Debt Free America

How would you paint a picture of a debt free America? It’s an interesting question in these troubling times. Where would you be without debt, where would the country be without debt?

As I am writing this article it is election day. Nov. 4, 2008. It is, without question, a historical election. And while I try to keep these pages upbeat I find that I am in a very reflective mood. Much of the election issues are based around the economy, and rightfully so. Even issues such as the war, education, health care, immigration, large/small govt. have a huge impact on the economy.

If we were a debt free America how would these issues be different? Maybe as individuals if we had no debt than we could afford our own health care and not need the government to jump in. If we were a debt free America in the government our Social Security problem could be resolved much easier.

Some would argue that a debt free America is a complicated issue. In some ways debt makes our economy go round. Both for individuals as well as the government I think it can be a simple issue. Economic hardships would have a much smaller effect on us if we live within our means. However we are now in a position where the government just spent at least $700 billion it doesn’t have. Although some estimate the actual cost to be much higher.

What kind of message does that send American children? When parents and government cannot control their spending because they have to keep up appearances. It is time we become a debt free America. This applies to individuals, businesses, and government.

So what can we do about it? Well I am not a politician. And while I am an informed voter, I cannot control the government debt. But I can control my own debt and I can give advice to friends about self reliance. So here’s my plug for a debt free America. Don’t worry about the Jones.’ We worry too much about what other people think when in reality they don’t care. Our homes are a big area of financial drain.

While a new family needs to use a loan in order to purchase a home 2 things should be done.

1. Purchase a small home that meets your needs. Much of this financial crisis is due to people overextending themselves with their mortgages. While it is nice to place blame on the lending institutions or poor government regulation (and maybe some of it does belong there), we cannot ignore the responsibility of each individual or family to sit down and go over finances, and figure out how exactly how they are going to pay this debt off.

2. Pay it off as soon as possible! For years the story is to keep your mortgage for the tax write off, but where will that get you today? If you lose your job, right into foreclosure. Part of paying off your mortgage early is to get a loan originally that is less than the max you can afford, that way you will have extra money to put toward that mortgage.

Instead people are getting debt consolidation mortgages to max out all their credit and use up the equity in their homes. What a sad state indeed! Then how many of us fill our homes with brand new flat panel TV’s? The latest furniture style? The list could go on. And if you enjoy having these things fine. But get out of debt first. Because if you are in debt for them they are not really yours. And the money you are paying in interest is just rent on that lifestyle.

My point is simply this if we delay what we want now (the biggest house) for what we really need (a 3 bed/2 ba in a nice neighborhood). And pay off debt as soon as possible then we can have those luxuries later without debt. If we all did that we truly would be the richest and most prosperous country in the world! Be A Debt Free America

"A man in debt is so far a slave,"
Ralph Waldo Emerson.

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