“Money in the bank is like toothpaste in the tube. Easy to take out, hard to put back”
If you are $40,000 deep deep in credit card debt the sense of relief you will have once you finally pay it off will be immense.
That feeling though will pale in comparison to the feeling you will have on the day that you look at your bank statement and see $10,000 of your own money sitting there smiling at you.
Once you have real savings you will never let yourself get back into debt.
It is because your old self, and those behaviours and habits, will have become unrecognisable.
Some time ago we crunched our debt. The technique we used is documented here on my older blog. Now we have no hire purchases. No Visa. No overdraft. We do have a lightweight mortgage on our current fixer up house, but it has been hammered hard and paid down.
If you are young and starting out in life ask any older person about debt. Seniors will probably tell you that the debt that they got into in their 20’s was about as good an idea as getting their tattoo on a boozy 19 year old’s night out. Both can seem like a good idea for about 5 minutes or even 5 years. After 5 years there may be some nagging doubt. In 10 years perhaps deep regret.
The things you love today will not be the same things that you love in 20 years from now. You will grow, develop and change. In the future you may look down at the green ink on your arm and the red ink in your bank account and wonder what you were thinking. There are too many people struggling to pay off a super sound system and a Gibson Korina Flying V electric guitar 10 years after both have gone to the tip, been stolen or gotten lost in transit.
If we can’t pay in cash it means that we can’t afford it. We save up until we can or we get creative with the problem.
Being smart with money means holding off that red ink as best you can. It will leave a nasty stain on the future you.