Were you ever in debt?

[LivingAlmostLarge]

I was contemplating about someone asking how you get into credit card debt on another thread. Easy peasy honestly. I can understand.

CC debt I never had an issue with. But my DH had a $5k car loan and we've had $10k in student loans and currently have another $26k from his MBA now.

So for us our debt has mostly been student loans. But I can understand how it just snowballs.

So I have a medical student this summer (rolling my eyes) and I can't BELIEVE the amount of debt that they are in.

So to go to Georgetown University for Medical school tuition alone was $55k/year. With living expenses in DC it would run around $80-90k/year. HOLY COW.

Now add that onto undergrad loans and no money during residency and I get how it adds up fast.

But when I asked him how people just keep on running up debt? His answer? This is an HONEST answer, what's another $100k when you already are $300k+ in debt? Apparently this is a common mindset.

I freak out looking at our $26k debt. I thought that was a lot. I can't seem to wrap my head around it's just another $100k. But if I was staring at $200k in debt maybe i would stop caring.

I think that that same attitude happens with credit card debt. What's with another $10k? And it just keeps adding up.

[Broken Arrow]

Oh yes, I was most definitely in debt once. Back when I was married. I admit I had that same attitude as your friend there. What's another X amount? My ex had the same attitude too. Still does I think.

But it all changes when you seriously try to pay it back, and realize just how tough it is to climb back out, as opposed to sliding down.

What's another X amount? An easy way to stay poor for much longer.

[GREENBACK]

An old saying with politicians goes: "a billion here, a billion there and soon you're talking about real money"(joke). I think the mindset of few more dollars gets exponential with the amount described.

[maat55]

At my worst I had:

A car note 14k
HEL 8k
CC 5k
Bus,CL 5k
Acc. settlement 7k

After beginning to listen to DR, I paid down these debts to about 28k, sold my house getting 40k in equity, paid off all debt and used the rest to get in my existing home.

Instead of doing the right thing I financed my truck. After coming to my senses, I quickly paid off the truck, built my EF and have been debtfree since(other than my mortgage).

[Seeker]

Most people are in "debt" at one point or another. Especially if you count a mortgage.

I understand education debts, medical debts, auto debts, and mortgage debts. These are usually non-reoccurring debts that many of us take on according to our needs at the time.

If your question is about CC debts, then my answer would be "no." I pay my total complete balance due each and every month. I've never not done otherwise.

If I don't have the money already in the bank, then I am not supposed to have that item (whatever it is). It's that simple for me.

[disneysteve]

I've absolutely been in debt, but never CC debt. I graduated med school with about $102,000 in student loans. When we got married, my wife still owed on her car. I don't remember the amount but it was probably about $5,000. We had a loan on our 2000 van but when it got wrecked in 2002, we used the insurance check and cash to buy another one outright. My car was paid for with part of a home equity loan that also paid off some student loan debt.

I'm one of the folks on that other thread who said I can't comprehend the debt mindset. To me, there is a big difference between borrowing money to complete your education and borrowing money to buy a new handbag or bigger TV.
Today, we are debt-free except a 5-figure mortgage and we make extra principal payments on that.

[kork13]

Never been in CC debt, thankfully... but I've had as much as $41k in debt at one point... A $11k car loan (gone for almost 6 months now), and $30k in a personal loan that I'm still slowly chipping away at (currently $25k, but I'm intentionally paying it slowly... the interest rate is only 1%).

I definitely understand HOW people write off getting into massive/uncontrolled debt..... But I just can't imagine allowing myself to do it. I'm impulsively against owing anybody anything, and I don't think I'll ever be totally comfortable with holding debts.

[Tree0164]

Yes...

Here is a thread from 2004 when I was still in debt we got everything paid off in Nov 2004.
Payoff news

I haven't had a revolving credit card balance since

[happygirl]

I don't carry CC debt. I pay it in full every month. I've had car loans a few times, but I buy rather modest cars so they weren't huge. Now I prefer to save up and buy with cash. I've had student loan debt, but never anything like what you're describing and I worked hard to double up payments and pay it off early. Honestly, I can't understand going into debt that deeply for any degree, but that's just me and my deep aversion to debt.

