Posted on 01/02/2026 8:22:51 PM PST by lightman
In 2026, debt is no longer just a personal finance issue—it’s a defining force shaping household stability, career choices, and even mental health. After years of economic uncertainty, fluctuating interest rates, and the normalization of “buy now, pay later,” many people have grown accustomed to carrying debt as a permanent feature of life. You can even finance Taco Bell.
But that acceptance comes at a cost. Paying off debt in 2026 isn’t about perfection or deprivation; it’s about reclaiming freedom in a world that increasingly profits from keeping people financially stretched.
Debt comes in all shapes and sizes. Medical debt, credit card debt, IRS debt, and student loans often haunt us for decades, but it shouldn't.
First, debt narrows our options. Monthly payments quietly dictate where we can live, what jobs we can take, and how much risk we can afford. A talented worker may stay in an unfulfilling job because student loans loom. A family may delay moving, saving, or starting a business because credit card balances absorb any extra cash. In an economy that values flexibility and adaptability, debt acts like an anchor. Paying it down restores choice—and choice is power.
Second, the cost of debt is higher than it looks. Interest doesn’t just add dollars; it steals time. Money that could compound in savings, education, or entrepreneurship instead compounds for lenders. In 2026, with digital payments making borrowing frictionless, it’s easier than ever to underestimate how quickly balances grow. Paying off debt is a guaranteed return on investment. Few financial decisions offer such a clear, risk-free benefit.
Debt carries an invisible weight on our shoulders and chests that we can’t ignore. It shows up in sleepless nights, strained relationships, and constant background anxiety. Even when finances appear “manageable,” the psychological weight remains. Becoming debt-free doesn’t solve every problem, but it removes one source of pressure. That relief can translate into better focus, healthier decisions, and a greater sense of control over one’s future.
Most people use debt to finance their biggest purchases, such as a house or a car. Financing a home makes sense if it appreciates or provides other benefits, but financing depreciating assets is a dangerous game, especially with new vehicles.
New cars depreciate by about 30 percent over the first two years, according to Kelley Blue Book. Driving a new car off the lot means losing about $24,000 worth of value if you buy a $40,000 vehicle.
Critics argue that debt is a tool—and they’re not wrong. Used carefully, it can enable education, housing, and opportunity. But tools should be used carefully. In recent years, the line between strategic borrowing and habitual dependence has blurred. When debt becomes the default solution rather than a deliberate choice, it stops serving us. Paying it off is not a rejection of modern finance; it’s a reassertion of intentional living within it.
Nearly every business in 2025 sells debt instead of services, from healthcare to mechanics.
Finally, paying off debt in 2026 is an act of resilience. Households with fewer obligations are better equipped to weather layoffs, medical expenses, or sudden changes. Paying off debt means buying back freedom.
In a culture that normalizes owing and spending more than you make, choosing to pay off debt is radical. It’s a vote for independence, clarity, and long-term security. In 2026, that choice matters more than ever.
Debt-free for 5 1/2 years.
Larry Burkett and others offer this excellent advice:
As soon as you pay off one debt, use those freed-up monthly funds to start paying down the next debt.
Good going.
Many people need financial education. Some people never pay off their credit card balances. They make the minimum payment and think they’re doing o k. I’m sure they would be shocked when they would figure out how much interest they’re paying over a period of years by managing their money that way.
I wonder if many people just never learn good financial management from their families. I don’t think they teach this in school, do they?
paid off our house mortgage this past November. 100% debt free is a wonderful blessing.
Congratulations!
November brought your personal “liberation day”!
Thank you sir! :)
Our only debt is our mortgage and that’s going to be paid off pretty soon when we sell. I can’t wait.
I am thankful that I was raised by parents who “saved up” for purchases; never used lay-a-way; and only incurred debt for housing and USED vehicles.
When I applied for my final car loan at a Credit Union with which I’d conduced business for decades the loan officer was astounded that their loan (for the other vehicle) was the only debt.
“Mortgage?” —paid.
“Credit cards?” —all paid within the grace period.
Depends on your income. If you have non-inflationary income, whatever that is, then paying off debt might be easier when the hourly wage is $100 ….
See Mandami for details.
Awesome, good luck to you!
I’m not paying a penny more than the scheduled payments on my 3% mortgage.
And one of the smartest business decisions I made was taking on business debt in late 2021 at very low interest rates to finance capital needs up to 18 months ahead of schedule. I didn’t know that interest rates would rise so much in 2022, but I knew they weren’t going to get any lower than they were in 2021.
Yep.
I thought we were all going to be rolling in the cash with Trump as President, guess not!
Not bragging but when I cam back from Panama, I had $55,000 of credit card debt due to hospital/medical expenses. I looked at debt restructuring and filing for Chapter 7 Bankruptcy. After counseling and prayer, I chose the bankruptcy. Now I am debt free.
I was told that credit card companies bake in a certain percentage of unpaid debt into those high APRs. My bankruptcy attorney said my debt wasn’t even “small potatoes” to them, more like “baby potatoes”. I was always proud of my financial discipline but this was too much to handle in my retirement.
I’m not proud of what I did but I’m willing to accept the consequences of bad credit and I’m thankful the Lord was able to lead me through it. I’ve met a lot of other people who have gone through it and feel no shame.
Remember working on my degree in the 90s where University financial management teachers advocated taking on lots of debt which even the books advocated. Never made sense to me but the teacher demonstrated how well a person could succeed in the financial world by being in debt. Again, the demo did not make goose sense to me nor reading about it.
I am surrounded by people who have made fortunes using debt. I was stupid and carried no debt after near twenty years of running a business. Businesses around me have real property, machinery, business, and employees. I have machines, some business, lost employees thanks to kung flu, and lost my property thanks to eminent domain seizure for a city park. I have an ever increasing rent bill and ever increasing tax burden to show for it.
If I had to do it again. I would take out as much debt and welfare as possible and buy as much stuff as possible for business (or start a refugee NGO). I have seen no one hurt business wise or personal wise by having massive debt. I know I will get slammed here hard but worst business decision I made was following Dave Ramsey’s advice about debt.
Eventually, I reduced it to zero balance with only a recurring monthly charge for daily home delivery of the NY Post newspaper, of which I pay off in full every month.
AMEX responded, at first, by upping my interest rate to a stunning 29% (for no reason)... then when I simply laughed at that, (since I now pay it off full every month), they reduced my credit limit in half (which also affected my FICO score) ... and now it seems they're gonna increase the yearly fee 3x for the *privilege* of carrying an AMEX card ...
..... and so I say to American Express, come February when the new $367 yearly fee comes due for me -- Sayonara AMEX -- it was nice knowing you and being a 'member' for 40+ years, but now you're just another useless money grabbing corporation whose time of prestige has long passed.
The only debt we have is a small mortgage - and I can get a better interest rate on the money than what my mortgage is charging. Paid cash for our last 6 vehicles (after trade-ins).
That’s the way we live and always have. We have always had modest houses and used cars.
(I do have one advantage. Company cars for the last ten years
Our only debt is the house, $1000 a month at 2.3%. We have had a couple small car loans for used cars. We did have one on my wife’s car because we were earning far more with the investment money than we were paying in interest.
Living below your means is great. It allows us to spend money when we want to, not only for needs.
The other night we took ten family members out for dinner and didn’t blink.
Bkmk
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.