Buying a house and paying for your education may be considered to be essential debts.
Be smart about paying back those two large debts as quickly as possible.
As the first 5 years of scraping by passed we noticed that our mortgage repayments were now slightly less than the average rentals and the proportion of interest to principal charges had improved slightly to around $85 interest and $15 principal, better ,but still a source of dismay.
After another 8 years things were getting brighter and we were able to increase our monthly installments so that the principal repayments were now more than the interest charges and very soon with great relief we were mortgage free.
After our years of hardship we have decided to resist the temptation to “trade- up” and continue the freedom of being mortgage free. We are now able to save money each week so as to use it for some of the finer things of life although not extravagantly and have great peace of mind and no debts.
Freedom from debt is freedom indeed.
1. Images of money from http://www.flickr.com/photos/59937401@N07/5929481283/ Received 13 Nov 2011.
2. Spreadsheets by Dr Jon Wittwer. http://www.vertex42.com/.