One day I was with a group of ladies and someone asked about emergency funds. Most people had 3-6 months or more. One lady said her savings account was so shameful she wouldn't even tell us how little was in there. She fussed about the money her husband wastes on lunches at work as if that was the reason they had no savings. A few days later she brought in a new designer purse she just got. I don't know how much it cost, but it had to have been at least 125$. That is foolish spending in my mind. They also go on really nice vacations and shopping day trips regularly. I try not to judge, but sometimes that's a challenge.

My concern at this point isn't debt as much as it is retirement. I'm far from where I want to be and feel like I can't keep my head buried in the sand any longer on this issue, thus I'm reading financial forums and trying to get a plan.

[creditcardfree]

Yep. I've been in debt.

In my early years I didn't pay off my cc every month. I did pay interest. However, I did have an aversion to 'too much' credit card debt. I don't think I ever actually owed more than $1000 at any one time. However, I wasn't able to pay it off every month at certain points.

When I married DH, he brought about $10K in credit card debt from a failed business. We quickly took out a personal loan to pay off the credit cards as well as other creditors. We paid that debt off fast!!

I've had student loan debt as well. I think I owed only about $3K. My parents took some of the loans as well as had saved cash for my education. We've also had student loans for DH, too. However, most of his education was paid by the military or his private employer.

Today we have a mortgage, a home equity loan, and one auto loan. Zero credit card debt. Right now we are working paying off the home equity loan.

I do hope our next vehicle can be paid with cash. I dont' like auto loans. DH doesn't mind...hense the auto loan.

[Radiance]

In my case, it was the wrong mindset.

Not wanting to wait to have things, not planning how to pay them back, not understanding how much was I really paying for the stuff I bought in credit (price+interest+the ocassional late fees+anual fees)

I have not used credit for over 8 months with the exception of medical bills which I pay back in 3 payments or less.
I have reduced my cc debt from 25K to currently at 8k and I continue to take them down. Any bonus, any tax return, even my "money found on the laundry stash" goes into paying that debt down.

I started with 4 cc and 25k and I have 1 cc with 2000 in debt and a 3 year signature loan for 6000 I used to consolidate the other 3. I did not close the other three but they have zero balance.

I am Christian and I learned in a biblical-based finance class that being in debt is wrong even from that perspective.

Most Christians do make an exception for mortgage. Even cars are bought in cash, that is my long term objective.

I plan to pass this lesson down to my son and to involve him on finance planning with age appropiate tasks. He already has a savings account (he is 16 months old)

[croland]

I think I'm at the max debt amount that I am comfortable with right now, even though it's less than a couple years ago. This includes home loan, school loan, etc. I'm looking forward to the debt being paid off this year and being debt free eventually.

[reptile411]

I flip my lid when I see the gas bill lol. I was tens of thousands of dollars in debt just a few years ago. I paid it all off. Worked very very very hard and life has been grand sence. I do have $130,000 in mortgage debt and about $10,000 in auto debt "for a car that's worth 6 LOL" I really don't count these debts though as everyone seems to have a car payment and house payment. I however will never have another car payment again. We have enough money put away finally to pay cash for the next car and get one twice as nice so from now on cash it is, someday I hope to say the same about the house.

[simpleyme]

yes everytime i have paid off a mortgage I have ran out and bought another house(keeping the old one) i am getting close to paying off this house and i have decided no more debt,if i buy another house I am just going to buy it
putting out a chunk of change like that all at one feels different
if I would not splash down the cash and just buy it tells me I should not "charge" another house
I am this close to paying no interest on anything ever again;-)
when we were young we did finance a car which was stupid and carried a few small balances ,but only because we just did not have it figured out yet

[parafly]

Yes, I have been and still am in debt.

The only time I was in CC debt was when I graduated from college and needed to buy furniture for my new apartment. I charged a few thousand dollars and had it all paid off within four months. I've been paying my CC balances in full each month ever since.

My wife and I have a combined 20K in student loans. This debt doesn't really bother me as our monthly payments and interest rates are low, and the interest paid on these student loans is tax deductible.

