Monday, January 18, 2021

Debt-free!

I remember the day I signed the papers to my first home. It was a day after my thirty-eighth birthday. As I signed the documents, I felt no joy. I was awash with confusion and dread. I have seen (on social media) people proudly sharing pictures of their new homes, throwing housewarming parties, smiling into the camera, a dream-like depiction of life that social media paints. Yet, I felt nothing but discomfort, like a sharp pain in the chest that shoots up every time you take a deep breath, the kind of claustrophobia you feel every time you are in the dressing room trying on clothes two sizes smaller.

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As intuitive as it is in hindsight, it looks like I hadn’t done my math well. The dreamy pictures were mostly from people I knew in the US who pay way less interest rates on house mortgages than people in India do. At close to 8.75% compound interest, the numbers had really added up. I could see the dissonance between romanticizing the idea of owning something and the burden of owning it for real. Despite everything that people told me (this is a great investment, you will be getting tax breaks, etc.), I saw this as bondage. I had just started a new job, and with a mortgage to pay for the next two decades, I would not be able to take risks, change jobs or professions if I wanted to, or take a gap year to try something new without keeping my loan in mind.

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I had no problem in getting a loan. The reputation of my employer helped, and the wiry thin bank manager was happy to have fulfilled his own quarterly target of finding people who needed bank loans. The more he grinned and asked me if I wanted tea, the more irritated I felt. The only thing I could do now was, no, not live with the discomfort of wearing smaller clothes for the next twenty years, but to pay off the loan as soon as possible. And for that, I needed a plan.

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I was able to pay off that loan in 2020, finally, in about 14 months. It did not go well with the bank manager and he almost threw a tantrum, borderline misbehaving. His fake grin had vanished and this time, there was no offer for tea.

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There were a few things I learnt in this process of what I call, intentionally managing my money. The income was constant, so I did not have a lot of leeway there. However, the spending was something I intentionally controlled. I did not turn into a penny-pincher, I just got more intentional about where my money goes.

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For one, I had some savings already, but the interest it was getting me was way less than the interest I was paying on my loan. So I reshuffled some of my savings and put it towards my loan repayment. That was simple. I also spent a month minutely tracking down every expense I made. I already knew where most of my money goes, but putting it on paper made the process more visual (I can only act on things I see and not things that are in my head). I realized that fulfilling a goal became easier when it fed into other related or unrelated goals I had. I was already working on a few other things like getting tenure, losing weight, and reducing the noise in my life, the kind that had created dissonance for a while. All of these nicely fed into each other.

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For example, I love traveling, but I mindfully decided to only see places I would be visiting for work. This would cover a large proportion of my travel expenses, and conversely, I would be motivated to seek out work that required me to travel. And I did travel. From a conference in Canada to another one in the US, from a travel award that took me to Germany and work trips to Kolkata, Delhi, Mumbai, Bangalore, Hyderabad, Goa, and Rajasthan, I traveled to my heart’s content. Since last year, I don’t remember paying for a single trip, not even my flights to visit my family.

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I also became more intentional about what I did with my leisure time. I did not have to visit every party I was invited to, especially if they were large and impersonal. I did not have to say yes every time someone wanted to dine out. I intentionally declined attending parties I did not feel like, especially the ones at night (I do not feel very hungry after 7 pm and most parties start at 8 pm). I said no to weddings, these were people I barely knew (I think even they were counting on me to bail out). COVID-19 helped immensely to reset my social life. All the parties and eating outside stopped. I re-learnt to cook and eat at home every day, something that worked wonders for my physical, mental, and financial health. With the newfound free time, I read, watched interesting videos, developed interesting courses, had interesting conversations, and thought of interesting research ideas.

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I also became more mindful of the resources already available to me. If I wanted to read a book, I’d ask the library to buy it for me. In the US, I regularly hung out at Starbucks, eating and drinking things high on calories. Every time I was at an airport, the smell of coffee lured me into lining up for my favorite iced mocha or Caramel Frappuccino with whipped cream. I barely drink coffee now, but if I am craving it, the faculty lounge has an impressive collection of tea and coffee. I have no paid subscriptions to entertainment channels like Netflix, I stick to YouTube. It is free, doesn’t have everything I want to watch (which keeps me intentional about what I watch) and I have found tons of amazing stuff on YouTube including videos on how to save money. A book, a cup of coffee and a movie here and there is not a lot; I can afford it all, but why do it if you don’t have to?

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I go to very few parties, those that are small and I know I will love. This gives me more time to do the things I like. I have never had domestic help, which is unusual in India. An average colleague of mine has a cook, a gardener, a driver, and a couple of people to do domestic chores. Instead of paying the domestic help to clean my home and then pay for a gym membership (which I do not enjoy going to), I clean my own home. From dusting to mopping to drying clothes, cutting vegetables, cooking and doing the dishes, it is a full-body workout. I also get to know my home better that way, things that I already have but have forgotten about. Even if I don’t feel like it someday or if my cleaning is not perfect, I don’t lose sleep over it. I don’t need a perfectly manicured garden or sparkling clean floors. My space is mine to manage whichever way I want to.

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I have incorporated dozens of such small changes in my life, tracking, and if needed, modifying my consumption patterns. This helped me to work efficiently, take care of my health, and save money. Work-wise, this has been one of my more productive years. I published several research papers and taught many new courses during the pandemic. Delayed gratification also left some room for magic when I wanted to buy some things but did not, and later got them either from a sale or free from Buy Nothing. Adding to the magic were some speaking assignments, a small award, and a stimulus check, unexpected things that brought in a little bit of extra pocket money and helped to pay off my loan sooner.

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Shifting mindsets (from “I do not have enough money” to “I have exactly what I need”) has taken me on newer journeys and helped me become debt-free quicker than I expected. Despite what others say about investments and tax breaks, there is no comfort of living in debt. Now I can continue with my job or change it, change cities, countries, professions, take a break, or do whatever I fancy (including doing nothing). I am likely going to do none, but I have the freedom to. As I reflect on the year that was 2020, going debt-free is one of the more significant events I will remember about it.

 

sunshine