(Closed) S/O: What is your stance on debt?

posted 8 years ago in Money
  • poll: What kind of debt is acceptable?
    No debt is acceptable - Save until you can afford it : (15 votes)
    2 %
    Mortgage : (249 votes)
    31 %
    Car Loans : (172 votes)
    22 %
    Student Loans : (207 votes)
    26 %
    Personal Loans : (16 votes)
    2 %
    Credit Cards (when it gives you a discount or a special deal) : (64 votes)
    8 %
    Credit Cards (any situation) : (27 votes)
    3 %
    Borrowing money from a family member : (27 votes)
    3 %
    Store Cards : (22 votes)
    3 %
  • Post # 47
    Member
    7382 posts
    Busy Beekeeper
    • Wedding: January 2011

    It really all depends.  Personally, I only hope to pay interest on a mortgage.

    Student debt can be reasonable though, and it may include a LOC.

    DH and I use CCs for almost everything, but we pay them off before we’re charged interest.  I’m surprised by the number of people who have sworn them off.

    I don’t plan on ever having a car loan, but I think for some people it’s reasonable, especially if it’s related to employment.

    Borrowing money from a family member might be done instead of a mortgage, student loan, or car loan.

    Leveraging can work out great sometimes, and that’s not even listed in the poll.  RRSP loans are quite common, as it’s short term and directly related to a tax refund.

    Medical debt won’t help someone get ahead, but some things are more important than net worth.

    I think debt it stupid when it’s for luxuries and a fairly high interest rate is being charged.  The best example of this would be some credit card debt.

    Post # 48
    Member
    1955 posts
    Buzzing bee
    • Wedding: September 2014

    everyone has debt. as long as it’s getting paid off, i don’t see a problem. i have close to $60,000 in student loan debt. i have credit card debt. it’s slowly getting dealt with. my Fiance also has debt, but it’s his.

    i’m not responsible for his debt, and he’s not responsible for mine. it’s simple as that. if and when we get a mortgage or a new car, it will be “our” debt and our responsibility. since it will be ours.

    Post # 49
    Member
    7382 posts
    Busy Beekeeper
    • Wedding: January 2011

    @colorofmyheart:  Everyone doesn’t have debt.  I think most people at least fall into the 0% interest type of debt at somepoint, but even then that isn’t everyone.

    Post # 50
    Member
    1955 posts
    Buzzing bee
    • Wedding: September 2014

    @AB Bride:  okay, i stand corrected. i apologize for making a generalization.

    i should clarify that everyone that i know personally, all of the people in my life, they all have some kind of debt. whether it be mortgage or a car loan or student loans, or credit cards. i don’t know anyone who doesn’t have debt, aside from kids.

    Post # 51
    Member
    341 posts
    Helper bee
    • Wedding: March 2013 - Callanwolde Fine Arts Center

    I am one of the few people that advocates for credit cards. I use mine all of the time and I get a ton of points/free cash for using them. I make sure to only buy things on the credit card that I have the money to pay for in cash and I always pay the statement in full, so I never have to pay interest on the credit card.

    Student loans aren’t ideal, but they happen. I’m hoping we will be able to pay for our children’s education without them taking out student loans, but this wasn’t an option for my DH when he was in school.

    In regards to mortgages and car loans, with interest rates being so low, we can make more money in investments than we pay out in interest for these loans. That sounds like free money to me.

    Post # 52
    Member
    1075 posts
    Bumble bee
    • Wedding: October 2013 - Vine Street Church

    I think a mortgage and medical bills are okay debts.

    I also think that student and car loans are acceptable but with conditions — it needs to be a car that makes sense for your income (no Maserati on a Honda budget) and the student loans should be for a useful degree (not underwater basket weaving).

    Post # 53
    Member
    1032 posts
    Bumble bee
    • Wedding: November 2013

    Mortgage, necessary medical (although I disagree with a system that causes people to end up in significant debt of this) and student loans are acceptable. Occasionally a car, with conditions, but in general i wouldn’t finance a car (and I never have)

    Post # 54
    Member
    7414 posts
    Busy Beekeeper
    • Wedding: May 2014

    We have a car payment but it’s 0% interest so I don’t really consider that debt.  Our money is better sitting in savings earning interest and taking out the little bit every month instead of paying it up front.  I see no problem with mortgages or student loans (although they are evil and often abused, people don’t think it through before taking them out….cough cough FH cough)

    Post # 55
    Member
    118 posts
    Blushing bee
    • Wedding: June 2012

    Credit cards are fine as long as you pay them in full when you get the statement. Also, it might not be so wise to pay for everything in cash. Why pay for a house in cash if you can put the money in a high-interest earning savings plan instead? Of course, this only works if the interest you earn from this plan is more than the interest from the bank loan…

    Post # 56
    Hostess
    2253 posts
    Buzzing bee
    • Wedding: May 2013

    I think a mortgage is a “must” debt for most people as are cars, so I don’t think those are necessarily bad. 