We had two car loans recently, but have cut that down to one in the past month. We plan to pay the other one off within the next month, which would leave us with absolutely no debt other than student loans.

[FrugalFish]

We had a couple thousand in CC debt after DH was unemployed for an extended period of time. That was surprisingly low for the amount of time he was out of work, and based on necessity.

Now we are in debt with our mortgage and our car loan. I had hoped to be able to pay cash for a car when we needed one, but we didn't want to strip our savings that low at this point in time, so we financed half the cost. Still, I don't like being in debt.

[MonkeyMama]

It definitely comes down to your mindset/attitude. IT's all there really is to it.

I grew up in a very anti-debt family so pretty much never looked at debt as an option. I have taken on a couple of small auto loans (never bought a vehicle I couldn't pay off in a few months) and we of course have a mortgage (only kind of debt I personally don't mind - has been cheaper than renting, for us). My spouse has never had an auto loan (refuses) BUT his parents bought him his first car (which makes a bit of a difference).

Over the years, when friends hear I am rather anti-debt or never had debt, the excuses start flowing - But *I* need a reliable car, but *I* didn't have my parents pay for my college, But, But, But. I can't believe some of the things people have said to me over the years. Who said I didn't have a reliable car??? To be fair, I have extremely supportive parents, so I understand the assumptions sometimes that they must have paid for my college. But, they simply didn't. I have many friends who don't know my parents from adam but assume if we never had college debt that we must have not had to work at it. ???

Which reminds me, I went to State and most of the people there were completely on their own (many older students). There were always a couple of completely "whoa is me, my parents aren't helping me" people who would rack up tons of debt and whine about it. The rest of us just kind of rolled our eyes. As many of us were in the same boat but working more and living more modestly. It always amazes me what people assume!!!

The reason my parents are so anti-debt and frugal was because they grew up very poor. I always assumed people from that type of background were VERY careful with their money. I have in the last few years met a number of people who grew up poor and turned to debt as a way to cover it up or because they went for so little so long that they felt they deserved nice things now. On that end of the spectrum it really comes down to lack of financial education too. IT's an "I'll worry about it later," attitude, but I don't think most people have a clue what they are getting into with credit card debt and many student loans, etc.

[disneysteve]

Originally Posted by reptile411

everyone seems to have a car payment

This is a very dangerous and costly mindset. NO, everyone does NOT have a car payment. There are lots and lots of people driving paid off cars. I do know many people who feel the same way as you, though. They think it is normal to always have a car payment. As soon as they pay off one car, they trade it in and buy another. Or even worse - they lease their cars so there is no chance of ever being payment-free.

What you should do is buy an affordable car, borrowing the minimum amount necessary. Once you pay it off, continue to save the money that was going toward payments. Open a seperate account for that money. When the time comes that you need to replace the car, use that account to buy the next one for cash or at least a much smaller loan. By the 2nd or 3rd car purchase, you should be paying cash.

We have not had a car loan since 2002 by the way.

[GREENBACK]

I guess you could say I had career start up debt. I worked all through college(at one point three different jobs) so I wouldn't have loans to pay back. It worked but left me penniless in a strange new town and with a real job with nothing other than a beat up, very old pickup and a few clothes and things. I then used cc's to outfit an apartment and buy things neccesary for work and for living in general. I racked up about 10k in cc debt but this wasn't done haphazardly. I had a plan to buy what I needed and to pay the amount back as time allowed. When I had what I needed I completely stopped using the cc's and paid them off in about 4 years. I consider that responsible cc use. It helped me out of a tough situation.

[MonkeyMama]

Originally Posted by disneysteve

This is a very dangerous and costly mindset. NO, everyone does NOT have a car payment. There are lots and lots of people driving paid off cars. I do know many people who feel the same way as you, though. They think it is normal to always have a car payment.

That's the thing - it all comes down to mindset.

If you think everyone has a car loan, you don't think twice about it.

IF you grew up in a family that always paid cash for used cars (I did) you think about car debt in a very different light. I wouldn't look at car debt as normal or desirable, in the least.