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I Used to Be Afraid of Debt. Now I Understand How to Use It to My Advantage

By Eemusings @eemusings
I used to be afraid of debt. Now I understand how to use it to my advantage

I was super lucky to sidestep the burden of student loans. Thank you, scholarship! I'm getting to the age where a few people are starting to clear their student debt, but I'd say the majority are still paying theirs back.

I've always been debt averse. I've never really bought anything I couldn't afford, and have avoided going into consumer debt.

Granted, I have carried a balance on my credit card during some of the super fun times of unemployment and being down to one income. Paying that interest sucked - they were small balances of a couple grand but still. That shit stressed me out.

Using debt to get ahead

We paid for all our cars in cash. But unfortunately that never turned out too well for us, because we couldn't afford very good vehicles.

For this car I took out a loan and paid it down aggressively, eventually pulling from savings to pay it off in full 9 months in. This saved so much stress and at the end of it we have a reliable paid off car that should have years left in it (touch wood).

And after years of enduring substandard NZ rentals, I have bought a house of my own and am already enjoying the benefits. The peace of mind that comes with the stability of owning is priceless; I am finally able to own a dog; and I've noticed my health is better now I have a warmer, drier home environment. This means I can be more productive - not to mention be taken more seriously as a professional when I don't have a constantly literally dripping nose through winter and sniffles year round.

I don't expect interest rates to stay this low so I'm directing extra money to the mortgage where I can - early repayments at this stage have a massive impact on the long term total cost. Reaching retirement with a paid-off home will be a big win.

Going into debt as a calculated move has been one of the best things I've ever done. I'd probably be better off had I done so sooner.

Debt is debt and I still hate it - but money is a tool and debt can be too, done right.

In an ideal world nobody would ever need to borrow money (and we'd have 0% unemployment, poverty, homelessness etc...).

Sadly, that's not the world we live in - and if we do need to borrow money then the key is to do it wisely.


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