This morning I said, “Hey it’s our debt-free anniversary!” It’s a good thing I have the blog because that’s how I keep track of how many years it has been. Eight! When we paid off our house DD was in kindergarten and now high school is on the horizon.
She said, “How did you guys DO that?”
Short answer… when we were first married and had less income we paid off all of our credit cards, then our car. We hated interest! After that, we only bought what we could pay in full for (except the house). Then we went after the mortgage.
I shared that most people use credit/debt to pay for trips, clothes, cars.
I never envisioned how quickly our decision to be debt free would become a touchstone for talking about college costs. Many people would say, “Eighth grade is WAY too early to think about college!” I disagree! Three years from now she will be narrowing down choices for college, which is a $100,000 + financial decision. One day you’re deciding how much babysitting money to put on your Starbucks card and the next day you’re taking out a $7,000 unsubsidized loan (interest accrues right away). The steps she takes in high school can directly correlate into money and more choices for college, if she wants them. We have found that when you stop borrowing money you need to think 2-3 years out for major expenses.
If you’re at the beginning of a journey to pay off credit cards or school loans, keep going! It’s a huge undertaking in our culture of readily available credit, but if you are successful you will give yourself and your children an amazing head start at building wealth and freedom.