Why I Hate Debt Pt. 2: Constraints & Creativity
The Jesse Mecham Show
YNAB
4.7 • 1.1K Ratings
🗓️ 16 December 2019
⏱️ 7 minutes
🧾️ Download transcript
Summary
In Part 2 of the Why I Hate Debt miniseries, Jesse explains why debt is a non-negotiable for him, and why is should be for you too.
At 22 years old, trying to finish his Masters degree and expecting his first child, Jesse found himself caught between two non-negotiables: 1.) Living without debt, and 2.) Allowing his wife to quit work to focus on raising their child. The problem? They didn't have enough money to last until Jesse started working his new job after graduation, even living a very frugal existence.
At this point, it would have been so easy to simply sign for a student loan to cover the shortfall. It was only about $7,000. Other students around him were borrowing far more. The interest rates were low, the payback period would be short… debt was the easy way out.
But choosing to borrow would have blinded Jesse to the possibility of another solution, another way to make up the shortfall. The constraints of his non-negotiables led him to start selling his budgeting spreadsheet, which eventually turned into You Need A Budget.
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Transcript
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| 0:00.0 | Hello, Winebbers. My name is Jesse Meekham. This is podcast number four hundred six for |
| 0:08.8 | Wineb, where we teach you four rules to help you stop leaving Paycheck to Paycheck, get out out of debt and save more money. Why I hate debt. Reason |
| 0:17.2 | number two. Number one, last week, takes away your cash so you can't budget it. Rule |
| 0:21.7 | number one is that you give every dollar a job and you can't do that. |
| 0:24.0 | Because debt is taking the dollars. It's horrible to budget when you can't budget all of your money. |
| 0:30.0 | It's just not fun at all. |
| 0:32.0 | This second reason is probably even bigger. I've talked |
| 0:35.8 | about this before with scarcity. Debt kills the idea of scarcity. Debt |
| 0:40.6 | removes for a while constraints that breed the best kind of creativity. |
| 0:48.0 | This hits particularly close to home because I was under the correct but unpopular assumption back my |
| 0:58.0 | let's see 22 year old self I was under the assumption that I would not borrow money for school, that I shouldn't, that it was bad to, and it was a non-negotiable. |
| 1:10.0 | absolute non-negotiable. We would not borrow money for school. We also had another non-negotiable. We would not borrow money for school. We also had another |
| 1:14.6 | non-negotiable. Julie really, I should say, we were expecting our first child. |
| 1:18.8 | And my wife, Julie, she was very, very excited to just focus 100% completely on raising this |
| 1:27.4 | brand new baby, not having to work anymore. |
| 1:30.1 | Also, her job paid very poorly and we were both just all in on that idea and that was what |
| 1:37.3 | we did non-negotiable. |
| 1:39.2 | So we were pitted against two things. |
| 1:41.8 | One is Julie wanted to stay home, be 100% focused on being a mom. |
| 1:47.5 | Number two, we didn't want to borrow money for school. |
| 1:50.4 | We did not have enough money to get through school with Julie leaving her even non-lucrative job. |
| 1:58.0 | So the money she was making wasn't a lot, but it would have let us eke out my master's degree in |
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