I was for a few years, and then I was in debt again to pay off a vehicle. I worked to pay off my debts. I joined a local debt support group six years ago and I still attend, on the pretext that I have the largest debt outstanding ($154,486 mortgage).
But I might be in a very small minority (four of 540,000). But what demographic would that small minority be?
Being willing to listen to and support people wanting to get out of debt?
Willing to get out of consumer debt while offered a low (2.9%) interest rate?
Being in consumer debt in the first place? If yes, then why are there payday advance offices in my city?
Is having consumer debt like hitting one's kid or spouse, or having a bedwetting problem, or secretly being a gay meth user while publicly facing the world as an esteemed and prominent religious leader? And if it is so shameful, then why did the Petersons go on "20/20" and admit they can't afford those vacations and large house, and multiple rental properties? Is living in a smaller house and taking less frequent vacations even more disgusting to the American public?
In truth, I like to see people get out of debt. I like to reward them. I come to savingadvice.com and when I see a "woohoo! Debtfree at last!" post or comment I want to congratulate the poster.
I wish owing weren't such a stigma here. How can it be, when the government America elects, left or right, red or blue, offers IOUs to the Social Security trust fund?
I don't get it.
Should I be ashamed to have debt?
January 23rd, 2007 at 07:07 pm
January 23rd, 2007 at 07:24 pm
January 23rd, 2007 at 07:29 pm
January 23rd, 2007 at 07:50 pm
I'm concerned about the negative savings rate, and lengthening average terms of vehicle loans. I'm wondering why it seems to me only four people in my fair city feel okay about talking about and planning their way out of debt. It's not like we drive drunkenly or distractedly and kill/maim innocent victims.
I want a larger community of people committed to upping the savings rate back to 10% or greater.
January 23rd, 2007 at 08:23 pm
My thoughts are that most people are a bit ashamed to have debt but they are far more scared to be thought of as poor. They'll dance with a demon that they're comfortable with (debt) to avoid Satan himself. After all, to many people you have stages of debt - childhood, to your parents; teenage-hood, school loans; young adulthood, the car, perhaps a condo; adulthood, mortgages of various kinds (after all, you are supposed to upgrade your house every 5-7 years) - and you never are supposed to get rid of debt completely.
Debt is not a new thing. What I think is strangely new is the utter lack of really, really bad stuff happening to you if you have too much of it. When you think about it, most people don't understand what taking on a $500,000 mortgage really, really means. To the average person its just a number with a weird monthly payment connected with it, and yes you pay forever ... but so what?
January 23rd, 2007 at 09:02 pm
I'm not clear on that myself, baselle, truthfully. I had thought that most people were not really ashamed to have debt because they had savings, or rich parents, or a high net worth. One man I'll call GF was so much in debt that his family was evicted from their apartment, spent time in a homeless shelter, then he quit his well-paying job as a database programmer to move across the country to be near his parents, for financial reasons. For a year GF's coworker, a woman in my debt support group, entreated him to join us. No.
mortgages of various kinds (after all, you are supposed to upgrade your house every 5-7 years) -- is this a U.S. belief construct? The first times my parents found their names on deed titles, my mother owned a house for 14 years before downsizing to a condo, my father co-owned for 22. They never lived in the United States. My grandmother owned two houses in her lifetime. It's been eight years since I bought my home, and I plan to sell it in eight years, but only because I plan to move out of the country.
When you think about it, most people don't understand what taking on a $500,000 mortgage really, really means. I might not be thinking about it. I assume that when you're plunking down money for land and construction, and you have to borrow most of it, you know what you're getting into. $500K for 30 years @ 6.25% = $608300.40 in interest. True many people don't see the point in an ol' fashioned mortgage burnin' party, but I'd like to have one one day. It's the traditionalist in me.
I can't shake the idea that these people's parents are going to help them out, because I can't count on my parents to help me out. They can operate with more confidence than I can. Or they have terrific health benefits and jobs for life.
