Author Topic: I'm working on paying off my future spending debt.  (Read 3972 times)

Sir Sideburns 'Stash-a-lot

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I'm working on paying off my future spending debt.
« on: July 16, 2013, 07:48:41 AM »
Conventionally, we view paying off our debts as catching up on our prior spending.  Whether it be student loan debt, credit card debt, fancy car debt, or whatever, we're making amends for financial transactions of the past.  MMM has rightly defined such debt as an emergency and encouraged readers to regard it as such, often suggesting "drastic" changes in order to deal with the emergency as quickly as possible.

I rather like the idea of applying that emergency mentality to my current and especially my future spending.  Being indebted to my future spending is absolutely an emergency; every day until I fully pay down the debt, I'm compromising my integrity by making choices with how I spend my time that I wouldn't make if I were debt free.  The greatest risk of all is that I'm mis-living in the meantime.  I can think of no greater emergency.

superheropunk

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Re: I'm working on paying off my future spending debt.
« Reply #1 on: July 16, 2013, 01:27:09 PM »
Isn't that just saving a pile of cash or a rather large emergency fund to avoid any indebtedness?

Sir Sideburns 'Stash-a-lot

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Re: I'm working on paying off my future spending debt.
« Reply #2 on: July 16, 2013, 10:13:39 PM »
I'm just saying that the 'stash needed for financial independence can be thought of as debt if you want to give yourself a kick in the pants.

steveo

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Re: I'm working on paying off my future spending debt.
« Reply #3 on: July 17, 2013, 12:39:03 AM »
I like that approach. It is really stating - listen I'll be spending a bunch of money in the future and I'd better start stashing money away in order to finance that spending.

arebelspy

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Re: I'm working on paying off my future spending debt.
« Reply #4 on: July 17, 2013, 12:43:56 AM »
User "Sol" on these forums expressed that idea maybe a year or so ago, and I liked it so much I copied it to my "Good Quotes" file.

Here is how he phrased it:
Quote
Personally, I consider myself "in the red" because I don't yet have enough assets to support my current lifestyle without working.  I'm living on borrowed time, because my current consumption obligates me to continue working and saving to grow my stash.  I won't think of myself as "out of debt" until I'm financially independent, because until then I'm borrowing from my own future.

I particularly like that last sentence, it is quite an elegant way to express this idea, IMO.
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Ishmael

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Re: I'm working on paying off my future spending debt.
« Reply #5 on: July 17, 2013, 10:23:50 AM »
I'm using exactly that technique for my house. I'm renovating it myself, so I struggled between spending money on building materials, or paying down the principal on my HELOC.

Eventually, I just decided to estimate the cost for materials for all the remaining work, add that to my HELOC amount and declare that as my house debt amount. The only difference is that I don't pay interest on some of it. Now, I see my house debt load go down every month if I pay down principal or buy some building materials.

It seems silly, but it really made a big psychological difference for me.

tooqk4u22

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Re: I'm working on paying off my future spending debt.
« Reply #6 on: July 17, 2013, 10:44:27 AM »
Isn't that just saving a pile of cash or a rather large emergency fund to avoid any indebtedness?

No, what he is saying, which Arebelspy supported, is consistent with Pension accounting - anything less than is need to fund current and future retirees is considered a liability. Although many of the pensions use some fairly liberal and borderline negligent assumptions, but that is a different topic.

ChoicesChoices

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Re: I'm working on paying off my future spending debt.
« Reply #7 on: July 17, 2013, 10:54:29 AM »
SirSS and ARS (and Sol): thank you!  I'm taking that quote and plastering it on my wall!  While I'm nearing FI, there is a twinge of regret that I didn't "get it" sooner and a passion for trying to help my kids get it as soon as possible.

Reading that quote over and over.  REALLY like it.

anastrophe

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Re: I'm working on paying off my future spending debt.
« Reply #8 on: July 18, 2013, 07:07:30 AM »
I like this.

So, all future expenses are today's debts, right? When I decided to have a wedding, I estimated how much it would cost, and then I started thinking of it as "the wedding debt," even though technically I was not in debt for it and it was a future event. But I also think about next year's groceries and rent that way too. I might not prepay my rent because that's risky, but buying bulk foods might count...I have to think about this some more.