Why becoming debt free is not one of my goals

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Should you aim to become debt free?

Key points

  • I have set many goals for my financial life, including saving enough for retirement.
  • Becoming debt free is not one of my goals.
  • I believe that debt is a tool and there is no reason not to borrow when necessary.

When it comes to my finances, I have tried to be responsible and set many goals that will help me build wealth. But, becoming debt free is not one of my goals, although many people make it their goal to pay off everything they owe.

Here’s why I don’t prioritize deleveraging or make any special effort to repay my current loans or avoid borrowing in the future.

There’s a simple reason why getting out of debt isn’t a priority

I currently owe money on several different mortgages, and my husband has an old business loan that he has been slowly paying off for many years.

Paying off these debts early is not a priority for our family and, in fact, we only made minimal payments even though we could afford to pay them off sooner by sending extra money each month.

I am not worried about freeing myself from these debts, as these are low interest loans that were designed to help us take steps to improve our overall financial situation. They are meant to be repaid over a long period of time and the interest they earn is tax deductible for us. And I can usually get a better return on my money by investing it in the stock market rather than paying off my debts early and saving on interest that I would otherwise have to.

If I had really expensive debt that I incurred for assets that are losing value, like credit card debt used to pay for vacations or everyday purchases, then I’d be eager to pay those guys off. of loans. But I tend to steer clear of this type of borrowing, instead making sure to only charge my cards for things I can pay for in one billing cycle before interest is due.

Since I only incur debt that I consider “good debt”, this is not a problem for me. I’m not afraid of debt because I know borrowing can be a tool that helps you grow your net worth over time, as long as you’re smart about the types of obligations you take on. When you get affordable loans for the right reasons, debt can actually be a good thing and paying it off might not be the best use of limited funds.

I would also be willing to borrow again in the future

Not only am I not worried about freeing myself from the debts I currently have, but I would certainly be willing to borrow more in the future. In fact, if I ever bought another house, I’d be happy to take out a mortgage, and if I had a great idea to start another business for our family, I’d be happy to borrow to get the business off the ground if I needed.

Borrowing money should not necessarily be treated as something to be avoided at all costs, and becoming debt free is the wrong goal for me and many others. Instead of focusing on eliminating all your debt, you can be better off if you avoid bad debt while using financing to help you achieve important goals that will build your long-term wealth.

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