Eliminating debt before departure is a very important aspect for living our long journey peacefully and without worries.
We live in a society where people are increasingly in debt: if once there was mainly just the mortgage, today there’s car leasing, installments for the television, installments for the microwave and for every smallest and most trivial thing. Personally I don’t like having debts, in fact the only one I have at the moment is the car lease. In less than a year the contract will end and I’ll have to evaluate what to do.
On one hand, leasing allows you to always have a new car and this avoids having repair costs and various surprises that you would have with an older used car. It’s true though that at the end of the contract I’ll still have to put a certain initial sum on the table to get a new car on lease, I would always have the monthly payment to make (currently CHF 330/month) and I would have to continue paying comprehensive insurance mandatorily (currently CHF 1,350/year). And this just for a car that I use to make at most 12 Locarno-Menton trips per year (when I go sailing) and some small evening trips around Locarno.
Buying a good used car, or taking over the current leased car (in this case I would also know that it’s in excellent condition), would allow me to:
- eliminate comprehensive insurance, probably lowering car insurance by CHF 600
- eliminate monthly lease payments (CHF 330 x 12 = CHF 3,960)
Overall I could save CHF 4,560 per year and would no longer have debts.
Another very common debt is the mortgage on the house. A few years ago I was looking to buy an apartment, but then I didn’t conclude anything.
For those who have this debt, there are two paths to take: if you intend to take only a few sabbatical years, the option of renting out the house during your absence is probably the most sensible one. You would have a monthly income and upon return there would still be the house. Clearly this option implies a certain financial responsibility, because non-payment of rent can become a problem.
The other possibility is to sell the house, thus extinguishing the debt and also getting something for the cruise.
See the other articles on the topic “finances“.
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