Post # 1
Everyone has a different viewpoint of debt, what to you is “acceptable” forms of debt?
Personally, I was raised in a household where there was no debt. My college was cash flowed, houses were paid for in cash, cars were paid for in cash as well. Although the amount of income my parents made is a huge factor in living like this, my dad also valued not buying things that weren’t needed. He still drives a car with 450k miles on it because it’s “perfectly good”
H and I have taken up those same values and after going through Dave Ramsey’s FPU and using YNAB we are comitted to not going into debt besides a mortgage and hopefully later in our life we will be able to pay cash for houses too. Although, we do have to pay off student loan debt from H, although I don’t particularly agree with taking out student loans if it can be prevented via starting at a CC, applying for scholarships, or going to the state public insitution.
But, everyone has different values when it comes to money. What do you believe to be acceptable debt?
Does your debt reality differ from your beliefs of money?
Post # 3
@IowaDDS13: For me personally, I picked car, mortgage and student. I don’t use credit cards. I either afford it or don’t have it. I have used credit cards in the past and it always leads to trouble (for me).
Post # 4
@jadlnc: Credit cards can be dangerous! I have a strong spending impulse and I’m sure it would make me feel like I have more money than I do, so I figure to stay away from them because I couldn’t control myself!
Post # 5
Car loans and mortgages are a must for many people. I don’t think those should be considered “bad” debt.
Post # 6
I chose quite a few: mortgage, car loan, student loan, credit cards with special discounts, and store cards.
I’m not a fan of Dave Ramsey.
Post # 7
@jadlnc: +1000. Cc’s are bad news IMO, at least for DH and I! We made a blanket rule of each having one credit card, to be used in emergency situations only (like true emergencies – not “it’s the last pair of running shoes in my size!” emergencies).
I also voted for mortgage, car loans and student loans. We have a mortgage and some student loans left and have paid off our one car. Not a perfect situation, but acceptable for now while we build our savings back up after doing a lot of needed house renovations.
Post # 8
I picked, car, mortgage, and credit cards for special deals (we have a mortgage and rewards credit cards). I personally don’t have any student loan debt and neither does my husband, so this is incredibly liberating for us. However, I can understand why someone might have student loans.
Post # 9
@IowaDDS13: I was raised by bankers… potentially conceived in the vault! lol
I don’t have any debt – paid for car in cash, paid off student loans, and don’t maintain a balance on my credit cards from month to month.
Having said that, I think there is ‘normal’ debt that many middle-class folks acquire and live with, including mortgage, car payments (new or used) and possibly line of credit. t’s hard to keep up with all the expenses of life without some debt (depending on your lifestyle of course). It’s managing it correctly over the long term that means success for me.
I expect to have a mortgage and to have car payments (when mine bites the dust!) and maybe even a line of credit. I also put money into my RRSPs each month.
If you’re smart about debt, it doesn’t have to become a problem.
Always pay yourself first though!!
Post # 10
The only debt we have is mortgage, student loans (his, mine are paid off) and car (his, mine is paid off).
In my mind, mortgage and student loans are fine. In my experience and upbringing, I couldn’t imagine paying those things in cash. As for car loans, I’d like to only ever have one. DH’s car will be paid off in about six months. I’ll probably get a new car in about a year, as my little Scion will be difficult when we have children…
Post # 11
I selected Mortgage, car and students loans. I also believe any debt is fine as long as you have a good plan to pay it off. My husband and I each have 1 credit card (I don’t agree with having numerous credit cards) and we make regular payments, never going above a certain limit that we have set. As an accountant, DH creates our budget and we do a good job of sticking to it; that includes payments on any debts we have.
Post # 12
I voted mortgage, car loan, and student loan – those are the very acceptable and generally pretty “normal” debt to haveIt these also don’t negatively impact your credit score.
PI also voted for store cards – I have a couple and some of them give GREAT deals. Macy’s for examplalways has a promo going on for Macy’s card holders. BUT I always pay them off instantly (I don’t even wait until the due date).
Post # 13
I wish everyone had your dad’s sensibility. My biggest regret is my student loan debt.
Post # 14
@DaisyBelle: I cannot even be trusted with “emergency only” cards. I know my limitations. lol
Post # 15
@IowaDDS13: That really is the best thing, to know your own faults. I try to be responsible, but when I have that card in my wallet I always know it’s there for back-up then I will inevitably need back-up. I have to stay one step ahead of myself. o_O
Post # 16
For us, mortgage is acceptable debt, and that’s it. Right now we have no debt, but we plan on buying a house in the future.
We save for everything else. So hopefully anything that could come up would already be covered. That’s what you save for a rainy day for.
I suppose there are extraordinary circumstances in life sometimes, so yeah, if getting in debt was a life or death thing then of course we’d pick life… but those sorts of things are hopefully rare. We try to anticipate what can/will go wrong, and plan accordingly.
I was in debt in my early 20s because of stupid spending. I never want to go back. Same with my ex. It was such a struggle. Finances are hugely important in a relationship. Lack of money interferes will all aspects of life, unfortunately.