Forgetting your debt? | TeacHer Finance

Courtesy of Ending Insanity, I read this fascinating article from Afford Anything the other day and have been thinking about it ever since. If you?re even mildly interested in personal finance, you should take a minute and read this article. Seriously, it?s really, really good and very unconventional. What?s not to love?

I wanted to suss out my feelings about the author?s points a little bit, both for the purposes of discussion with my readers and to sort out my own views on the author?s ideas. Here?s what I?ve come up with so far?

I agree with the author that:

1. We?ll always have obligations, even if we?re debt free. This is something I?ve never understood about the truly die-hard debt haters among us ? even if you?re debt free, you?ll still have bills. Let?s say you?ve paid off all debt, including your mortgage ? you?ll still have a phone bill, property taxes, utilities, etc. So debt freedom doesn?t equal financial freedom?exactly.

2. Finding opportunities to grow wealth is equally as important (if not more so) than reducing your debts. When people are new to personal finance, they often get so caught up in paying down their debts that they forget about the whole other side to the financial fitness equation ? saving and investing. I know that I have been very guilty of this in the past, so the article really made me get excited about ?fully funding my Roth IRA this year!

3. Paying off debt is the same thing as dieting ? it?s so focused on deprivation, that to most, it?s a total turn-off. ?Nuff said.

But I don?t agree that?.

1. You should forget about your debts. The author isn?t saying you should stop paying on your debts, just that you should stop obsessing about them and focus on building wealth. But I think that keeping your debts in mind is important, if only so that you don?t continue to add to them.

2. Debt is disconnected from building wealth. I get that paying down debt is completely different from investing and saving?at least as a financial act. One is about building up, the other is about paring down. But debt can significantly impact the cash flow with which you can save or invest. If you prioritize paying off debt first, you end up with a lot more money to do what you want with?like saving or investing. I guess I?m trying to say that the author of the article presents saving and paying off debt as if they?re completely separate, when they actually aren?t.

3. Going out of your way to avoid saying ?the D word? is helpful. This whole portion of the article was just silly and pointless.

What do you think? Is paying off debt as important as building wealth? Do they go hand-in-hand or are they completely disconnected from each other? Let?s talk about it!

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