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DEBT: Thinking beyond the slogans

November 8th, 2007 at 09:53 am

Warning ... This post may be viewed by some as a rant, but I don't mean it that way. It is meant to start a dialogue about thinking beyond the catchy slogans when it comes to discussions about debt.

There was a thread over on the forums recently where someone got on their high horse preaching about being debt-free.
It is easy to say "I want to be completely debt-free" but if you stop and really think about it deeply, you will realize how totally impractical that is.

Yes, it is 100% possible to pay as you go with cash for consumer purchases and avoid debt that way. Yes, it is definitely possible to save up and pay cash for major purchases such as appliances and cars. And I suppose that, yes, you could even save long and hard and pay cash for college and for your very first home (or just not buy a house and rent forever)...But really, how practical is that?

Like many of you, I prefer not to have personal debt. I am one of those who paid off my mortgage early. I don't carry a balance on my credit cards; I have no personal loans (no student loans, no car loans, nada). But I am not going to run around spewing the anti-debt slogans that I heard on some talk radio show, because I realize that debt has a place in our society, and sometimes it is very positive.

So, this is for those of you who want to preach about being anti-debt ... here is something to think about, if you are capable of opening your ears and mind wide enough: If you are really and truly going to promote a debt-free lifestyle, then shouldn't you be voting "NO" on every school, hospital, highway, and library bond that appears on your voter's ballot? Don't you realize that when you vote to approve a bond for public works, you are voting FOR DEBT?!? Shouldn't you be going to school board meeting and insisting that the children in your district attend school in run-down and outdated buildings until the district has enough cash saved up to pay for a new one? Shouldn't you be advocating that residents be allowed to die instead of upgrading hospitals with DEBT?

Sure, it would be fantastic if our local governments had enough reserves to pay cash for everything, but that is a pie-in-the-sky dream. Are you willing to make children, the ill, and yourself suffer until that fantasy day comes?

9 Responses to “DEBT: Thinking beyond the slogans”

  1. Amber Says:

    I do agree that people should be "more" involved in their communities, however, I think the "debt free" way of thinking is on a personal level...ones own debt. Grant it when we vote for bonds, etc we are indeed incurring debt as a community but f I had children I would definately want my kids in a safe enviroment, either way I want kids to be safe. Think of it this way, you vote no a kid geos to school gets sick or hurt the parent then sues and will win because people are sympathetic when it comes to kids now you have incurred the very same debt you were trying to avoid

    nice post Smile

  2. Stein Says:

    I don't think a goal of being debt free is impractical at all. It won't happen this week for most of us, but for a goal I think it is very positive.

    Our country has over $900 billion in credit card debt. There just aren't many positives in that unless you own a store at the mall.

  3. PauletteGoddard Says:

    We pay for the costs of public infrastructure one way or another: if we don't want our kids to go to an outdated, needs-repair public school we can either vote for an additional levy or bond, or we can pay for a private school. It helps to be personally debt-free and to have some post-tax savings available when one is in a fiscally conservative legislative district.

    An initiative to end the "super-majority" vote required for an increase in school funding was rejected by local voters on Tuesday. My guess is that the voting community in my area is either affluent enough to choose alternatives, or most of them don't have children and therefore don't see value in contributing to public school coffers, or the voting public all went to private school and don't see value in contributing to public school coffers. Why be a member of a community if one isn't willing to both benefit from and contribute to it?

  4. Stein Says:

    I voted against it for two reasons: I don't have faith the money will be well spent and I don't believe that the problems facing our schools are fixed by money only. A bad program well funded is still a bad program.

  5. monkeymama Says:

    Amen.

    You know we could REALLY work our butt off and pay our house off in the next 5 years or so (optimistically). But at what cost? Why? We are on our way to a very decent retirement (only 30). We have had a great start. We have worked really hard to get here. We wanted a certain measure of financial security before we had kids. & we got it, and now our priority is our kids.

    I think what I hear missing in a lot of the extreme anti-debt side is just life "balance." Would I rather have a paid off mortgage and lose 5-10 years of my kids lives? I think what, am I crazy? Of course not. We could have alternatively waited longer to have kids, until we paid off the house. & wasted much of our youth. Not sure it would have been best. (Certainly not when I look at my 2 precious sons).

    I guess it reminds me a lot of retirement talk. I don't get the standard retirement model. Work really hard at a job you hate and pays well so you can retire. How many people you know really have the means or the health (certainly rarely both) to enjoy their retirement? I rather enjoy life now.

    I think in a lot of cases it is possible to be debt free and keep that balance. & that is why I Admire people like Ramsey for helping. But gosh he has got some obnoxious mantras too. LOL. There are a lot of things we could do to be debt free in the very near future but they would all be a compromise we are just not willing to take. & why bother. (Move hundreds/thousands miles away from extended family? So not worth it. Be too busy working to enjoy our kids? etc.) Life is short, we live it now. We're not mired in debt by any means (rarely use it) but sure will use it where it helps us to get ahead and live more comfortably. I Can't figure any angle where I don't LOVE my mortgage personally. It has brought us tremendous financial freedom. Hope to pay it off 45. 55 if we never prepay a dime. Should also have millions in the bank by then. Win-win.

  6. scfr Says:

    I wonder if people sort of put on rose-colored glasses when it comes to what they will label as "debt"? My mother and I had a discussion about government spending that took a rather interesting turn. She was ranting on one hand about the "war debt" that is being passed on to her grandchildren, yet a few sentences later was raving about her generous government pension. She said that the pension was "necessary" because "government jobs pay peanuts" but she refused to admit that her pension is a form of government debt. It was almost as if she was saying "if I don't agree with what it is being spent on, it is DEBT, but if I agree with what it is being spent on that is something good that we certainly can't call the evil D-word." Come on ... both of those things are debt ... and the simple fact that they are debt doesn't make them good or bad.

  7. baselle Says:

    I think some of our confusion lies with the fact that the MSM labels debt simplistically "good" and "bad". There is no such thing as good and bad debt - all debt is both good and bad. Instead, there is necessary debt and unnecessary debt, both of which should be kept under control. Bonds, levies, and mortgages are all forms of necessary debt, if the goals are well thought out and you have a decent plan to pay it back.

    I voted for the simple majority, mainly because I knew it wouldn't pass. Frankly, I would love all levies like sports stadiums, etc, have to be voted on by super majority.

  8. Broken Arrow Says:

    Yes, I agree that some of the "anti-debt" people are over-simplifying the issue. If I really, really wanted to, I could've been debt-free by now. However, and as debt-adverse I am, I think it would be foolish for me to not divert my money towards my 401k, for example. This of course, also assumes that I don't have high-interest debts like a credit card charging 30% (which I don't).

    Personally, it just depends on the numbers, and seeing which avenue gives me the best bang for the buck.

  9. Caoineag Says:

    Not that I think the anti-debt people are right but to add a counterbalance to these arguments I would add one thing. Yes debt can be very helpful for accomplishing your goals, but make sure that your goals don't hinge on being able to work a full 30 or 40 years.

    I don't know how many times people told me their financial plans and it includes letting their debts keep continuing so that they can invest all the money in their retirement. Coming from a house where my father had back surgery twice and my mother died while I was a teenager, I view it as financial suicide to count on your income lasting the whole 30 or 40 years. What happens if you have to take some time off due to disability or your spouse dies?

    I just feel that everyone should keep in mind that things can happen when you least expect so its best not to overstretch. I want my dh and I living on one income because then if something happens, we stand a better chance of not losing everything (not too mention that gives you a lot of money to save for retirement).

    Now that said, I never could have made where I am today without debt so I don't really have many regrets about that.

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