^[2] It’s a chicken and egg type question – which came first, borrowers or lenders? Of course you really can’t have one without the other (legally, that is), but my instincts tell me that it could go either way. Just mention the word “debt” and many people automatically think of credit cards ^[3] but those little pieces of plastic with the magnetic stripe were late to the party when it comes to debt. Debt has been around for centuries and many historians suspect it was one of the reasons humans created writing – to record financial transactions!

I’m always amazed when I write an article extolling the virtues of a debt free lifestyle. There is always a segment of the population that cries foul, insisting that debt is the path to wealth and riches … or at least cash back rewards. You CAN make money with the temporary cash that debt gives you. Debt can help you buy a home, provide an education, or finance a business, so there! I said it! But for me, debt was and has been indicative of five things:

• A lack of money
• Impatience
• Discontentment
• Poor planning
• Short-sightedness

Debt indicates a lack of money

The ultimate “DUH” moment, right? I used debt because I was short of cash. If, at my next annual review, my boss said, “You’ve done such a fine job, we’re going to multiply your salary by a factor of ten and make it retroactive for the last six months. Here’s your check!” I can tell you right now, I know I wouldn’t be thinking about rewards cards, getting a home equity line of credit, or wondering what my credit score ^[4] was. When I don’t need debt, I rarely, if ever, use it (and I’m not talking about credit card ^[3] debt you pay off each month either). So my question to myself is: do I really “need” it at all?

Debt indicates impatience

I know it did for me. In almost every case where I used debt to finance a certain lifestyle, I was impatient and wanted it now. I used debt because I was unwilling to save to buy certain things. I wanted them NOW and was willing to pay the interest to satisfy my impatience.

Debt indicates discontentment

In addition to impatience, I was discontent with the results of my poor financial decisions up to that point, so I used debt to ease my covetous heart and to buy the things I wanted because I didn’t like the things I already had. Vacations, clothes, cars, you name it, I wanted to appear better off financially than I was at the time and I was willing to pay the interest to make myself appear successful.

Debt indicates poor planning

I’ve charged tires and transmissions, vacations and vet bills, clothing ^[5] and car repairs, insurance and ice cream, and why? Because I didn’t prepare for those expenses by having an emergency fund ^[6] or by making small monthly “payments” into a dedicated savings account. It was poor planning, plain and simple and debt with interest charges was the result of my failure to plan.

Debt indicates short-sightedness

How much would I have today if I had waited until I had the money, learned patience and contentment, and planned a little better? It all boiled down to my own shortsightedness. You may have read how I paid off over $120,000 in debt ^[7] (true story) but the sad fact is that I went that far into the hole in the first place. The amount of interest I’ve paid would probably make me sick if I added it up.

But guess what? I still use debt! (though begrudgingly)

I just refinanced my house at 4.75 percent … why? Because of reason #1 – I don’t have the money to pay it off … yet. Since I have no other consumer debt than one small student loan (which I am attacking), my cash can be used to pay down the principle of my mortgage ^[8] and free me from the burden of debt forever. I gotta tell you – it’s a good feeling to be THIS close!

Photo by Kath Walker Illustration ^[9]

About the author

Ron has written 1083 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[15] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

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