I have had numerous discussions about paying off debt; these discussions generally show that people fall into one of two camps. The first camp believes that you should not pay off your house because you could use that money to invest. The other camp (which Dave Ramsey belongs to) argues that if you invest your money instead of paying off your debt (including your lower interest debt such as your house and student loans) after taxes and associated costs you break even; thus you should pay off all of your debt.
I lean to the side of paying off all of your debt including your house. The main reason is because of freedom (also a Dave Ramsey concept). How many people do you know that are stuck working a job they hate because “they have bills to pay”? Are you one of these people? If you did not have debt, your income options would be increased. If there are situations, at work, that you do not agree with, such as something against your morals, principles, or values,(i.e. lying, cheating, stealing, lack of respect, etc.) then it is easier to leave that position. Potential financial disaster is not forcing you to keep that job.
This begs another set of questions: are you just working that job you hate to support your new car, house, boat, etc? Is it worth it to give up your hours just for “things”? Wouldn’t you like to be doing something that has meaning? Wouldn’t you like to come home happy to your family everyday? Do you want to stay home with your children? Do you want to love your work ? Well if you answered “yes” to any of these questions then you have some decisions to make. Essentially, you need to stop buying crap you do not need, get rid of your debt, and look into yourself to figure out what drives you.
I can help you to stop buying crap; read my previous post and ask yourself “does buying this item or paying for this service fit in with my life goals?” This can be asked about anything such as cable, restaurant food, motorcycle, car, house, boat, clothes, a specific college, etc. I want you to understand that I do not mean avoid buying things in the previous list but buying exactly what falls inline with your goals.
Getting out of debt and finding the work you love can be better covered by the following two authors. I have read a lot of information from these two authors and now I am following both of their programs to get what I want out of life. To get out of debt: Dave Ramsey and The Total Money Makeover. To find your calling in life: Dan Miller and 48 Days to the Work You Love . Finally, I am considering putting on the 48Days career workshop online and if you are interested please leave a comment and let me know that you are interested.