A Life Without Debt: Avoiding Obligation

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.

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12 Responses to A Life Without Debt: Avoiding Obligation

  1. AJ says:

    Your whole post is so true. It is terrible the percentage of americans that are in debt including me. I hope we can change this debt ridden society.

  2. JB says:

    Debt is bondage! Credit cards do give you some leverage though if you pay them off before the grace period ends, and you can earn rebates. It’s better to avoid debt and save then you have a surplus which gives you options. Options are nice to have. Obligations of any kind can limit you.

  3. Richby30Retireby40BLOG says:

    I used to be afraid of debt, but now I find debt liberating. Debt helps me allocate capital in more efficient ways. Companies do that with equity and debt, so should we.

    Having debt also keeps me focused on work and not get lazy. It’s too easy to give up early in life.



  4. Scott says:


    You are correct. There is an irrational fear of debt in the personal finance blogging community. When used wisely as a tool it can actually help you as it allows you to leverage your cash on hand to purchase goods or services.

    Is there a cost? Absolutely! It is in the interest you pay on the principal every month. But only you can answer whether that cost is worth it to you.

    Is there a problem with credit card debt in the US, sure there is. But the statistics are misleading. I have a ‘statement balance’ every month in the 4 figures but it gets paid off every month. The stats would have you believe I’m thousands of dollars in debt whereas I’ve chosen to use my CC as my primary purchasing agent and get the rewards while eliminating the risk of carrying cash.

    Let me state this simply: there is nothing inherently wrong with debt! It is all in how it is used.

    Choose your debts wisely and it can be a great tool. Choose your debts poorly and it will make you a fool.

  5. Debt is bondage…unfortunately so is our government from the looks of our headlines this morning. Looks like those of us who work may be taking on a second job to pay for those who choose not to.
    All the more reason to avoid debt….our government is racking it up for us.

  6. I can tell a great discussion is about to kick off here.
    Very few individuals with debt are actually thankful for that debt. Yes, indeed people are thankful for the items attained through debt, but likely not the debt itself.
    Debt does obligate us. Each debt we assume is a commitment to do what someone else requires. We often must give people the right to come and take whatever they want if we do not pay. Personally, I have opted for a debt free life and have absolutely no regrets.
    Debt is bondage.

  7. Scott says:


    I’m thankful for my debts and I’ll tell you why.

    I’m thankful that I was able to get student loans to pay for my BS/MS, I now make far more than I ever would have before in a career I enjoy.

    I’m thankful for the mortgage I have, it has allowed me to purchase a home for the small premium of 4.875% interest. I was never going to save enough cash to purchase a home outright.

    I’m thankful for my first auto loan (now paid off) as I was able to get a new car to retire my old and falling apart college car when I didn’t have tons of cash on hand to purchase it outright.

    As RB said in post 3 – debt can be used as a tool for leverage. If you have a good understanding of debt/equity ratios as well as your cash flows you can use debt as a tool to accomplish goals you otherwise may not be able to accomplish.

    You are correct, debt can limit your options, but so does the false idea that you have to save up the cash to purchase everything!

    I fully support not using debt for consumer purchases, use debt for what businesses would call capital expenditures.

  8. Gail says:

    The problem is that so few people have the self control to use debt wisely, making the descision to use the credit card so that you have a couple of extra weeks to receive interest in your savings account. That being said, even though I like getting the rewards, ets. that you can get with credit cards, I try to use my debit cards for most common purchases such as grocery and gas, and pay more than the minimum on all credit cards. The thought of buying groceries and paying on them for the next year or so is crazy yet that is what some people do. What we have on our credit cards is basically a cheap low interest construction loan spread among several cards for when we were finishing our home (worth several 100K) but cost us around 100K or less as we did the work.

    Business expenses are charged on the cards and paid in full each month as it is difficult to cram money through the telephone wires when ordering supplies.

    The use of credit cards is not inherently bad, it is a problem when people use them to subsidize a lifestyle that they can’t afford. Better to learn to live on what you make or else figure out how to make more than live a better lifestyle while tacking on $500-1000+ more on credit cards each month. People doing that will never get out of debt or have that relieved feeling of not having the weight of crushing debt on their heads.

  9. Linda Hubbard says:

    My only debt is my mortgage and credit card. I pay my credit card off every month. It was recently extremely helpful when I filed a billing dispute against a local gym who was trying to hijack me into a 2 year membership. The card company stepped in to defend me and got all my money back. Had I paid cash up front I never would have seen it again.Debt of this kind can be very useful if you understand how to manage it. I agree with Scott – choose your debt wisely. More parents should be doing this with their children. Maybe then our society can get out of this recurring debt pit.

  10. mousid says:

    Sadie, you sound so much like me! 🙂 I just can’t get used to pulling out my credit cards, even though i now have a couple. That too got forced upon me and i so regret it. I still, however, use public transport and have not been able to save enough money to buy a car. The problem is, money, if it’s there, just doesn’t stay with me. Sometimes, i think i would have been better off leasing one. But i don’t think i would have been able to live through the entire leasing period because of stress.

  11. wandaa says:

    Great post!
    I can’t even stand having my time alloted let alone be in debt and have creditors make me dance to their tune.

    I’m annoyed if I have a doctor’s appointment but know it’s something that must be done for my good.

    I avoid debt like the plague. There is no gadget/trinket/clothing worth the price of your own personal freedom and no one making demands on it.

  12. wandaa says:

    “Scott: I have a

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