Living debt-free for the last decade has taught me 4 important things about money

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  • I paid off over $60,000 of debt 10 years ago and the years since have taught me a lot.
  • One big lesson: Automating your finances makes it easier to save, invest, and build wealth.
  • I’ve also learned that credit cards are necessary, and how to keep lifestyle creep in check.
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If you knew me in March 2008 when I graduated law school, I owed you money and I likely slept on your sofa. Despite extensive merit- and need-based scholarships for my undergraduate degree plus going to law school for free in Europe, my debt still topped $60,000, mostly student loans. Paying it off became an all-consuming challenge culminating with the final student loan payment in May 2011. 

As we’re all in a reflective mood with the pandemic anniversary, I decided to sketch out my top lessons from 10 years without debt.  

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1. Automation frees up your energy 

After three years of hyperfocus on getting out of debt quickly, it took me a bit of time to adjust to life after debt. When I was in debt, I automated my finances to ensure everything was paid each month. Automation frees up the emotional energy, willpower, and time it takes to deal with your bills. 

Once I was out of debt, I kept all my finances automated and shifted some of the money that had been going to debt-payoff to investments. Now, my favorite part about automation is that I know wealth is slowly building in the background while I focus on my career and family. 

We’ve automated retirement, short-term savings (sinker/slush fund), longer-term savings/rainy day fund, bills, credit cards, and charitable giving to all come out on their own. In the heavy spending months, we transfer money from the slush fund to cover the overages.

2. You do need credit cards (when you can handle it) 

I followed a very strict plan to get out of debt that included sacrifice, canceling all of my credit cards, and using a combination of cash and debit cards only. It worked. However, after debt, I found that life was difficult without a credit card. 

For example, reserving a rental car ahead of time without a credit card is nearly impossible in some locations. Also, I once flew last-minute to Zurich for work, and my credit card-free life created numerous issues for my client expenses after a colleague fronted my stay. 

As someone who loves travel, credit card points and miles rewards open up a whole new world to you if you can pay your balances each month and play the game. The additional insurances from my cards have also saved me thousands over the years. Because the full balance is paid automatically, I have learned to be responsible.  

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