What Debt Teaches Us

We’ve been tracking our net worth closely for the last few years. In fact, we’ve gone back and tracked it since our earliest loans in the fall of 2005. We’re diligent about it to ensure we stay on course as best we can.

When times are hard and we aren’t able to make as much progress as we’d like in a given month, we take a second to evaluate the big picture. When we see this, it reminds us that we’re trending in the right direction:


We’ve made meaningful progress in the past three years, and it’s exciting to think what we can accomplish in the next three and beyond.

Why Share Your Net Worth?

One might question why we’d make public the fact that we owe so much. Why we would want to draw attention to the fact that we were crazy enough to get into this much debt. After all, having hundreds of thousands of dollars in student loan debt isn’t much fun. Knowing that it will be years before we’ve paid it all back is even less. We actively searched for others in a similar situation (and ran across others searching as well) to share their strategies, but didn’t have much luck finding anyone we could truly relate to. For this reason, we have decided to share our journey in the hope that it may help someone else.

What Debt Teaches Us

The good news for us is that with this debt comes valuable learning opportunities. It teaches us how to manage our finances. It teaches us how to prioritize what’s really important.

It teaches us how to be rich.

We truly believe that our financial future is brighter now having been in our situation than if we had the good fortune of starting our careers without student loan debt.  Really.

While in college, and making the intentional decision to get into this hole, it forced us to take a strong interest in, and seek out, personal finance education.

Had we not been in debt, we’d probably have taken a more cavalier approach to savings, investing, and our drive toward financial security. Sure, we probably would have maxed out our 401k and we’d have some level of savings. We probably even would have retired comfortably someday.

But. . .

We very well may have spent our lives chasing what we were ‘supposed’ to have. What we ‘deserved’ to have. In that life, the house we lived in would have been bigger. The car we drove would probably have been newer.

The slope of the line on the plot above would have been flatter.

This would have inevitably delayed our ability to reach financial independence by needing to support a higher level of spending.

Avoiding Lifestyle Inflation

Having a large percentage of our take-home pay taken off the top for student loan payments limits our day-to-day spending. Given that it will take on the order of years to pay these loans off, by the time balances hit zero and our cash flow improves we’ll have grown accustomed to living on much less than we earn. We won’t magically need a bigger house, nicer clothes, or newer better ‘things.’

That ‘extra’ money will just be transferred from one type of payment to another.

We’ll use it to pay for our financial freedom.

One thought on “What Debt Teaches Us

  1. “Lifestyle inflation” is a key problem facing all professionals and is little discussed. You hit the mark.

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