Currently, my Debt has been contained, but the expenses still march on…
Being debt free is great, but now I have to get ready for the 2nd great battle, and that’s the battle against necessary lifetime expenses (food, clothing, utilities, gasoline, taxes, etc).
In this post, I’m just going to talk about a subset of my expenses that I consider are debt-like in nature.
The Expenses below have debt-like properties:
- Taxes (Real Estate, Property, etc): My biggest Debt-like tax expense is Real Estate Tax! Unlike debt, this is an expense that will rise with the appreciation of your house, and any community levies that are passed. Now I know, some of you will say, I can avoid this by Renting, but renting is even more expensive! There isn’t any way to avoid this, so the best you can do is plan around it! Like an oyster, you must build your wealth so that you can coat a smooth layer around this irritation!
- Utilities (Gas, Electric, Sewer, Water, Trash Collection): These are also debt-like, but less so than Taxes. The prices of utilites can do down sometimes, but mostly they go up. Over years, the trend has been an upward slope! You can control the cost of these expenses by conservation or going green. Going Green (solar, wind, etc) may be an options in the future, but currently it’s too expensive.
- Misc: Certain insurance costs, Driver’s licenses, and other little costs that the goverment requires that you pay.
Some lesser debt-like expenses can be reduced to a minimal cost:
- Clothing: the cost associated with this lifetime expense can be minimized by buy cloths at garage sales, thrift shops, goodwill, etc…
- Food: this can be mimized by growing your own food, and possible a small bit of farming…
- Gasoline prices: similar to utilities, the price of gas can go up and down, but over years, has an upward slope. You can control the cost of gas by carpooling, driving less, implementing telecommunting at work, and using public transportation. Walking is an option, but if the distance it too long, then the time factor may be too expensive (life is short).
Initially my plans were to build up investments that I would call “Dividend Funds” and have them pegged to help pay for certain debts and other expenses. However with the threat of increasing taxes on the dividend yields of such financial instruments, I’m starting to re-think this approach.
Readers: Can you think of any addtional expenses that are debt like that I missed?