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Debt Unicorn

I’m convinced whoever decided to draw a horn on a horse, and call it a unicorn, is also responsible for fabricating the idea that debt is a reasonable way of life. Seriously, it takes a very creative mind, or at least a lot of drugs, to make unicorns and debt popular. It boggles my mind.

I think debt is rooted in complacency (whoa that sounded kinda deep). There is nothing wrong with being content, but complacency frustrates me. Credit card debt, flat screen TVs, new cars, an overpriced home, stainless steel appliances, are unfortunately where prestige is sought. Keepin’ up with the Joneses is the American Dream. People with $40K annual incomes are living a six-figure lifestyle.

Don’t get me wrong, I have no beef with nice homes, luxury vehicles, energy efficient appliances. Actually, I think they are all awesome, and one day, I hope to own these things, but guess what…. I don’t. I refuse to conform to the norms of society, when those “norms” are self destructive.

I drool at the sight of a plasma TV, but realize that the benefits of the TV (high definition/sexiness), don’t even come close to outweighing the negatives (decrease in net worth, more TV watching=less productivity, a desire to then increase sound equipment/dvd player/etc). So although the Joneses may have a plasma in every room of their house, I know that my life is actually better without.

Look at this picture of a Unicorn and tell me that’s not one crazy looking animal…

Now look at your credit card statement, and tell me your balance isn’t even more crazy! You can hang out with the Joneses all you’d like, but I think I’m gonna keep kickin’ it with my PF homies and increasing my quality of life.

Why do you think America has become complacent with debt? Where did we go wrong? Has it ALWAYS been this way? Do you think we learned anything from the recent recession?



  1. I am a unicorn rider.

    But before you get out the pitchfork and torch, I would like to add that I don't hop on every pretty, pink pony that comes my way. I think my unicorns may actually be donkeys with a horn strapped on, but I'm content to catch a ride with the occasional one if I think he's doing in the right direction. I believe debt is a tool and like a chainsaw I could use it to make my life easier or I could wield it like an idiot and end up really hurting myself.

    For example, Mr and I take advantage of no interest financing when we know that a) we were already going to buy the item and b) we have enough money to buy the item outright. While we could just pay cash then and there, we'd rather have the money gaining 4% interest in the money market account for 12-24 months. (Of course, we are also incredibly careful about paying the debt off a month or two before the deadline just to make sure we don't get pimp slapped with the loan interest.)

    I think America got this complacent with debt when we bought into the fallacy of the middle class and instantaneous rewards. For some reason we decided that everyone deserved to live like a white collar worker, whether you had a high paying job or not. The ugly truth is that not everyone will be able to afford the best things and that the only way to earn those nice things is to live within your current means and save up.

    And no, I don't think we've learned anything. As soon as the economy recovers, most of the country will be right back to their old habits. Just check out the people who get their tax returns and how many of them immediately use it on a new TV or other item they couldn't afford.

  2. Americans became complacent during the Reagon era (c. 1980s), and it has been down hill ever since. The concept of a free market managing itself became popular, interest rates dropped, credit and loans became easy to get and the Dow reached the 14,000 range. Baby Boomers were earning more money than ever, and were willing to spoil themselves.

  3. Debt Unicorn, love it!!

    We've got more of a bear that lives under the house and that we're poking with sticks. Maybe that's what unicorns become when they grow up. Fortunately, our pet debt bear (student loans) gives us a good reason and rationale to live small. Someday, when it's all paid off, I'd like a few shiny, unnecessary lifestyle add-ons. But until then, I have no need for a Macbook, I bartered my way to an iPod, I like HD LCD and Blu-Ray but know it's not in our future for years, etc.

  4. The Federal Reserve has reported that credit card debt has declined for 15 of the past 16 months, with this past November seeing the sharpest decrease. Whether this is permanent or not remains to be seen. For the moment this appears to be a good sign, but it's also a double-edged sword: when people spend less, the economy contracts and more jobs are lost – which produces a vicious cycle where people save more/spend less, the economy contracts, etc. The trick is to keep a balance between spending and saving. Personally I budget about 20% of my gross towards savings, in the 401(k), the Roth, and CDs; and about 10% for spending. I use credit cards, but only to the degree that I can pay the balance in full and not incur interest.

    • It is tough that the economy is contracting and people have lost jobs, but at the same time I think it did have to happen sooner or later. The credit fuelled economy could not continue on forever. The economy was supercharged on credit, and the supply was cut.

