Should You Pay Off All Your Debt?

This post starts the Debt section of the How To Live Totally Free plan. And I will answer the following question you probably have: Should you pay off all your debt? Being debt-free gives you not only a tremendous amount of power, but you won’t waste money paying creditors. Thus, you can use that money to live while you pursue your goals. So continue reading to learn the answers to this question.

Should You Pay Off All Your Debt? No, Because That’s Quite Difficult

The reason I give no as an answer to this question because it’s quite difficult to pay off all your debt. This doesn’t mean you shouldn’t try, however. It’s just if you want to live totally free don’t postpone your decision because you still have some debt.

The debt that’s the most difficult to pay in full is mortgages and student loans. Years ago I would’ve only included mortgages because most people have to borrow a large amount of money to buy a house. Because they don’t have the savings to put down a large downpayment. However, in today’s American society many people have large student loans they are paying. Some of these loans rival a mortgage, especially if the person went to graduate school or got a professional degree like Medicine or Law.

If you have a mortgage or a student loans that’s over six figures you can’t pay that off unless you are making six figures before taxes. Even then it will probably take you two to three years to pay off those large balances because you still have to pay for other life expenses.

So I think it’s fine to start following the How To Live Totally Free plan while holding a mortgage or a student loan. There are debts you shouldn’t take, however. I’ll discuss that in the next section.

You Should Pay Off All Credit Cards And Personal Loans

Now the debt I don’t want you to carry into this plan is credit cards and/or personal loans. Why? Because these have high interest rates and will drain your income and/or savings.

Plus, if you can’t develop a plan to pay these off beforehand that shows a lack of willpower and a discipline problem. And if you want to live totally free without having to sell your labor to an employer in exchange for a steady wage then you will need willpower and discipline. It’s very easy to fall into easy spending habits and doing nothing instead of investing your money and your time into your goals.

If you miss any of the posts of the How To Live Totally Free series you can find all the posts here.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x