A Life Without Debt: They Can

I know someone who was recently visited by the repo man. He lost his job several months ago and hasn’t been able to find work that pays anything close to what he needs to pay his bills. He’s in pretty serious debt, having bought two cars, a house, and a lot of “stuff” that he really couldn’t afford when he was employed. Now that he is behind on his payments, everything from cars to furniture to stereo equipment is falling victim to the repo man. It won’t be long before the house goes, too, if something doesn’t change soon. It’s sad to see, but as I watched the repo guy haul away this person’s car, I couldn’t help but think of the title of that old song, “They can’t take that away from me.”

One of the biggest benefits of being debt free is that, when I look around my house, I see things that I own. I own all of my furniture and electronics. I own all of my books, clothes, appliances, and tools. I own my cars outright. I even own my home since the mortgage was paid off a few years ago. Nothing is financed, therefore no one has a claim to anything here. If disaster strikes tomorrow and I lose my job and have to plow through all of my savings, I don’t have to worry about someone coming to take my things away. As long as I can make enough to pay the property taxes on my cars and home, I can keep everything I have. It’s a good feeling.

The other benefit to owning everything outright is that my stuff is mine to do with as I choose. If I need to sell my car or house to generate some cash, I can do that without fear of being “upside down” or “underwater” on a loan balance that is higher than the worth of the item. When I choose car and home insurance, I don’t have to abide by what the bank wants me to carry to cover its losses, I can opt for much higher deductibles that I am willing to cover and save money on my insurance premiums. I can take my car to Mexico or Canada without a second thought, something a lot of loan companies will not allow you to do for fear of damage to their collateral. If I want to sell something like furniture, I don’t have to worry about continuing to pay the credit card company for it even after it’s gone. I can sell it and pocket the profits without worrying about using the money to pay down a debt. Everything I own is an asset that can be sold at any time in order to raise funds, should I need them.

It’s liberating to look around your home and see nothing that can be taken away from you. It’s a big weight off your shoulders, particularly in tough times or when you’re worried about losing a job. I never look around and think, “What if I can’t make the payments and they take it away? How will I live?”

Owning your things outright gives you tremendous freedom to do as you please. If you need to move in a hurry, you only have to worry about getting a fair price for your house, not getting enough to cover an outrageous loan balance. Same with cars or any other thing you own. If you want to buy something new, you can sell the old things without checking with a bank first or worrying about continuing to pay for both the new and the old items. You just sell the old thing, take the money you get from it, and go buy the new thing. You also have the freedom to give things away, if you so choose. A paid for car or furniture can be donated to a charitable organization and taken as a tax deduction. When you own things outright, you have the freedom to decide how they are used, sold or donated and no one can take them away or tell you what to do with them. I hear the old song in my head, now. “Oh, no, they can’t take that away from me.”