If you are pursuing financial independence (FI) you know that debt if not your friend. Debt is owing someone something. In financial terms, it’s typically money. When your goal is financial independence having debt just slows you down. One of the goals to make FI achievable is to eliminate all debt including your mortgage. You do not want to owe anyone anything. Having debt is an anchor just like how it drags a boat.

The math is simple. If you spend more than you bring in, that’s not working towards FI. Your mortgage, car loan, credit card balances, student loans, personal loans, HELOC, or other debts are everything that your money is going towards instead of your investment portfolio, savings, or other money generating resource.

Before I resigned from my job, all my debt was paid off. I knew I wouldn’t have recurring payments and that is a huge relief from that burden. I do have daily living expenses that I do have to pay such as food, gas, insurance, water, electricity, and so on. I made sure that my investments can generate enough to cover my daily living. If I had a mortgage or car loan when I retired early, it would cause me to re-think or push back early retirement because the expense would be too high.

The quicker you clear all your obligations the faster you can build your financial wealth. Turn your money into a tool to generate more money versus constantly paying off bills.

Reduce your spending. That is going to be one of the best behaviors to adopt. One could say, how about if I make more money? Without changing spending behaviors lifestyle creep comes into the picture. Making more money doesn’t necessarily mean you’ll save more. In fact, the other way is very common. The more you make the more you tend to spend.

Don’t have debt lingering over your head. It’s holding you back from your goal of financial independence. The longer you owe money the longer it’ll take you to reach financial independence. Don’t let debt drag you down from your goals! If you are interested in following my journey, email subscribe here to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.