I think most of us would agree that money gives us security. With enough money, you don’t have to fret about the little things, and you can freely make spending decisions. However, more specifically, I believe that being debt-free gives me a heightened sense of security.
Buying a Home
Shortly after I graduated from college, I felt ready to buy a house. I was earning a decent paycheck, I planned stay in the area for the foreseeable future, and I had quite a few friends who were eager to move out of their parents’ basements who could be potential housemates.
So in 2004, a little over a year after I graduated from college, I bought my first home at the age of 23. What could go wrong? I thought I knew everything there was to know about finance. After all, I had graduated with a finance degree in college. In reality, I had no idea what I was doing. I took out what seemed to be a huge, but reasonable, mortgage. Trying to be aggressive, I selected a 15-year mortgage in order to lower the interest rate to 3.5%.
At the time, the real estate market was on fire. I figured that if I didn’t jump in then, I might never be able to afford a house. Looking back now, 2004 was close to the peak of the market. Had I needed to sell the property in 2010, I would have done terribly. Fortunately for me, I didn’t need to sell the house and still live here 13 years later.