What’s The True Emotional Cost of Living With Debt?

Do you really know what it feels like to be a slave to the lender?

When we borrow money, there’s not just a financial cost but also an unexpected emotion interest payment that goes along with it. And boy do I wish I could have felt what this pressure was like before I applied for my student loans. 

The Insurmountable Weight of Student Loans

Growing up, I started a lot of projects but failed to follow through on many of them. In response to this observation, my dad strongly pushed for me to go to college. It was his way of helping me learn how to finish what I started.

During High School, I interned and worked with my uncle at his little animation studio. My uncle never went to college but was successful as an entrepreneur. I didn’t want to go to college, and my uncle's example gave me a picture of how I could successfully skip this step. But, as a way of honoring my father's request, I not only attended college, I graduated. 

My first year was at the local university in Flagstaff paid for in full by grants. The following year, I didn’t receive these grants and instead of going into debt to continue, I transferred to a local community college. 

Shortly after, I got married and we moved across the country to Atlanta Georgia where I finished my bachelor's degree at the Art Institute of Atlanta in 2008. While I approached my schooling finances wisely with the first two colleges, I threw it all out the window when we moved across the country to attend the new one. As a result, I accrued a mass of debt as did my wife who also finished her degree from the University of Phoenix. When we finish paying off our loans and interest, we’ll have paid around $150k. 

Backdoors: Mistakes Lead To Debt 

While receiving student loans was a result of not understanding or appreciating the weight of this debt, there are other traps we can fall into that lead to borrowing money. 

When I started my marketing business in 2007, I was intent on never seeking any debt. Unfortunately, I faced three different scenarios that indirectly led to me going into debt. 

The first was the result of not firing an employee when the money was not available to support this person. Three months later I still had to let him go and was left with the debt of his loaned salary from those months. 

The second was the result of working with a consultant far beyond our ability to pay his services. This led to getting behind on payments where we eventually had to part ways and pay the remaining balance over time. 

In the third situation, I ended up in business debt as the result of a project gone terribly wrong. We had to refund most of our client’s payments on the project but didn’t have the money to do it. We paid it over the next two years. 

When I started the company, I thought I could organically grow it avoiding new debt. Unfortunately, I didn’t know there were multiple backdoors for that debt to enter. 

With over twenty thousand loaned dollars in the business we had to take the long road to work it off. Thankfully, we successfully did this and it was empowering to work ourselves out of this hole and accomplish this daunting task. It was the first training step needed to take on the larger task of finishing off our personal student loans. 

The Uncertainty of Freelancing

At the beginning of this year, I had a slight shakeup with my consulting client work (but am grateful it wasn’t as severe as a freelancing friend). One of my clients had a stroke pausing all work. Another temporarily pulled back on the volume of hours. Many of the small little client projects that normally fill in the cracks didn’t play out the way I expected, at first. 

At the beginning of 2015 and 2016, similar shake-ups happened, but to a stronger degree. With such a consistent and strong 2017 and new financial responsibilities (house, minivan, & student loans) on my shoulders, the weight was heavier this time. 

After buying a house, continuing extra student loan payments, and buying a minivan on loan, I must perform at the highest level for the next eighteen months to pay off our student loans and minivan. I don’t have much wiggle room to fail without disrupting this effort. 

The reality is my freelancing work provides more stability than a salary employment income primarily because it's diversified, making it less risky. If an employee loses their job, all their income follows. If I lose a client, only part of my income disappears.

While the uncertainty is a helpful tension for fostering positive forward moving behaviors, it does become tiresome over time. It is this tiring effort that motivates aggressive debt payoff so my work does not feel like something I have to do and is instead something I choose (want) to do. 

With this said, I’m grateful for having a full water tower and decent savings reservoir. It feels like we're not making financial progress because we're paying off debt instead of saving and investing for the future, but we have made significant progress and will continue to do so on the last leg of this debt journey.  

History Makes a Fool of Me 

To some degree, I’ve invited this challenge as we could pay off our student loans slower and we don’t have to pay off our minivan in a year. 

In other cases, unexpected circumstances have pushed in on us. A combination of these recent events including my son’s hospital visit, a personal neck incident, speeding ticket, and some other expenditures added weight to the burden. 

While the uncertainty of what’s ahead can certainly make me anxious, I’m forced to look back over the years since I started freelancing full time in the spring of 2014. God has consistently provided for us. Repeatedly when there are moments of slow or upcoming change, there are new projects around the corner. I’m usually made the fool from worry, when looking back I realize that worry was not needed. 

A Debt Free Future Looks Exciting

I’ve not been debt free since I was eighteen years old. Writing that very sentence has weight. And while we won’t be debt free in eighteen months because of our home loan, it’s quite a milestone for me and my wife. 

While unexpected circumstances or economic downturns could slow down or stop our mission to pay off our student and minivan loans, we’ll continue shaving them down until their done.

I look forward to the day we can say that we live on a small percentage of our income, while the rest is saved, invested and given away. By eliminating debt and increasing my income, this is a realistic medium-term outcome. It’s a definite long-term result, Lord willing. 

One Last Thought: Is Debt Bad?

It's not that we shouldn't ever leverage debt, but it does mean when we do, we know and feel the full weight of the money we’re borrowing and the true financial and emotional cost that comes with it. This will help us determine if we should truly borrow and how we go about doing it. 

This is how we went about buying our slightly used Kia Sedona minivan after our Honda Odyssey transmission went out. I knew the weight of the loan, but we needed a vehicle replacement. This was the best decision in our messy situation. 

But it meant we had to get tighter with our budget and attack the loan aggressively as a way to minimize the burden. With this extra focus on our finances, we can roll these car payments into the student loan when the van is paid off leveraging the debt of our van to more quickly pay off the bigger note. 

We’re sacrificing something I’d like to personally avoid (car loan) for a better long-term benefit. 

Hero Photo by Joshua Newton on Unsplash