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There are a lot of personal finance bloggers who talk about how they’ve successfully paid of tens of thousands of dollars of debt.
Many did this in an amazingly short amount of time too – showing that with motivation and self-discipline people can achieve truly inspiring things.
These people are amazing. Don’t get me wrong, this is not an article telling anyone who’s paid of their debt that they did the wrong thing. Anyone with that much discipline, determination and will-power to reign in their spending and really apply themselves financially gets a lot of respect from me.
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Paying off years of debt in such a short amount of time is a truly commendable achievement, and provides the freedom to do whatever you want with your money – save for an early retirement, pay off a house in full, or just have a little more money to make day to day life a little nicer.
However, I do think there’s a pressure put on debt in a lot of articles. How to pay your debts of quickly, what cuts to make in your lifestyle to put towards your debt, how just a few years of really working hard can pay off in the long run.
Well, that doesn’t work for me.
The hype on paying off your debts is well-founded, but it doesn’t give much room for people – especially young people – who may have another focus.
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I’m not prioritising my debts right now.
Let’s be clear: I went to University for three years in the UK. My student and maintenance loans from those three years were about £21,000. Plus interest over the following 2 years – I’m not totally comfortable with sharing exactly how much debt I have (at least, not yet!), but I’m sure it’s pretty easy to do the maths! I don’t have mortgage debts, I’ve never owned a credit card, and I’ve never taken a loan out from a bank or anything like that. My debts are purely from studying.
So, there’s no one pounding on my door threatening to take all my belongings away. There’s no huge pressure in the UK to pay your debts off as fast as possible – if you’re earning below £17,775 a year, you don’t even have to start paying back your loans until you’re over that threshold. (I’m curious, is this different to other countries? Is there more pressure to pay your student loans off where you live?)
While my debts are something I know need addressing, they’re not the millst
one around my neck like people who perhaps have more serious credit card and mortgage debts.
I’m not saying that I don’t think about my student debts, and I’m not saying you shouldn’t either. When you’re blogging about money and all sorts of topic related to financial freedom, you read a lot of articles about debts, and it’s clear that those people who’ve paid theirs off or are pretty damn close to doing it, feel great and feel completely free. I’m not prioritising my debts for a reason.
My student debts lurk in the back of my mind like a big black shadow – it’s something I need, will, get around to, but not right now.
So, if not debt repayment, then what?
The Current Focus
I’m not coasting through life with a stable job, living paycheck to paycheck each month without any thought to debts, savings or even retirement funds (which trust me, when you’re in your twenties is a horrifying thought).
At the beginning of this year I set up my own business as a freelance copywriter and virtual assistant, and have being doing that ever since. I’m pulling enough income to live (yes, before anyone mentions it, I am travelling – but we’re actually spending less now than we ever did renting and working in the UK), but thoughts on saving are on hold for now.
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Financially, I’ve taken a huge step back. My income is small, my living costs are small, and I’m focusing all my energy on building a business from the ground while enjoying the wonders of the world at the same time. I saw a lifestyle I wanted to achieve, and waiting two, three, or even more years to pay off my debts and get my responsibilities in order wasn’t an option. My career, my “life-path” needed to happen now – so that’s what I’m prioritising.
If you have debts, yes repaying them will give you a lot of financial freedom. However, if you have ambitions for a new career and total lifestyle change, your priority should be on your happiness.
We all have different priorities, but I want to remind everyone that if yours are different from the masses, that’s ok. Pay off your debt now, or later – just make sure you’ve got a good reason for putting it off.
As for me, financial independence will come (oh, I’m coming for it!), but overcoming my debt can wait: I’m focusing on building the foundations to get there first.
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The Wallet Moth says