I totally agree with you on that. If we rely on willpower to save and invest, we’ll always struggle because it’s so much more fun to spend. Proving your point: I’ve had to automate all my saving/investment transfers for the day after payday so I don’t spend irrationally (or simply forget to move that money into savings!).

Love your point about how becoming debt-free was your catalyst for all kinds of positive financial changes. I hadn’t thought of it like that before.

Thanks for following!

Thanks Michelle. I found your blog through Rockstar Finance and just had to read this article. I understand your viewpoint – basically you advocate investing prior to paying off low-interest debt. Which I agree makes mathematical sense. The problem is that we are not completely rational creatures.

How many people WILL invest the money and not just use this as a rationalization to never pay off their student loans? I mean, if you can’t put away $500 for a new computer, are you going to be investing that money instead? I think its hard to get excited about something intangible until you see results – and becoming debt-free can be (and has been for us) the catalyst to really change habits and make more progress on investing than I could ever dream of when we had a lot of (low interest) debt.

I will follow you!

Thanks for your comment, Samantha. I really appreciate that you took the time to read over my ideas and to write a thoughtful, relevant response 🙂 And you make some great points!

You’re right; I made the assumption that I would keep earning enough income be able to make the $50/month payments on that computer. And that’s not necessarily a safe assumption for everyone. Also, I didn’t realize, until you mentioned it, that it is somewhat paradoxical to take on debt for a computer but not rush to pay more on student loans. I should have been clearer: when talking about the computer debt, I assumed emergency savings was already fully funded, but when talking about paying student loans early, I assumed emergency savings was not yet fully funded, so I was recommending funding emergency savings before paying on low-interest student loans. Thanks so much for pointing that out. I’m going to revise the post this week to clarify that.

And yes, you’re also right about the charitable donations tax deduction. No reason not to use both the mortgage interest exemption and the donations exemption 🙂

Thanks again for starting a conversation, Samantha. I love to see readers expressing differing viewpoints and engaging in real financial dialogues.

Cheers to you!

As for the mortgage deduction – guess what you also get a deduction for? Donations. Wouldn’t you rather be sending $25k to a local charity and saving $7k on taxes, than in interest to a big bank?