What I think is strangely new is the utter lack of really, really bad stuff happening to you if you have too much of it. Do you think the 2005 Bankruptcy Act isn't strong enough? If you think it'll take a crisis to get most Americans saving, I fear you are right. I idealistically would appeal to an average American's core beliefs of independence and freedom (from credit cards) and self-rule (choosing a job based on personal fulfillment, not a job one hates so one can pay bills). But maybe I'm projecting traditional American values on today's Americans.
January 23rd, 2007 at 09:57 pm
January 24th, 2007 at 05:12 am
Of course, I now don't care what stigma is attached to being debt-free. I just want it!
January 24th, 2007 at 06:13 am
"ooooohhhhhh, you have CC debt and you'll have to work how many years into retirement to repay that mortgage!!????!!" ...with a snobby twist of nose. Now that's not what I'd do to someone who was not trying to rub my nose in their McMansion and Prada bag. A normal somebody I wouldn't be rude to, but I would inform them of the opportunity costs they are making by chosing some of the things they do IF they asked me about our lifestyle or money management.
Yes, I'd say sadly that debtor's prison has definitely gone out of the realms of most folks memories in the US. Like you Paulette, I fear that someday soon there will come a great awakening...as the Piper always wants to get paid.
And you're correct, it doesn't help that our elected leaders are just as brainwashed as the rest of us by advertising. I find it helpful to remember that many banks and CC companies are in the same bed so to speak w/the gov. as they grease each other up to the worker bee's detriment.
The question becomes, "how can we help?" I think that those that are in the working world have to be perhaps more vocal w/their co-workers about the WHYs and WHEREFOREs of their frugal choices. I think we have to do more in public education as to why we can't consume everything as there will soon be nothing left. We are a people w/our heads buried in the sand.
Teach moderation to our children. Preach conservation to the masses. Vote w/our wallets. Converse w/our elected officials till they are tired of hearing from us and begin to do differently. I'm sure that most would rather remain ignorant - shoot, I did for a long, long time myself.
We need to be more vocal and remember the Mayans. Otherwise, we may end just like they did.
January 24th, 2007 at 07:26 am
In fact the fact I consider my mortgage a debt and want to pay it down and not pay hundreds of thousands in interest - yeah everyone else thinks that is pretty weird. House = ATM. That is the prevailing attitude here with so much equity.
I do know people with cc debt and school debt who I think have faced more problems and feel more stigma. But I guess it depends on the type of debt.
Funny how people feel bad for having student loans (that hopefully will serve them well in life overall) but can not fathom how not to have a car loan- like it is really that impossible or weird to save up for a $20k purchase. Why is a car loan so generally accepted and using a house as aTM, but other types of debt carry more stigma.
Interesting discussion though.
January 24th, 2007 at 10:17 pm
"Do you think the 2005 Bankruptcy Act isn't strong enough? "
I think I mis-wrote here. Yep, the 2005 act has plenty of wicked teeth in it, at least for those people who took enough interest in it to read about it. What I was trying to get at was that if you asked most people about that act you would get a shrug or a stare. People don't care about it until bankrupcy is likely and by then its too late.
What I was thinking about when I wrote that first sentence were folks in the 1920s buying things on installment, stock on 10% margin, spending money on liquor and high living... and then came the Great Depression. You just don't want to go into a great economic contraction with a lot of debt and in a spending stupor.
January 31st, 2007 at 01:22 pm
Ok, I have credit card debt BUT I can pay it all off. The reason I don't is 1) the rate is low and 2) I'd rather have the money in the stock market which is doing really, really well. In fact, I'm even considering borrowing against my life insurance policy so that those funds can be in the market working for me!
My brother keeps on me for driving a 11 year old car and not getting a new one. Can you imagine! I'm supposed to get a new car just to drive around (it would be completely paid off if I did get one) and watch it depreciate to nothing while that same amount of money could be easily doubled in the markets over the usefull life of the auto.
Really, who do you people know?