We use the argument that when we have a balance outstanding and pay it down aggressively or make additional payments that in effect we are “earning” money by not paying interest. So it sounds great. I “earned” 12% by paying extra on my card this month, goes the thinking.

But then, once we pay off the card (house, boat, whatever), we tend to forget that and all we can see is the % rate earned in our savings account (MMA, bond, etc. ). I earned 4%, we’ll say.

But in truth, we are still benefiting from the payoff / paydown we did. It has far reaching effects. So when you are feeling a little down about what you are earning right now, if you have paid off / paid down on debt of any kind, remember this: You are living in the reality of the “earnings” from those extra payments. Those “earnings” are freedom.

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