There are no wrong reasons to get out of debt. There are some queer reasons for debt reduction.
Strange Debt Reduction Reasons
Stolen from Dave Ramsey, with minor quibbles with his assertions.
- So a Medical emergency isn’t also a Financial Emergency
That is a very good reason. In Canada you are less likely to be wiped out by a $1M Hospital bill (although still possible), but if you get sick and can’t earn income, that is a problem.
- So you aren’t declined at the cash register again
Makes sense. Maybe cut down on spending too, not just eliminate debt.
- To be able to buy a home
Seems a bit of a dichotomy to lower debt so you can go into much larger debt.
- So you can give generously
It is good to think of others, but remember to pay yourself first. Martyrdom is fine for Joan of Arc, but don’t dig an enormous debt grave, as that is where debt martyrs end up.
- So you can fill up your gas tank
You could also take a bus instead.
- To read the restaurant menu in order instead of by price
Maybe don’t eat out so much? Debt reduction is easier when you aren’t debt-building simultaneously.
- To go on a vacation that you don’t have to pay for afterwards
Everyone deserves a vacation, maybe not one that could bankrupt you though?
- To invest and earn interest, not pay it
Solid! I would have made that #1 on the list.
- To say “Yes” to invitations instead of trying to guess if you can afford it
As a bit of a xenophobe, I start with “No”
- To have margin to help your family
An odd turn of phrase. I hope it meant having extra cash so you have a way to help out and not use credit for that.
- To actually keep your hard-earned cash
After all that is the goal of Debt Reduction always.
Odd Debt Reduction List?
A good list. Maybe the phraseology is a bit obtuse in spots.
Other thoughts on Debt
My list of debt commentary articles is quite long, so let’s stick with the basics.
- Three Solid Ideas For Your HeLOC is a misdirection title. With interest rates going up, home equity lines of credit are becoming heavier anchors on your financial life.
- Pay Day Loans? Absolutely, positively NO! Go talk to a licensed insolvency professional before you do this.
- Surreal Paragraphs Found in Credit Card Bills, if you carry balances on your credit cards, you are in trouble. Look at their estimate for how long it will take to pay off the debt on minimum payments.
- A Mortgage Changes You, which is very accurate. When you get a mortgage, your life changes, and it will be a major element of your financial decision-making process.
- Make More by Reducing Debt with some elementary (maybe naive) arithmetic.
- Straight Talk on Your Money is not just a good book (and podcast). It explains how debt can get out of control quickly.
- Debt-shaming: Debt is Bad, but You Aren’t having a poke at the “influencers” who say my commentaries about Debt being BAD is debt shaming.
- My coup de grace There is No Such Thing as good debt. Debt is a tool, like a chainsaw, and must be respected.