Debt free by 33. It Rhymes!
I really think that collecting miles and points and pure finance are closely intertwined. After all, you may get free airline tickets from sign-up bonuses, but you will still need money for some expenses. That money has to come from somewhere. You could jeopardize your family finances if you carry the rest of expenses on a credit card with interest. So you would get into a financial mess as a result of that "free" vacation.
I truly believe debt is evil. My family does all we can to avoid it by choosing to live simply so we can invest in experiences. For example, instead of living in an expensive city such as New York, we chose to live in an area with a low cost of living. This gave us the advantage of being near family and building our house at a reasonable price. This way, we don't have to work ourselves to death just to afford basic things.
It is a matter of personal preference, so I’m not saying everyone should move to our rural town in the middle of nowhere. For one thing, there are very few jobs. There is a reason the cost of living is so low. And I so do love New York City!
I’m also not saying it is wrong somehow to spend money on material things. A few years back, we bought an almost brand-new Ford Mustang for my husband, not the best choice for a family car! But he drives a lot for work and it’s enjoyable to him. Plus, we will keep it for at least 10 years or longer.
So in my book, it was money well spent, even though probably not the most practical purchase. But we did pay cash for it and that’s my point. Just like with this hobby, it’s OK to enjoy things, but be aware of what you are giving up. If you have to work overtime to afford a new gadget or a car, your opportunity cost is your time with your loved ones. And time is the most precious commodity of all.
Not too long ago, we took our savings and paid off our mortgage completely. The interest was low at 2.75 APR, but I just wanted to get it over with. I don’t like to gamble with the market, and the CD rates were paltry. So as of now, we are completely debt free.
Our savings are low at the moment, but if a financial hardship occurs, like the loss of a job, it wouldn't be as devastating to my family. We both could get minimum wage jobs and get by, if needed. That's a nice feeling!