First Person: Why I Never Borrow Money

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Like many 20-somethings, I made a lot of financial mistakes before I finally grew up. Nearly every dollar I spent through eight years of college and law school was borrowed before I actually earned the money to pay for it. Between student loans and credit cards, I graduated with significant debt. And the crushing weight of that debt is why I never borrow money now.

Debt Leads to Depression

This is not a scientific fact that I've verified, but rather a conclusion I drew after crawling out of debt for more than 10 years. Every time a bill arrived in the mail or someone called to ask why a payment was late, I grew more withdrawn and disheartened. I felt like a tire with a slow leak, and I often wondered if it would ever end. To borrow money is to impose upon yourself an unnecessary burden—both financially and emotionally.

Debt Becomes a Habit

Safe within the comfortable bubble of college, the real world never intruded to remind me that borrowing money would one day lead to consequences. It was painfully easy to pull out my credit card to make a purchase or to apply for yet another student loan. The money I earned went directly to pay for the debt I had incurred, though it was never sufficient to cover all of it. It became a habit for me to use my income to pay off debt rather than to fund the necessities of life.

Debt Provides False Security

Because I knew that I had a credit card to pay for the things I wanted, there was no reason for me to stay in my dorm or apartment rather than go out with friends or to put off a purchase until I had saved the money to buy it. During those years in school, I never felt financially strapped. Then, upon graduation, the money I'd borrowed became an albatross I thought I'd never shake.

Debt Creates Stress

This seems like a given, especially if you've ever accumulated a massive amount of debt, but when you borrow money, stress is a constant companion. For years, I lived in fear of losing my home and everything else. I worried about whether I'd be able to cover utilities after paying on my debts, and I was always looking for ways to make a few extra dollars. It's no way to live.

Saving is Rewarding

Now, when I want to buy something expensive, I save my money. My wife and I have a separate savings account that is devoted to vacations, electronics, conferences, and anything else we want to do. We don't borrow money to obtain the things we desire; we save for them until we can afford them. And it's far more satisfying than if we just plunked down our credit cards.

Saving Makes You Think

When I was borrowing money hand over fist, my purchases were never carefully considered. I took the caveman approach to spending money: Want, Find, Buy. Now that I never borrow money, every purchase gets run through my mind many times during a period of weeks or months. Often I decide it isn't worth the effort, and my money goes toward more worthy purchases.

There Are Exceptions

What if my child needed an expensive medical procedure for which I didn't have the cash? I'd borrow money. What if my car broke down and I didn't have the money to fix it? I'd probably borrow money.

There are exceptions to every rule. But my goal is to continue saving money until I've stowed enough cash in the bank to wipe out all those exceptions. In my opinion, there is no greater security on earth than the knowledge that I don't have to borrow money, ever, to take care of my family.

More from this Contributor:

Dealing with Sudden Debt

Prioritizing Debt: Which Bills to Pay First

Tips for Living Debt Free as a Renter

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