I’m not worried about being debt-free

I was reading My Pretty Pennies’ post on her desire to be debt free, and I realized that – despite a fair amount of student loan debt – I really have no burning desire to pay it off.

The balance is right around $15,000 (check my NetWorthIQ if you want specific numbers), and right now its in deferment since I was in grad school. When it starts accruing interest again, the rate will be around 4%. I could certainly get the whole amount paid off in a year if I decided to focus on it, and I have enough in savings to pay off the entire amount today (although not without severely cripppling my savings!).

What’s interesting to me is why it doesn’t bother me. All of my other debts – my credit card debt, my car loan – really bothered me. I tried to get them paid down as soon as possible. Maybe it’s because student loans are considered “good debt,” or maybe the low interest rate is what keeps me yawning when I see the balance. Perhaps it’s just that I know I could pay it off if I wanted to. Or possibly the low monthly payment isn’t enough to bother me.

I’ll probably still pay it off a little early, out of boredom or simply good sense. 4% is better than what my ING account is earning, and it’s sort of miles better than my investments, current run-up notwithstanding.

It’s just, with the focus in the blogosphere on being debt-free, I think it’s weird that I don’t even really blink at 5 figures of debt sitting on my balance sheet.

Do you think I’m weird, or just stupid? Leave your thoughts in the comments!

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16 Responses

  1. I completely agree. When I first graduated, focused on them a bit, because it seemed like the easy answer to “what should I do with all this money I suddenly am bringing in?!?!”

    But the more I learned about PF, the less I cared about my low interest loans. Then I started school, and they are 0%, so… they just fell off the radar and are pretty much in last place of all my priorities.

  2. When I talk about being debt free… I’m not even thinking about student loan debt! Its waaaaaaaaay in the back of my mind, and there is no way I’d lose a wink of sleep from it. My debt elimination is all about credit cards… which unfortunately I used while I was in school to pay for just about everything (but not ALWAYS everything) including books for school! I lose plenty of sleep stressing about it… and will until the balance is gone!

    I think its pretty normal to feel this way… and it seems… like a smarter plan to save money than to stress about throwing every last penny at school debt? Right? I’m with you…. but agree that maybe I don’t know why exactly.

  3. I don’t think about mine either. Every once in a while I will throw a little cash at them if I feel like it, but I have no real plan to focus on them or pay them off any sooner than I have to.

  4. No no, you’re weird. But I think we knew that. 😉 Just kidding, I don’t think it’s actually that weird for you because it’s not a compelling debt. It’s not compounding, it’s in deferment, the rate’s not going to jump (right?), and the only way it cripples your lifestyle is if you DO pay it off in a lump sum. Even at that, it’s just your savings will suffer, not you.

    My experience with the compulsion to pay off debt is that people find their debt has become an insufferable impediment to lifestyle or life choices. That’s really not the case for you.

    So yeah, it’s worth paying them down now because 4% is a great deal more than you can get anywhere else assuredly, but it’s not like the student loan is looming over you, or threatening to break your ankles if you don’t eliminate them immediately.

    I like being debt-free, but it’s because I like the fact I’m not tied to a payment. Still, it’s not like I notice being debt free, it’s just a fact of life. Just like your loans are a small part of your life.

  5. I don’t think it is weird at all.

    Now, I’m anxious about paying off my credit card debt. But the student loan debt is at such a low interest that it doesn’t bother me as much.

    Or maybe, but like a home loan, it is one that you just *accept* should be paid off in a longer period of time.

  6. Ditto. Mine’s sitting at around $29,000 and its kind of liberating knowing I could pay it all off right now (if I really, REALLY wanted to). But with my 2.37% interest (they just lowered it!) its not at all on my radar. In fact, I often forget about it….there are just so many other things I could be doing with my money. It’ll get paid eventually. In 17 years, to be exact.

  7. First off: I don’t think you are weird or stupid at all for thinking this! Sometimes I wish I didn’t care so much about paying off my debt. I guess I view debt–whether it’s student loans, car loans or credit card–as all the same because it’s still money that I owe. Perhaps it’s a pride thing for me, but I hate knowing that I owe anything or anyone money. I look at being debt-free as my first step into becoming financial free… then fully funded emergency fund, etc. etc. I think everyone has a different “first step” and for me getting rid of my small debt just happens to be mine onto that “freedom” path. Not sure if that makes sense but I just thought I’d share that I don’t think you’re stupid and that everyone kind of makes different choices about their student loans differently. 🙂

  8. Heck girl. If I had your cash-ay reserve, I wouldn’t worry about it either. You’re not weird, but even if you were, I’d still like you just fine. 😀

  9. You sounds like you are doing FINE! I don’t stress about my student loans either. $100 comes out of my account every month and I don’t think too hard about it ( it was about 14 k when I graduated with a B.S. , now it’s about 9 k ) . I do HATE having a car payment though and I’m known for my cheap little cars that last! I think it’s the idea that you want YOUR money for YOU. You known that your student loans actually helped you tremendously and they probably don’t bother you because your degree is going to be your best ROI tool yet.

  10. I agree too! I feel the same way about my student loans and my mortgage. Both have low interest rates and I would rather build up my e-fund then worry about getting rid of debt.

  11. i would LOVE to pay of my student loans ( I have about $10,000 left) – but my first priority is my credit card debt. Although I would like to have the student loans paid off, I would rather but my $500 credit card payment into some of my savings funds, to reach those goals before hitting up my loans.

    I think that I really need to reach some of those (like 3 months worth of expenses in my ermg fund) before I could justify putting all my extra funds into my loans.

    so, no your not weird…

  12. For me it was the opposite. The car loan never bothered me that much since I could sell the car and pay it off. But the student loan was just this unsecured looming beast that would never go away unless I kept beating on it.

    Personal finance is all about what makes you feel comfortable.

  13. I have the opposite feeling. I’m 23 and I worry quite a bit about my student loan. Currently I have about $25K ($5K of it in private) and still in school (supply chain mgmt major w/ minor in acct), with a year left. No credit card debt nor car payments and have about $6-7K in savings and about $9-10K in stocks. Am I okay? And I shouldn’t worry too much about my student loan?

  14. […] is to pay off my loans as aggressively as possible. Yeah, yeah. I know. I happen to go against what a lot of bloggers I respect do, and I can’t say that my way is the best way either. They are just student loans (aka […]

  15. […] it to pay off debt. Even though I’m not really worried about that right now, it can’t be a bad thing to pay down the balance a little bit extra here and […]

  16. […] loans I definitely have the cash to pay off my $12,000 in student loans, but for some reason, those loans just don’t bother me. I have over 2 years until I’ve officially failed, though, and I’ll probably pay the […]

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