Last week was my 30 birthday and this morning I realized that I am entering my 30s with zero debt. That’s right: no credit cards, no leases, loans, etc. I’m pretty sure that this wouldn’t last for much longer, but it wouldn’t be anything excessive. The only massive debt I plan to go into, is for buying a real estate property with the purpose of investment.
Entering my 30s with zero debt is thanks to my parents.
Not that they were giving me free money or something like that. They gave me something more precious than all of the money they had: a good example. Leading with example, they showed me how they could manage their finances without entering into meaningless debt. I was looking at how they manage their finances, how they spend on things. This helped me to understand the foundational basics of how to be a responsible human being. Responsible for your finances, family, and your future. This was so essential and yet subtle, that I realize it now, years later when I make my own decisions about my own life. The examples they gave me unintentionally helped me to enter my 30s with zero debt.
Not that my parents didn’t finance things – they did, but they financed things that would last. One my father decided to finance a fridge because he felt he might need this cash soon. That fridge still works, almost 20 years later.
Financing furniture, expensive phones, cars, vacations, etc is considered normal here.
Since the standard of living in our country is quite low, buying nice, quality things isn’t that easy. Yet, this is a loophole a lot of people use, but often get dragged into with excess debt. Some people do it because they chose to use their cash for emergencies, others are doing it because of their inflated lifestyle. Inflated lifestyle is probably the thing most people claim not to have while using loans to finance their show-off lives. It’s common here to see people driving a car worth €20k but living in a flat worth €40k. All of that is financed with loans, not with credit cards, as it’s done in other parts of the world.
I’ve bought my first iPhone (8 Plus) 3 years ago, leasing it. It’s cheaper here to renew your telecom subscription plan and buy a new phone. Still, I considered that I don’t want to use my cash for this purchase, so I financed half of the price, which was already 35% discounted because of the contract renewal. Why I did it? I felt anxious pouring that much cash into a smartphone, still, I was certain I would use it at least 3 years. Here we are, 3 years later and I’m soon going to sell it for about half of the price I paid for it. Not that this phone couldn’t last another year – it can, but it will lose far too much of its price. I always knew that entering my 30s with zero debt would mean that I need to make smart decisions about my finances.
Entering my 30s with zero debt is also thanks to my urge to learn and grow.
I always had a passion to learn new things. Finance, physics, science, technology – it doesn’t matter. If I find something interesting and valuable, I’m going to dig deeper and learn about it. It excites me to learn new things in areas where I have zero knowledge. This is what got me interested in finance years ago. Now I learn from books I read, blogs I follow, and various articles I bump into.
I never had a credit card and I barely see a reason to get one.
In our country, there’s rarely a reason to own a credit card. I’ve been offered one from my bank multiple times, but I rejected it, because I don’t need it. Here we don’t have airline miles, cashback isn’t something that would make a difference and I have excess cash at the end of the month. The only real reason I would get a credit card is for vacations and trips outside of our country. Apart from this, there’s no real reason to get one. I know my father has one, he uses it sometimes in his business, but I don’t own a business at this point.