I myself have become hung up on this idea that right now debt is the enemy and must die a horrible death. While this is technically true, I had the realization that while I have been blogging about debt in general, I need to remember that there is more to finances than just debt.
Last week I wrote about sending in the last truck payment, paying off our new truck in full in only 2 years. While this was an awesome feeling, I started planning the next stage of the battle… paying off our house. We chose this as the next step as the other major loans we have are school loans with my wife’s being around 4 or 5% interest and mine at 1.75% interest (yes, 1.75%), so it makes more sense to pay off the house at 6.25% interest first. So I mapped out the course, plotted the changes in payments in the checkbook and ran everything out to the end of the year to be sure to include any non-recurring expenses like tags. Everything looks good.
I realized that I have been so focused on eliminating debt and reducing that balanced owed on everything to zero dollars that I completely forgot about looking at our assets as far as evaluating our financial predicament.
So I figured out what our real assets are and their worth and I actually feel a little better. I guess it’s just another way of looking at things so that I can find motivation and positive reinforcement that we are making changes for the better. I am proud to say that for the first time in a long long…long time we actually own stuff free and clear.
Anyway, while debt reduction and elimination still remains the focus, don’t forget to stop and smell the roses every now and then and be thankful for what you have.
$16,000 -House: Worth 50k – 34k owed
$17,500 -2006 Dodge ram – owned free and clear (edmunds.com value)
$4000 – 2000 Chevy Blazer – owned free and clear (edmunds.com value)
$13,000 – 401K – used to be worth a lot more *sigh*
$50,500 – Tangible Assets
Wow, now that is inspiring. Of course you add to that the $105,000 in debt we still have and we are actually worth -$55,000 or so, but some day that will come around too.
My point is this, successful debt reduction is just as much psychological as it is financial. I speak from experience, the right state of mind changed everything for us. So while the staggering numbers of the debt bills are depressing, there is hope. You need to use whatever motivational tools you can. I try to motivate myself as many ways as possible. Realizing that we actually have assets for once in our lives, now that is motivating.
Good luck in finding your own motivational tools.