How Anti-Debt Philosophy can hurt a relationship

[Scanner]

I know JimOhio was sharing his relationship trouble so as a reciprocation, I want to share a little of mine.

Last year, we spent about $17,500 on household improvements (above ground pool, hardwood floors, new furniture (the other set was 10 years old), and a deck around the pool). Mind you we also both maxed our Roth's out. . .but I would have probably liked to have saved some additional in a SEP-IRA.

But fine, we needed the furniture and "wanted" the other stuff - you make choices.

Anyway, I have a LOC thru my business that I was running around $8000 in balance. In May/June I had some problems with my billing service. . .so I had to run it up to $10,500.

My DW, being so "anti-debt" (maybe that's why I am strangely attracted to SavingAdvicees, LOL) is flipping out on me again (it's an old issue). Yet, the consumer spending, she feels entitled to. . .because we are professionals and she has "delay-gratified" for so long on things.

Anyway, you can imagine the strife. . .I don't expect anyone to solve it. . .I am actually working to retire the debt in 3-4 months by not taking home a paycheck and getting income from moonlighting.

I would say though in advice to this - the happiest relationships are where the couple are on the same page, whether you are the Jonzez or the Frugals.

I understand there are 2 sides here. . .I could see taking her side or my side. . .both are "bad" (debt and consumer spending) but at least my debt is tax deductible and works to bring income (my business.).

[jIM_Ohio]

Debt is not bad, it should just be used judiciously and moderately.

Obviously some people are anti debt, some are anti war and some are anti abortion. Some may even be all 3.

I agree being on same page as spouse on a fundamental level is needed. My wife has relaxed considerably knowing the cc debt is gone, yet I don't rest well because we don't have much cash on hand for emergencies.

[KGeary]

I know JimOhio was sharing his relationship trouble so as a reciprocation, I want to share a little of mine.

Last year, we spent about $17,500 on household improvements (above ground pool, hardwood floors, new furniture (the other set was 10 years old), and a deck around the pool). Mind you we also both maxed our Roth's out. . .but I would have probably liked to have saved some additional in a SEP-IRA.

But fine, we needed the furniture and "wanted" the other stuff - you make choices.

Anyway, I have a LOC thru my business that I was running around $8000 in balance. In May/June I had some problems with my billing service. . .so I had to run it up to $10,500.

My DW, being so "anti-debt" (maybe that's why I am strangely attracted to SavingAdvicees, LOL) is flipping out on me again (it's an old issue). Yet, the consumer spending, she feels entitled to. . .because we are professionals and she has "delay-gratified" for so long on things.

Anyway, you can imagine the strife. . .I don't expect anyone to solve it. . .I am actually working to retire the debt in 3-4 months by not taking home a paycheck and getting income from moonlighting.

I would say though in advice to this - the happiest relationships are where the couple are on the same page, whether you are the Jonzez or the Frugals.

I understand there are 2 sides here. . .I could see taking her side or my side. . .both are "bad" (debt and consumer spending) but at least my debt is tax deductible and works to bring income (my business.).

Good story, but your logic is flawed.

This isn't "how anti-debt beliefs ruin a relationship" - it's how to people not being on the same page ruins a relationship.

Don't bundle in anti-debt philosophy with this...it has nothing to do with that.

[GREENBACK]

Might be heresy to say this here but debt isn't a "four letter word" if you have a plan to promptly pay it back.

Our whole economy is currently scrambling around banks getting back to making loans. Ask any buisness and they'll say short term debt isn't bad epescially right now.

If you're not making loans on top of other loans and this isn't an over the top extravagance I think you're ok.

The "Frugals" may bicker constantly but usually stay together. The "Jonezez" have a good time til reality hits and they split up.

Will the "household improvements" you mentioned add to the value of the home? "Will her consumer spending" improve your net worth? Does it matter either way? Not really questions to you as much as something to ponder.

[boosami]

Might be heresy to say this here but debt isn't a "four letter word" if you have a plan to promptly pay it back.

I'll go even further to say that debt isn't a four letter word if you have a plan PERIOD. I wouldn't call paying off a home in 15 years prompt, let alone 30 years.

Without debt, millions of people wouldn't be able to operate businesses, buy homes, or afford to live and support their families through rough patches.