      It seems people expect advanced economies to continue growing at like 3% a year, but can this really continue forever? Somtimes I wonder. There's only so many resources out there to be used, and the Earth can only handle so much abuse. What's the alternative though? Going back to a simpler way of life, being happier with less, and *gasp* no more flat screen TV's! That's gonna be a tough day when it arrives.

  5. Same comment, part 2:

    I'm not big on the Bible or religion, but Joseph in Genesis had it right IMO: save during the 7 fat years so you have something in reserve for the 7 lean years. Many people spent like crazy during the fat years and have little or nothing now. But to give up completely on spending is not the answer, I believe. It didn't help the Japanese, and it's not helping us.

    (Full disclosure: I don't have a plasma TV, my computer is five years old and still runs, my car is 10 years old and runs just fine, all my major kitchen appliances are 20 years old.)

  6. Great analogy (and I loved the pink unicorn artwork). People do own plasma TVs and energy efficient appliances and didn't go into the dark side. If you can't afford to pay cash now wait until you can.

  7. I'm with Bucksome Boomer. Only because I love the Unicorn. It's real, but its in Greenland. You know, far far away from anyone. I don't think Keeping Up with the Joneses necessarily means that you have to be in debt. If you can afford it now, and the Joneses have it, then why not? But if you can't, then I think you need new friends. Try the Johnsons down the street. They're pretty fun too.

  8. I'm still paying for things that I have since sold because I can no longer afford a place to PUT them. Yayyyy. NO more Joneses for me, only Benjamins. Debt is utter nonsense. It's a shared illusion, for sure.

    But… unicorns are TOTALLy real, ok?

    • no!if god didn't mentioned this animal then how come you bloody bustard idiot duffer doofus and witch say that it is real u r bustard bustard and bustard

  9. But… But… I am 33 and rainbows and unicorns are still “my thing.” I love them so much that my not money related blog has a catchy phrase “nothing but rainbows and unicorns.” It’s snarky because I’m a snarky girl, but…

    Crap. Is this why I have $150k in unsecured debt? I’m giving up debt (slowly but surely – it’s not super easy to give up that much debt overnight), but I don’t know that I can get rid of rainbows and unicorns… I think that unicorn looks badass.
    .-= Frugal Lawyer´s most recent blog ..TFL Presents: Baking Bread =-.

  10. I agree, not sure why this is a known practice and it should not be accepted. I think things are changing though with the newer generation out of college.

  11. I can get on the unicorn of responsibly leveraging well earned equity in assets such as homes and businesses. This type of debt allows you to accomplish more than the sum of its parts. The same applies to company mergers and acquistions – 1+1 should equal 3 if you leverage what you have to get something more.

    The type of debt you are specifically referring to is pretty toxic. Not only does it drown familes and hurt many aspects of your life, but it is self feeding. The manufacturer of a tv can charge higher prices if they know the credit market exist to fund the purchase. It goes around the economic cycle back to the supplier of parts charging the manufacturer more and repeats. That is why bubbles pop. Keep an eye out for the future student loan bubble, and don't say I didn't warn you. If the government reduced it's lending in that arena how would schools charge such high rates per credit hour to support their massive infastructure. Who are the largest employers in your city? Just a thought 😉

  12. I blame MTV, reality TV and advertising which has reached saturation point for America's and Australia's addiction to debt.

  13. I was gonna post a long comment, but I'm gonna try to be short & sweet instead. 😉

    The hubby and I have a fairly nice list of what many would consider "nice" things… With zero credit card debt. I would list everything that I consider nicer, but I'm afraid of feeling like I'm bragging. (I totally don't mean to, honest!!)

    Our only debt is ~$1.8k on a car loan that'll be killed in March or so, and my ~$30k or so of student loans.

    You can have those nice things, you just have to decide what your priorities are. (And be totally honest about what you can afford.) For us, our priority is clear — Everything's for the cars. 🙂

  14. Oh boy, credit card debt. My husband and I just started our journey out of debt about a month ago. It's going to be a LONG road! We were not exactly complacent, we just felt like it was too big of a mountain to climb. We thought that our financial life is so wrecked already, so why bother? Let's live for today!! Haha. BAD idea! Now that we have woken up, we figure whatever progress that we make is better than nothing at all.

  15. Have you ever seen an angry unicorn? They are vicious and scary looking! (It's true…ask anyone that knows anything about unicorns.) Actually, that works out pretty well with your comparison….when everything is fine and dandy, and the money is flowing you and your unicorn might get along fine. But the minute you do something to piss off your unicorn (i.e. miss a payment?) all bets are off…you better get off that unicorn and run for your life!

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