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It's hard to put a positive spin on debt, but let me try:

My wife and I both had a heap of credit card debt when we got out of college. Our combined CC debt once we were married was $30,000! We consolidated it with a low interest consumer loan - and in the years since then we've paid off our CC bill in full every month.

Let me tell you, though, the monthly payment on the consumer loan really put a dent in our budget! It was at a far lower rate than the CCs, but the minimum payment was much higher (a fixed 5-year loan vs. the 2% minimum payment most cards require).

Not only that, the loan hurt our ability to get a mortgage. We got a substantially smaller house (with a smaller mortgage payment) than most people at our income level - because that was all we qualified for.

So how is this good? Well, we learned how to minimize our expenses. Now, when another loan gets paid off (car loans, student loans, consumer loan, etc.), the monthly payment starts going to our brokerage account instead of our creditors. When an extra $100/month or so frees up, it goes right into savings. It's not really a sacrifice since we've already learned to get by without it.

Several years of tightening our belt due to debt has taught us how to live below our means now that we're getting out of debt.

1. To reduce expenses, we had to cancel our cable TV and use an old-fashioned antenna. Well, today we can afford cable - but we've learned to live without it (we go to Blockbuster instead). Savings of $30 month.

2. If we didn't have so much debt when we got our mortgage, we probably would have gotten a house that was bigger than we really needed. Savings of several hundred dollars of interest each month.

3. We cut down eating out from 4 nights a week to 1 in order to save money. We could afford 4 nights a week now if we wanted to, be we got out of the habit. Savings of $300 a month. Actually, it's more since I started packing my lunch for work instead of hitting the cafeteria.

The list goes on an on.

The point is, as our discretionary money increases, our expenses don't. Okay, okay, expenses increase a little (hey, we want a treat once in a while! :) ) Because we used to make whopping debt payments, we're now able to saving whopping amounts of money each month.

So, my best unsolicited advice is: Once you're out of debt, don't treat it as a windfall and start spending all that money that gets freed up. Treat yourself a little, but take advantage of the discipline you were forced to learn.

Best of luck,
Mike
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