Taking on debt is a risk that--when done responsibly--requires planning. Whether that's planning ahead by figuring out how much interest you'll be paying, to estimating the risk that you'll not be able to pay the funds back, individuals need to decide for themselves what amount of risk is acceptable. For some, that means no debt, and for others that means lots. Google was partially funded by the founders maxing out numerous credit cards, and that risk has paid off!

Debt an not an expletive.

[LivingAlmostLarge]

debt is not a bad word. If we didn't take out debt no one would have any return on savings. how did we get 4% on our savings in the bank? The bank loans it out to someone else at a higher rate. If we didn't have debt, then there would be no investments.

And we'd all have only cash and no stocks, no bonds, etc.

[GREENBACK]

Boosami
When I said promptly I meant in relative terms of the venture being taken on. Obviously a loan to start a buisness or buy a home is different from basic credit card debt.

My attempt was to respond to the idea of being totally anti-debt. It can be carried to the extreme as much as overspending can becuase of lost opportunities.

[glock35ipsc]

Might be heresy to say this here but debt isn't a "four letter word" if you have a plan to promptly pay it back.

Our whole economy is currently scrambling around banks getting back to making loans. Ask any buisness and they'll say short term debt isn't bad epescially right now.

...................

The "Frugals" may bicker constantly but usually stay together. The "Jonezez" have a good time til reality hits and they split up.

That's funny, our business has never taken a loan in 26 years of existence. Not even a personal loan to assist the business. Always made payroll on time, always had materials to do the jobs. I guess some businesses might need a loan for, something, I guess. Never needed one yet.

Being debt free, and not using debt at all, has done amazing things for our marriage and our lives. We have had the most amazing 14 years of marriage, but the difference between an amazing debt-free marriage and an amazing in-debt marriage is like night and day.

[GREENBACK]

My hat is off to you glock. If only the vast majority of buisneses/relationships could operate like this it would be great. Most don't seem to.

[glock35ipsc]

The particular industry we work for is one of the biggest reasons why. We know when we will be busy, and when we won't be. We don't have to stock a large inventory of materials either, most materials are ordered once we receive the purchase order (all of our products are specific to each customer), then we only order what is needed for the particular job. So our overhead is next to nothing, and I think for us, that has been the key.

[tripods68]

Business that operate in the "cash" basis shouldn't have to worry about the credit crunch, only when business starts look to expand then the word "debt" has new operative meaning.

[maat55]

I operate debtfree. I think debt on assets that increase in value(Normally) is ok, but I'm not a fan of consumer debt.

Scanner, at least your wife is conscience of debt. Mine could care less.

[Scanner]

I guess I am a weird egg - I am "pro-debt" but also "pro-investing." It may be a vice, but I consider my $24,000 LOC an "asset" to me.

Because I take "assignment" from ins. co.'s.. . .when they have a bad month, they can just not send payments out. If they are late, they pay like $.14 in interest or something. IT's the reality of my business.

The alternative is to go cash. . .non-assignment but people have just come to expect to hand you an ins. card and say, "Good luck. . .I hope you get paid."

I tend to want a simpler life with material things though. Not too much material gives me the thrills (although I used to lust after an endless pool. . .but I am over it).

I don't think I'll change and I don't she will.

[Scanner]

Will the "household improvements" you mentioned add to the value of the home? "Will her consumer spending" improve your net worth? Does it matter either way? Not really questions to you as much as something to ponder

From what I have read. . .

1. Hardwood Floors - yes
2. Above Ground Pool - leans towards a no
3. Deck - yes. . .cheap square footage of "living space" - combined together with pool. . .helps.
4. Furniture - no

Well anyway, I hope the compromise to be reached is I retire the debt (which I want to anyway - its costing me 7% per month). . .but keep the line open but reduce it to the minimum - 10K or even 5K.

The alternative to a LOC for my business would be to keep a "cash reserve on hand" of maybe $10,000 earning .5% interest at my local bank (can't really do internet banking when I handle cash) and then if I have a bad month in collections, tap into the reserve.

Does anyone know if it hurts your credit if you reduce your LOC voluntarily?

[maat55]

I currently have 7,500 in working capital, if I feel the need, I call to twist arms.