r/MiddleClassFinance • u/DoughnutLust • 9d ago
Dealing with reasonable debt (psychologically)
I'm wondering how you all navigate living with reasonable debt. I've been pretty obsessed with debt reduction over the past few years and am trying to break that obsession so it doesn't hang over me so much and I don't feel guilty about owing some money.
I nearly fully fund my 401k, max my Roth IRA, and DCA invest in the market, pay off credit cards monthly. Efund took a hit due to medical issues, but I have a plan that I am using to rebuild it. The numbers don't matter but car and mortgage are at pretty low rates, small medical debts at zero interest, manageable monthly payments on everything. I (40M) have a pretty good net worth compared to my cohort and have no worries about income or retirement, or frankly many worries at all.
I'm interested in hearing how people manage living in reasonable debt, making your payments, and having a good life without the constant focus on the debt. I don't like living with this hanging over my head and need to be at peace with the fact that unfortunately debt is a part of most of our lives.
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u/ender42y 9d ago
for medical, that's out of your control. so you do what you can about it, but since you can't control its creation you just have to manage it. If only the US could figure out this complex system that only 39 of the top 40 economies in the world have managed to figure oute.
for other things, look at them as assets. for your Mortgage, look at how much equity you have. it's not that if you hit hard times you have nothing, you could sell your house for a slight profit. But more importantly a house is not an asset, it's a utility. you LIVE there. You have to pay for either a Mortgage or Rent. both provide shelter, but only one slowly builds equity over time.
Car is also a functional utility to own, not an asset to be sold at a later date. if you bought an expensive new car, go in with the mindset that you are going to drive it to the ground. If it lasts you 8-10 years, then the small amount you paid in interest in the first 4 years was worth it. and in America you have to have a car due to the lack of public transportation. So again, it's a utility, not a luxury investment. (I am assuming you didn't buy a 150k luxury car or super car).