Travel is, at least for me and many others, about freedom. Debt is literally the antitheses of freedom as it represents bondage, and not just bondage but in many ways the worst kind of bondage, because it is bondage you have chosen to trade your freedom for. Living debt free is one of the most enabling things in the world, and it is quite truly one of the major reasons we are able to do things that others are not.
In these posts and podcasts about how we afford to travel we hope to let you get a glimpse into the practical side of things. It’s great that we can tell you what to see in an amazing place, or that you can see a picture of the yellow van in front of a great landmark, but all of that does not hold much meaning unless you can actually get there yourself.
Why We Do It
Everyone has barriers to doing what they dream about doing, but for far too many people that barrier is debt. We live in a culture encased in debt, no money down and zero % for 24 months allow people to purchase, use, wear out, and throw away stuff long before they pay it off. I think one simple phrase sums this up, “short term gain for long term pain”.
Living in debt means that your money is never really yours because someone else has claim to it as soon as you have earned it. When you live in debt you are trading your future funds for something you want now and agreeing to pay more than the market value for that thing. And unfortunately, unless you are buying a house in a good location, that thing is almost always going down value as you buy it.
The crippling effect of debt is that you can’t make your own decisions because you have traded you freedom to someone else. In order to travel you need to be able to make your own decisions, you need to be able to decided that you want to go somewhere now because there is a great deal on flights or a once in a lifetime opportunity. You can’t do that when you are bound down by debt.
So really I think living debt free and traveling come from the same impulse. The same basic desire for freedom and control of our own path.
How We Do It
Neither Meagan or I have ever had debt. We have basically always agreed that debt would be a bad choice. This comes from the doctrine of our religion, financial literacy taught by our parents, a basic understanding of economics, and hours spent listening to sad people call the Dave Ramsey show.
Student Loans
Although we have three college degrees between us and two more degrees in the works (yeah, we’re weird) we have never taken out student loans, which is almost unheard of in the education climate of today (yeah, we’re weird). We both worked throughout our (long) college years, we went to a school with very low cost, had parents who saved for our undergrad years before it was needed, and maintained high grades to receive scholarships.
Consumer Debt
Of all the dumb things people do going into consumer debt has to be right up there at the top. Meagan and I have never had a credit card (yeah, we’re weird), and it turns out we have a pretty good life. Like most young adults we get credit card applications all the time, and we don’t fill them out, pretty simple actually. It turns out that if you don’t have a credit card you can’t accumulate debt on a credit card, which means you never pay high interest rates.
So how do we buy stuff? Well we have this really novel idea that we should earn money and pay for things with that money after we earn it. So far it is working out pretty well. If right now you are saying to yourself, “but that’s not normal” you are right, we are definitely not aiming for normal.
Car Loans
We have beater cars. Yes we still travel in them. We have never, and never would buy a new car or any car that would require us to take out a loan. Cars always go down in value which means if you have debt on a car you are not only losing out because of interest, but you are losing out as your asset depreciates, essentially you are being hit in two directions.
We would, obviously, love to own a different car than we do. A Volkswagen Van is clearly the dream, but we also like Subaru Outbacks. Someday we will probably own a better car, but we will buy it with cash. Maybe someday we will even own a 1962 Splity with a Westy conversion, but if we do we will pay cash for that too.
Mortgage
We don’t own a home yet. Someday we will (not that I really care, but Meagan likes the idea). It’s unlikely that we will pay cash for our first home, although maybe we will. Homes generally go up in value so they tend to be a good investment. We probably will have to travel less, but not stop, when we are paying off a home.
How You Can Do It
Alright, so now you know that we do it, but how can you do it. The real key is to stop thinking of debt as an option. If you want something and can’t pay for it, then you can’t have it. Take debt off the table. If you are in debt then start working now to get out of it. Follow the debt snowball as taught by Dave Ramsey, and then when the debt is paid off use the snowball to travel!
Student Loans
If you already have student loans then knock them out so you can be free. If you don’t have student loans make smart choices about you education so that you don’t need to. Two things contribute to this more than anything else. First, pick an affordable school. Second, work while you go to school. Working will actually make you a better student in addition to providing you with funds to pay for school.
Consumer Debt
This one is easy. Don’t use credit cards. I know that it is weird for a travel blogger to say that when there are whole travel blogs dedicated to credit card miles hacks, but really just don’t use them. If you have credit cards cut them up and cancel them. When you get an offer for a credit card say no, always, even if there is free pizza.
Similarly don’t do payday loans, I think everybody knows those are a really bad idea (most things advertised on daytime television are) but I figured I would mention it anyway.
Car Loans
If you have a car loan sell the car, even if you love it. Unless you love it more then visiting Venice, or seeing the Grand Canyon, but I’ve done both those things and I can tell you they are better than that car.
Don’t go into debt for cars. If you can’t afford to buy the car, then you can’t buy the car. Wow, that was easy.
Mortgage
If you want to own a home purchase a reasonable home with a limited amount of debt. You can still travel while you pay off your home so long as you can pay your mortgage, and maybe some extra, and still pay cash to travel.
Closing Thoughts
Yes, we are weird. And that is actually the whole point. Didn’t you come here to find out how we can afford to travel because we are weird and travel all the time? So you could not have expected me to be like, “Yeah, we do what everyone else does, but somehow we end up being able to go to way more places,” Obviously not. Most of the common sense that I have shared in this blog post is the same as what is taught by Dave Ramsey and others. Dave has a phrase that I love, “Live like no one else, so that you can live like no one else.” Yes it is weird, and that is the point. If you don’t want to be weird than get used to being like everyone else.
Really travel and freedom just have to be more important to you than having what you want now. It’s a lesson in self control, patience, and sacrifice. How much you spend is a much bigger indicator of your financial stability than how much you make.
I shouldn’t have to say this, but never go into debt for travel. Yes, memories increase in value over time, but only to you. If you go into debt for travel you literally have no asset from that debt at all, it is extremely foolish and short sighted to do so.
In next month’s post about affording to travel I will be going into budgeting which is a key part of the practical way to live debt free.