    DH and I have most of our debt into motorcycles, which there’s only about $6k left so we’re getting down there. We do have one credit card, but we use it for absolute emergencies like when we need groceries between DH’s paychecks. Both of our cars are older cars and we paid cash for them, so no debt here. No student loans for either of us since we didn’t go to college, which I’m pretty thankful for. 

    Post # 57
    Member
    8067 posts
    Bumble Beekeeper
    • Wedding: September 2013

    I think car, mortgage, and student loans are all fine.  The majority of people aren’t able to pay cash outright and well, they need a car to go to work.  So I don’t have any problem with those if you need them.

    Medical emergency debt.  Well, what can you do?  I don’t think it’s good debt but it is what it is.  If it saves your life then it’s worth it isn’t it (assuming you have no other way).

    As other people posted, CCs can be awesome if you know what you’re doing.  If you have cash for something or can easily pay it off in the month you can get a lot of great rewards by using your credit card and immediately paying it off.  I get a lot of rewards by putting things on my CC (internet bill, wedding expenses) that I would pay cash for, but I’d rather put them on my card and immediately pay them off with the cash.  I get benefits!  Free $, airline miles, whatever you want.

    Obviously abusing your CC and charging more than you are capable of paying off and racking up huge balances is a big no-no.  That is definitely bad debt IMO.

    Post # 58
    Member
    1213 posts
    Bumble bee
    • Wedding: June 2013

    anyone who thinks debt is okay obviously has money or has never seen someone lose their job and lose everything because none of it was theres. the bank owned all of it. My sister lost everything from one job loss.

    My DH had to take a big paycut and now we have to get rid of our car loans for cheaper ones because the payment is too much. He’s paid 24k in payments over the last 3 years, and 10k of that was in interest. we threw 10k dollars in the trash just because he HAD to have that right away. Thats just stupid. and we’ll be the first to admit it.

    I have 100k in student loan debt. 30k of that is from compounding interest alone. in only the last 5 years. If i stuck to the payoff plan the bank gives me, it would take 25 years and cost me over 250k to pay it off. NO.

    Debt is risk. and debt costs a lot more money then its worth.

    Dave Ramsey is a LIFE SAVER! We FINALLY have hope and we have a plan to pay off 60k in 2.5 years. Not to mention we are working together instead of fighting. We will go from having zero money to spare to having 2k a month extra to spare and thats not counting any raises. We will save 16k in interest. And thats not even everything. We’ll take 10 months and SAVE up for the next 20k car instead of getting a loan and paying an extra 10k in interest.

    The ONLY debt I will EVER go into again is a mortgage and even then it will be with ATLEAST 20% down, and a 15 year loan. With our mortgage payments no more then 25% our income.

    I knew debt was stupid before i read dave ramseys book but i never saw a way out of it until now!

    Post # 59
    Member
    7813 posts
    Bumble Beekeeper

    @IowaDDS13:  There are certain things that are not feasible to pay cash for. I don’t know how long I would have had to live at home to save up $600,000 to buy a house, but I wasn’t willing to do that. A mortgage is fine in my books, and so is a car loan (as long as it is not living outside your means – I wouldn’t recommend a Lexus to someone who can afford a Kia).

    As long as debt is manageable, folks are living within their means, and money is still being saved each month, then I see no problem with responsible debt that is being actively repaid.

    Post # 60
    Member
    7813 posts
    Bumble Beekeeper

    @PacificMrs:  This is totally off topic, but I wanted to ask you – did you guys take any engagement pictures with the motorcycles? I think that would look cool 😀

    Post # 61
    Member
    2831 posts
    Sugar bee
    • Wedding: May 2012

    I currently have $0 debt since the mortgage is my husband’s from before we married.  🙂  I will take a car loan if I have the assets to pay it off, that’s not bad debt.  I think student loans can be used responsibly, but that’s difficult more and more with an education cosing $100k+ and graduates working for $15/hr. 

    My husband’s parents hate debt, my parents hate using debt irresponsibly.  There’s a difference.  🙂  We usually agree, though.  For example – even though we could pay more on our mortgage, we feel no need to pay it off as soon as possible and take away from our retirement and other savings.  His parents #1 priority with their income in paying off debt.  They paid off their car, their house – everything.  Which works for them, just isn’t our approach right now. 

    The topic ‘S/O: What is your stance on debt?’ is closed to new replies.

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