Breaking the golden credit shackles is like having a super power.

Nowadays, debt has become so commonplace it’s practically considered a rite of passage. You’re an oddball if you aren’t loaded to the gills with monthly payments.

This wasn’t always the case. Many decades ago, the typical person rarely had high debt. They didn’t even have access to credit. They lived within their means, more of less out of necessity.

But now it’s become expected to go through life chained up by the golden credit shackles. People routinely have $700+ monthly car payments so they can drive to the grocery store in style. Owe tens of thousands of dollars on student loans for degrees so they can sit in front of a computer all day. Take out jumbo mortgages for McMansions. And run up the plastic for the new Air Jordans.

Sadly, many people are actually dependent on debt just for everyday expenses like fuel and food.

Many Amerians live in high cost of living areas, where rent and living expenses can comprise 50% or more of their annual budget. This makes it harder to avoid using credit to keep above the cost of living. Many blame the “necessities” of life, like a college education, or cars, as an excuse for debt. And for sure, for some people, it’s a necessary evil.

Over a decade ago I was in that camp myself. I had almost $17,000 in defaulted student loan debt. Debt for which my wages were being garnished roughly $200 every pay period to go toward a mountainous principle. I ran the numbers one day. Factoring in interest, it was going to take about five years to pay off my debt. At the time, I was only making about $35,000 a year, so these payments represented almost 15% of my annual income. For me that was big. It literally made my have to budget to the dollar. Every month. And all for a college degree I didn’t even finish.

Then there was my auto loan. That was about $280 a month. For a car I was more or less forced into buying. I lived in Philadelphia but worked in New Jersey. Not exactly a commute you can make through public transportation. Because I was financing the car, that made my insurance rates jump by almost $100 a month. On top of that, I had bridge toll to pay for the privilege of reentering the City of Brotherly Love. That amounted to $25 a week. I ran the numbers one day on all that, too. And I realized I was literally breaking even. I was going to work so I could make enough to drive a car, so I could keep going to work to pay for that car. Someone call Sisyphus and tell him he’s just been outdone.

On top of all that, my used car was a financial landmine. Every three to six months I could count on something going bust, and needing $500-$1000 or more of repairs to fix. There were the regular oil changes, annual inspections and emissions test (a requirement in Pennsylvania), and the fluctuations in gas prices.

Due to the tightness in my budget, it made it virtually imposible to save money or invest. I remember one night lying in bed feeling good for a change because I had all of $500 scraped together in my savings account. The accumulation of three months of savings. Then that week my car’s electrical system had a nervous breakdown, and that $500 flew out of my hands faster than Sonic the Hedgehog chasing after a golden ring.

:::sad slide whistle:::

But nowadays, after a lot of hard work, sacrifice, a cross-country move, and a job change into a better industry, I’m completely debt-free. I’ve been liberated from the golden shackles for over five years now. The only credit I have is a single credit card, which I use to streamline multiple subscription costs (including Medium), and make sure to pay off every month. I don’t care about reward points, airline mileage, or the fact that I can save 5% at a Ruby Tuesday’s when Jupiter aligns with Saturn.

If people expended the mental energy they waste trying to game credit card reward systems on things that would actually make them wealthy — like learning a business niche or picking up a side hustle — they likely would have far few problems. Not to mention have more money.

I’m not a Dave Ramsey apologist, to be clear. Debt has its uses. Keeping a good credit score can save you thousands on mortgages. Like most, you’ll likely need a mortgage at some point, so you might as well put yourself in the right position for when that day comes. Debt isn’t necessarily evil like the One Ring. It’s a tool that if used properly, can yield great benefits.

However, being free of unproductive consumer debt is something I embrace whole-heartedly. That means no revolving credit card debt, no personal loans, lines of credit, furniture store payment plans, most student loan debt (unless you’re pursuing a legit degree with a real ROI), no brokerage margin, auto loans, or anything else where you’re buying something that loses value. I don’t care about the Ford Expedition Road Buster 5000. I’ll drive my senior vehicle until the wheels come off.

I see the logic in the wealthy’s “Buy, Borrow, Die” tax-avoidance strategy. But there’s something very personally satisfying about powering your present and future on your own steam.

Nothing beats owing nothing.

Since becoming debt-free, I’ve observed a litany of benefits and positive side-effects in my life and in my general outlook. And if more people were aware of them, this current toxic culture of credit would evaporate.

Peace of Mind

This is the strongest benefit. Without your mental health, you’re really up a creek, no matter what else you’ve got going for you in life. I can remember at night tossing and turning, thinking about some imminent bill. Or going to the grocery store and anxiously waiting in line to see if my credit card would be approved while checking out. Or the stress of seeing my paycheck widdled down due to the garnishment, to the point where I wondered if I’d even have enough to live.

