Flickr photo by aloshbennett.

As I ran my fingers through each piece of computerised printout (that needs no signature) that had accumulated into my cupboard, the dusty pieces of dated bank statements and CPF notices flicked up the dust and made me sneeze.

One of them caught my attention as it pointed to my oustanding loan amount of $xx,xxx as at certain date 3 years in the past. The tendrils of my brain started to reach out back to that day, when I still owed the bank this $xx,xxx where I was so close yet so far from truly owning the roof over my head.

I can still recall the feeling like it was yesterday. The mix of fear, uncertainty and doubt as each day was filled with dread in having to wake-up to work in an environment with hostile bosses and clueless colleagues. Seeing one by one of the younger staff leave for greener pastures as they just did not enjoy working in that type of work situation even though the remuneration was decent.

When you are under debt, even if it is your housing loan which some personal finance pundits say is “good debt”, you are still a servant to the debt.

Today’s post takes a break from the series on Dissecting Dave Ramsey’s “Total Money Makeover”. A sprinkling of personal anecdotes helps give some variety to the posts here on fivecentstencents.com.

How do you feel when you are under debt?

It’s hard to find people without debt. Even as I have paid off my housing loan for my humble home, I still owe the bank some monies in my car loan. However, this is a easier burden to carry as my net assets are worth considerably more than the amount owed to the bank for my car.

I still recall three years ago, I had made significant improvement to my net worth as I had systematically paid off my loans aggressively by doing capital pre-payments when I received windfall capital gains or bonuses from salary. However, I was still at a stage where technically my home was not mine really as it was under a lien to the bank. I still feared losing my job because my ability to pay the loan depends largely on employment income and employer’s CPF contributions from which the mortgage deductions were made . Even though I have an employable CV as a CPA with a university degree and relevant years of experience to back it up, the irrational fear of being out of work and having negative net worth still weighed on my mind on some days when work sucked more powerfully than a Dyson vacuum cleaner.

The feeling is something I can almost taste when I think back of the past when I was at the receiving end of abusive bosses, punishing work schedules and unfulfilled career.

What has changed since that three years?

For one thing, I managed to clear my housing loan. It is literally, my single most satisfying accomplishment second to the birth of my daughter. It is a milestone that allows me to know that the days of scrimping, saving and frugality has paid off. I still continue to scrimp, to save and to be frugal because I realised that the journey of a simple life materially makes for a rich life spiritually as I seek fulfillment beyond materialism.

I am now more relaxed at work. Bosses can still be abusive, work schedules vary and would start to get a bit busier but my state of mind is different. The feeling of lightness because the burden of my housing loan is gone. My home is truly mine to live in, to enjoy and to bequeath to my daughter and spouse should  anything happen to me.

Some forummers or other personal finance enthusiasts I meet disagree with me and would rather let their housing loan stretch. Some argue that the 2.6% HDB loan is hard to beat and you can borrow to invest at higher returns. Some people believe that the future is uncertain and since they have mortgage insurance, why not release more cash for spending now by taking their 30 years to pay off the subsidised HDB loan. If anything happens to them, they or their beneficiaries get a “free” HDB apartment.

Fair enough.

I enjoy the bearable lightness of being. The being that involves owning my own home and working towards my retirement instead of working to see my retirement savings locked up in property that makes it difficult to monetise if I intend to retire.

Be well and prosper.