Fear of Paying Off Debt

A common occurrence that I have run in to with people I know personally and some of the people I have mentored is having enough money in savings to pay off their debt, but afraid to let go of the money from their bank account to do it. These are people who are on good financial footing otherwise.

Did you know that our brains are wired to expect the worst? It’s an innate and primal self-preservation mechanism that still exists within us, even in the modern world where our risk of being eaten by a sabertooth tiger or killed by a rival tribesman are no longer existent. When we are presented with an unknown our brains automatically go to the worse possible scenario and we create a story to talk ourselves out of whatever it is as a way to keep us safe.

Basically, our brains are drawn to drama.

So when presented with the unknown of letting a chunk of tangible money go toward something that doesn’t result in an immediate tangible return, that self-preservation mechanism kicks in. “What if I pay it and then…”:

  • “I lose my job the next day?”

  • “I get hit by a bus?”

  • “I have a bad month?”

  • “There’s an emergency?”

Sound familiar? The odds that the above will happen are very slim. And the chances of those happening don’t magically increase by you paying off your debt. That’s just the story that your primal brain is creating to protect you. And if you happen to be the unluckiest person alive and something does happen immediately after you pay off your debt before you can fully fund your emergency fund, then you always have the option of taking on new debt if you need to. You were already doing it before, after all.

Now if my logical reasoning wasn’t enough, check out the attached visuals of the impact of compounding interest. This is my current mortgage balance at an interest rate of 3.65% with 24 years left.

1) How much interest I would pay and time it would take with no extra payments.

2) $200 extra/mo.

3) $500 extra/mo.

4) $1000 extra/mo.

5) My total payment broken down by principal, interest, & taxes.

6) The bank getting rich off of interest payments represented by a man lighting a cigar with your $100 bill.


So if you have debt hanging around that you can easily pay off today, go for it and pay it off!

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