By freeing up my mental space that had been obsessed with my debt problems, I had more time to properly focus and enjoy other interests. Reading, writing, and going on trips. It also makes me less concerned when there are serious dips in the market, the threat of recession, or potential job market issues. I know I don’t carry any excess costs. It’s not hard to support yourself when you only have basic bills, like rent, food, and utilities. It’s only when you add a bunch of pointless debt payments on top that the slightest tremor in your life can cause everything to crash down.

More Money for Investments

The first step toward getting wealthy is obviously securing a form of income. Usually that’s in the form of a job or business. The second, and no less important, is eliminating all unnecessary debt out of your life. Many people are cavalier about this step. They tell themselves, “A good defense is a good offense,” and choose to plunge right into investing when they start making some money.

I understand the temptation. But the reality is investing is a long-term game with a lot of ups and downs. Debt payments are permanent, minus declaring bankruptcy or a miracle student loan forgiveness deal. The sooner you knock out a debt, the sooner your income is guaranteed to increase. But an investment is not guaranteed to go up in value, or increase your income. The great stock market bull run we had from 2009 through the end of 2021 made everyone feel invincible. Buy the dip. “Stonks” only go up. That may be true in the macro. But the micro level can still mean multiple years before seeing serious returns on your investments. Especially nowadays, as we’ve entered an era of higher interest rates and quantitative tightening.

Removing needless debt has a very positive compounding effect when it comes to building cash flow for investing, too. And that can mean helping you get to the point of financial independence a lot sooner. Supposing you were able to devote 50% of your income toward investing. How much faster would that get you to retirement, or to another phase of your life?

Motivated to Buy Less Stuff You Don’t Need

As I’ve written before, I’m a Cheap Ass Mofo. Not a so-called “minimalist.” I drive a senior vehicle, almost never eat out, and generally live a modest life. I even make my own pizza, just to avoid having to pay $7-$10 for that lickable cardboard they sell at the store.

Of couse, you can’t cheap your way to wealth. Wealth is all about growth, not just trying to live like a monk and waiting for your investments to fly to the moon. But I’ve found that since paying off a heavy amount of debt that once afflicted you prompts profound psychological changes. It’s like I’m a “debt refugee,” refusing to go back to that chaotic land of interest payments and late fees. You become more cost-conscious and aware. You start seeing the world of expenses more like Neo at the end of The Matrix. You see the innumerable insidious attempts companies make on your wallet, while often exchanging very little of value in return.

You start to become more focused on value, because you see material purchases not in terms of strict dollar amount, but instead corresponding to your labor, your time, and ultimately, your own ethical code. It’s why I rarely eat at fast food restaurants. Why would you overpay to get underfed with junk that clogs your arteries? I’d rather skip a meal, or buy one of those bland individual tuna packets.

Focus More on Experiences

Now, with all this saving money and talk of building wealth, you’d think I’d be advocating a number-crunching analysis on every transaction, down to the penny. Far from it. Once you train your mind to pre-screen out the nonsense whizz-bang marketing and promotional squawking behind many products, you start to redirect toward holistic and experiental expenditures. Toward more personally fulfilling activities. I’ve been able to go on trips back home to visit family, buy books, begin building a YouTube channel, even fulfilled a goal of sky diving, among other things, because I don’t have a giant albatross of debt hanging around my shoulders. I’m not saying you can’t do some of those things while deeply in debt. I’m saying that you want to put yourself in a position where you always have the freedom to maneuver how you want.

You Have More Control Over Your Life

Here’s the deal. No matter how well you prepare, life is going to upend you with its unpredictability at some point. A family member will get sick, or you will. You’ll have an emergency expense, like having to replace a major part in your car. Someone will trip on your sidewalk, and decide to sue you for their own clumsiness. Your partner may leave you, or tragically pass away. You’ll get laid off, or furloughed. We just saw a global pandemic and the entire economy get shut down. WWIII could hit. Who knows.

I’m not trying to sound pessimistic. I’m actually more of an optimist. But life has too many twists and turns to just blunder ahead acting as if everything will be fine. Even if you live the simplest life imaginable, you’ll still age. And age can bring complications and health issues. Staying out of debt frees up your income to enable you to better handle whatever life can throw at you.

Many people may say they don’t have a choice when it comes to debt. They have to go to that school. Buy that car. Take that vacation. And live that lifestyle they think they should. But that supposedly inevitable “that” is actually the fulcrum of the mindset shift. It is a choice. I didn’t have to move across the country and start over in a new state and a new industry. I could have stayed where I was. Broke, in debt, with little prospects. I chose not to. And it wasn’t easy. I wound up living out of my car for a bit. One day the only reason I was even able to eat was because I happened to find a crumpled dollar on the ground. The wind had blown it there. And one dollar, combined with some loose change in my pocket, was enough for me to buy two donuts at the supermarket.

Eventually it all worked out. Even though I still need to work for a living, I’m still freer than most. I owe nothing now. I hope that if you can’t already, that someday you’ll be able to say the same. 🙂