The dictionary defines obligation as, “To bind or compel someone.” It just sounds unpleasant, doesn’t it? Who wants to be bound and compelled to do things? Isn’t it much nicer to be free to choose your own path? I’ve always thought so. I try to shun obligations whenever possible, beyond the obligations I have to my family. I don’t like feeling like I’m being forced to do something that I find unpleasant or giving someone else control over my life. Avoiding that feeling is a big part of the reason I work so hard to remain debt free.
Debt is an obligation, although most people (whether through denial or ignorance) don’t see it that way. Once you take on that debt, you are bound and compelled to pay it off. If you don’t there will be unpleasant consequences. You may lose your house or your car, or you may be sued. Taking on debt also gives the lender control over your life. When you take their money, you dance to their tune. If they want to jack up your interest rate, they can. If they want to call in the debt and make you pay right then, they can. If you miss a payment, even if you simply forgot, they can penalize you in almost any manner they see fit. It’s an ugly game, as many are learning these days.
When you have debt, you are obligated to act in accordance with what the lender wants. You don’t get to do what you want. If they jack up your rate and double your minimum payments, you may have to go get a second job to make those payments even if you’d prefer to only work one job. If they call in the note, you have to come up with that money, even if it means taking money from investments allocated for other purposes. Lenders even dictate what kind of insurance you must carry and they decide (by default because you need to pay off the loan) what the selling price of your item must be. Just having to make the payments at all means that you don’t get to do what you want to with all of your money. If you want to take a vacation, invest, or buy new furniture, you may not be able to do so because you need the money to make those debt payments. Debt takes away your choices and gives the lenders control over your life. You are, in other words, obligated (bound and compelled, remember) by the lender.
This is why I avoid debt. I don’t like someone else telling me what I can and cannot do with my money. I prefer to save and spend in accordance with my wishes and values than to play a game where the rules can change and, as a result, change my life on a whim. I like to do what I want. Feeling bound and compelled to act as a lender requires me to makes me very uncomfortable. I don’t like ceding that kind of control over my life to a third party. If I work a second job, it will be because I want to earn more money or I enjoy the work. Not because some lender forces me into it. If I carry a low deductible insurance policy and pay the higher premium associated with it, it will be because I want to, not because a lender says I must. If I want to go on vacation or invest $1,000, I can do that because I don’t have a lender breathing down my neck demanding that I give them that money. By avoiding debt, I retain control over my life, at least the financial aspects.
Most obligations aren’t pleasant. That’s why the very definition of the word sounds so unappealing. There are some obligations in life that we can’t escape (and shouldn’t want to) such as our obligations to our families and children. They may be unpleasant at times, but the long term rewards of meeting those obligations are great. But when an obligation is optional and comes with no reward, such as debt (or hosting a party you don’t want to host but you let yourself get talked into anyway), I greatly prefer to avoid it. I prefer to retain control over my life and that means not borrowing money and putting myself under obligation to a lender.