be joyous when we have those good days where we have a windfall, or an extra snow flake or two, and just be accepting if a situation comes along when incurring debt is the only option (read: 3600 for a new engine). We just have to pick ourselves up and continue on with our debt free plan. Eventually we’ll get there.

  2. Good for you for realizing you don’t have to be defined by your debt. It would be one thing if you were a total idiot and had no self-control or grip on your spending, but it sounds like you are very aware of your situation and making strides to improve it (you do run a personal finance blog, after all!).

    And while I don’t have debt right now, like you, I worry about the “future debt” that will happen whenever my car gives out, though hopefully it won’t be for a few more years. I also know that whenever I decide to move apartments, I’ll have to have all that money for deposits. So yeah, it’s very easy to live in fear of all that, but I think as long as you are saving a little here and there for an emergency fund, you will be just fine.

  3. Because I live on a limited income, I have very few snowflakes to put toward my debt. But, with each monthly payment, I inch forward to debt pay off. The online calculator tells me it will take 7 1/2 more years. It’s a long time, but my debt is a good debt…an educational loan that saved my teen granddaughter’s life.

    Taking each day as it comes, is all we can do and hope for the best as the days and years go by.

  4. I read a good post by some1, I wish I remembered who it was b/c I really like it. They talked about different things he has to remind him of his goals. It is hard to look long term so he would have like pictures of nice cars and stuff that he wanted. He knew he couldn’t get them any time soon but these pics gave him motivation to keep working for it. You should do something similar like photoshop a picture of your credit card statement with a $0 balance!

  5. debtheaven Says:

    May 28th, 2008 at 4:46 pm

    I’m honestly beginning to believe that debt is indeed a necessary part of life. We had major flooding in the basement, it took us nearly three months to identify the cause. We were less than 1K from being out of 7K of home improvement and consumer debt before we redid the patio (7K) believing that was the problem. Then we repaired the boiler, changed two down pipes, replaced the sump pump. We finally learned out pipes were blocked, when our neighbor FINALLY let us dig up our / his manhole. (The two plots used to be one property.) We have cameras coming to check out the pipes, it may or may not be covered by insurance. I want them to come to tell us if we too have a manhole buried, and if not, where to dig one. I never want to depend on my neighbor’s goodwill, or on his successor’s, again to check out my pipes. So we’ll have to borrow for that too. We do have savings, but they’re going down fast with all this, and our salaries aren’t going up, and we have kids, so it seems better for us to take out a low-interest loan for all this.

    I think as long as people incurred reasonable debt for needs rather than wants, everybody would be in better shape.

    I hope your cars hold out till after you’ve paid everything off! But even if they don’t, you’re still much further ahead than you would have been had you not taken this road.

    By the way, the boiler repairs came to 350, and he told us it could go another 10 years.

  6. I have been thinking along these same lines as we may face the opportunity to adopt soon and would need a loan to cover part of the expence. Thanks for the encouragement.

  7. debtheaven Says:

    May 28th, 2008 at 5:18 pm

    PS My rule is, I won’t take on debt for regular maintenance. I will take on debt for home improvements, like the patio or the manhole. (Although these were not even on my list, let alone first choice.) We’d basically decided that once we paid off our original 7K debt we’d be OK with taking more debt on for one home-improvement project at a time.

    I know and understand your reasons for paying off the student loans before the car. Are you reasonably sure the car will last till it’s paid off?

    We currently have two old paid-off cars and although it’s convenient, we only really need one. Our plan is that eventually we’ll sell both used cars and get a more recent (used) one. We keep putting that off though, because of the convenience of having two.

  8. I don’t think that it’s even my debts anymore. I have to start realizing that although my financial situation is certainly a major part of my life right now, it doesn’t define me either. I am the same person with or without money… just a little less stressed when I have it. :)

  9. And you’ve defined yourself darn well by action. Successful blog, whole popularization of snowflaking.

    In some ways I’m grateful for my debt in that it introduced me to a fun and supportive blogging niche and helped me have a great blog to run. And then of course reality kicks in and I start hating it for being so darn big.

  10. This is a great post; I think this is the best attitude to have about debt.

    I think it comes down to acceptance vs. action: if you just accept the idea that you’ll always be in debt…well, then you’ll probably always be in debt!


    But if you decide to take action to reduce and hopefully eliminate debt, then you’ll find ways to keep climbing out of the hole. Even when life throws you those high-dollar curveballs.

    We’ve willingly taken on debt to get to where we wanted to be in life, location-wise and job-wise for my husband. While we didn’t do it lightly, we were willing to take the risk rather than stay in a job/industry he didn’t like where we’d never have the chance to live/raise our children near family.

    It may take some time to knock out that debt, but I’d do it again in a heartbeat. You’ve only got one chance to grab the life you want!

  11. I checked in to the website and this post was just timed correctly for me. My debt covers multiple areas including over 30K in credit cards and $200K in school loans. I have ben feeling frustrated recently because my big goal of the last few months was achieved but it feels like such a mountain compared to this little hill I saved. I saved over $3K so I would not have to fall back on my creidt cards to pay for the move. Now that moving is closer there are expenses that I didn’t account for. I will need to purchase new furniture, account for two trips to find housing, the drive there and whatever new bills come up. I feel frustrated because I had promised myself I would not increase my credit card debt but see it as inevitable that I will be skirting my limit in the next two months despite the savings. I questioned if the work I put into putting aside the funds was even worth it and if I should have just tossed it at my debt.

    I have been feeling a bit on the spiral but realized that hey, I did achieve a goal I set. The funds I saved can be multiplied by my current interest rates because I will not have to use a card for it. In addition because of the money I saved, I will be able to live off my last two paychecks from my current job until I get paid for the new one in August. Once that starts I will also be able to start paying down what I accumulated. My spreadsheet tells me even with the unexpected expenses I will be able improve my debt to credit ratio and still have my emergency fund at the end of the year.

    SO, like you said, the debt is not who I am nor is it where I will remain.

  12. I agree with you in many ways, and don’t eant to rain on your parade, but it;s a bit depressing to think about, isn’t it?
    I’ve had this in mind for a while – the need to get another car relatively soon after becoming debt free. At the moment I have to stick to my belief that I will buy it outright. Otherwise I’ll feel like all my current efforts are in vain.
    H0owever you are right – it is good to be mentally prepared for the possibility.

  13. Give yourself a few congrats on the back – you deserve them! Think positive thoughts! You are doing a great job on your way towards becoming debt free – and with your attitude you will soon make it! Just keep repeating that and give yourself credit for the steps and progress you HAVE made! :)

    Pay cash for the next car? Nice to know you can write the check and have it paid for… but…is it the BEST use of your money? If your money is invested and drawing 4-8% interest or more, and you can get one of those low interest loans (the real ones, not the fake ones with the price of the car jacked up) and the loan will only be 1-3%, then is it prudent to lose the 8% interest to pay off a 3% loan? Sometimes it just doesn’t make financial sense…. but it IS good to know that you do have the money and can write the check to pay off the loan anytime. (watch the prepayment penalty clause dates) Whether to pay cash for the car depends on your investment interest versus the loan interest.

    Just something to think about – and each of of thinks differently – thank goodness!

  14. Great post! I’ve been feeling a bit defined by my debt, lately, and this is a good reminder not to feel that way. Rather than feeling the weight of our debt every month as we calculate our net worth, I should feel the lifting of chains as we are working on getting out of debt. My student loan payoff is scheduled for 2014, and my goal is to pay it off 2 1/2 years early. My husband’s will be paid off by next December! Woo hoo!


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