Is it okay to spend money when I still have debt?

Published on Feb 16 2012 // Written By // Credit Cards, Debt

My husband and I have paid off more than $14,000 in debt in the past two years of our marriage. We still have another $20,000 to go in student loans. But we recently decided to upgrade from a small studio loft to a two-bedroom townhome. So I have to ask: Is it okay to spend money when I still have debt?

The extra money will go toward paying the higher rent on our new bigger place.

I believe, like everything else in life, the most important thing is to strike a balance.

We have paid off all our credit card debt and our car loan—all that is left is the student loan debt. It could take us an additional two to three years to pay that off. We are 27 and 29, respectively. Do we really expect to keep living in a 500 sq. ft. guesthouse in someone’s backyard for a few more years while we pay off our student loans?

I think it’s time for us to be adults. We aren’t spending frivolously on unnecessary items such as clothing and electronic gadgets. Moving into a bigger place will cost us more money but it will also drastically improve our quality of life.

It is important to find a balance in life, whether it’s managing money or dieting. You can try your hardest to lose weight but you’ll sabotage your efforts if you keep eating sweets. Similarly, you can try your hardest to save money but if you keep spending it on things you want instead of need, you will sabotage your hard work. It’s important to allow yourself the opportunity to eat sweets, you just need to budget them into your diet. You can also budget in items you want into your spending plan so that you can save up for them and not go crazy simply because you’re trying to pay off debt.

Some people believe there is a difference between bad debt (credit cars, car loans, etc) and good debt (student loans, mortgage). While others believe that debt is debt and you need to pay it all off at the same time.

However, all people are created differently and as long as you have a plan in place to pay off your debt and are working toward that goal, you’re a step in the right direction.

That’s how we feel about our student loan debt. It may take us longer to pay off our debt than others, but we’ve paid off a good chunk and we’re still on our way to becoming debt free.

So is it okay to spend money while I still have debt?

It may not be ideal, but if it’s giving you that extra push you need to keep you on the right path and to keep paying off your debt, it may not be that bad after all.

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About

Erika blogs at Newlyweds on a Budget, covering topics relevant to managing finances for newlyweds and young couples. She focuses on frugal living and trying to live a big life on a small budget.

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