Lightly Slap Debt In The Face

Debt is quite possibly one of the most interesting pieces of personal finance. It’s relatable, as the majority of Americans have some type of debt (credit cards, student loans, mortgage, car payment, etc). But what is really interesting is the way it can polarize the PF world. I mean just look at the title of my blog. It’s pretty clear I’m not a big fan of debt. In fact, I once wrote a post titled “Good debt is for dumb people.” I do, however, realize that MY opinion isn’t the ONLY opinion.

Debt freedom is not a prerequisite for financial freedom. In fact, I’d take out a $20,000 car loan today if it meant I could have $40,000 in the bank six months from now. Does that make me a PF sell-out? Perhaps I should change my blogs name to Lightly Slap Debt In The Face?

Sure, I don’t have plans to go in to debt anytime soon. Yes, I plan to take on a mortgage one day. No, I don’t think you are going to Personal Finance Hell for having auto loans. Yes, I think you’re stupid for having a degree in Art History if you have $100k in student loans. But at the end of the day, what I think/do/say doesn’t really matter for anyone but myself.

I’m not gonna beg you to pay off your car loan sooner, because what you do doesn’t really effect me. Heck, maybe you’ve found some clever way to leverage car debt and use it for financial gain (doubtful, but possible)? Just because I don’t gamble with bank loans, doesn’t mean you shouldn’t.

We are all adults here so I’m going to assume you can make adult decisions and determine how much debt you’re comfortable with. I have no authority to demand you curse the name of Sallie Mae, or rebuke your love of credit cards. Afterall, I’m just an immature dude, with a blog, and REALLY crappy drawing skillz that likes to throw his $0.02 in on the boring world of personal finance.

So now that I’ve gotten that off my chest, I’d like to ask you a few questions. What debt have you sworn off for life? Any debts you plan to repeatedly incur (i.e. car loan)? Do you use any type of debt as a means to become more financially stable? If so, how?

31 thoughts on “Lightly Slap Debt In The Face”

  1. I don’t want to buy anything ever again that I cannot out-right buy. I will have my student loan and car loan paid for by the end of this year and will start working on paying off my mortgage faster (which I know some people think is bad). I do not ever want to buy another car, house, or anything unless I can pay for it in full.

  2. I would take a flexible approach. Never say never. If the asset is something I really need, the interest rate low, and the payments within my means, I would not automatically turn my back on financing a purchase for an expensive item like a car. Carrying any debt is the “personal finance” equivalent of self-flagellation, but debt is really nothing more than paying a somewhat higher purchase price in exchange for taking more time to pay. Not something to be encouraged, but not something to despise either unless it gets out of control.

  3. After digging myself out of $65K of debt (mostly student loans) I vowed never to have debt of any kind, including a mortgage. This was mostly for emotional reasons, knowing that I sleep better at night not beholden to anyone.

    However, I’ve been doing a lot of research regarding how very wealthy people think, and it’s quite interesting. They take risks, and they aren’t afraid to borrow if it provides them leverage for an investment they believe in. I’ve also been considering rental properties and while I would like to own my primary residence out-right there are some benefits to having a mortgage on a rental.

    So I’m not sure what the future will hold, but I’ve backed down my “no debt, ever” matra to something more akin to “no debt, unless it really makes sense.”

  4. Sworn off forever: credit card debt, any kind of high-interest short-term debt.

    We will definitely take out at least one mortgage, as we are planning to buy in southern California.

    I don’t really want to take out an auto loan, but I can’t say with complete confidence that we won’t. If we had some sort of weird car emergency in the next couple years that required us to buy another car we might have to take out a loan as we do not currently have a car replacement fund. Of course, medical debt is always a possibility in the case of an emergency. I don’t really see us as entrepreneurs, but if we were to start our own business I would consider a loan for start-up costs if capital was needed. I would probably consider taking on parent loan debt for a child, even though we also plan to save up for their educations. My parents did that for me and it really gave me a leg up.

  5. No, punch debt in the face, hard. Maybe do a Chuck Norris roundhouse kick to the debt’s junk even. I think your views are right on, man. Yeah, I guess everyone’s different blah blah blah, but I think all debt sucks, too, and that eveyrone should do their best to pay it off as soon as they possibly can. My wife and me have only a mortgage left and we’re working hard to pay it off early. Don’t wanna be indebted to anyone!

  6. I’m a never say never person, you just don’t know what life will throw you. That said, I don’t PLAN on having credit card debt or a car loan again in my life. And anything that meant incurring debt to make me more financially secure would make me nervous, as I’d worry it would backfire on me. So no thanks to that.

  7. I think I’m swearing off auto loans. I have one now that I’m aggressively paying off. I read the “Retire Rich, Retire Young” by Robert Kiyosaki (some have their own strong opinions of this man) but he made a good point about OPM (other people’s money) that struck me as poetic. If you have $200k to buy a house in cash why not make down payments on 3 houses that you could rent out and MAKE a profit on? It makes sense to me since that is a long-term investment and passive income (if you get a property manager). I don’t like debt or owing anybody, but I like to turn a profit. So auto loans – no, mortgage – yes, multiple income streams – hell yes.

  8. I’m not really a fan of debt either. One debt I swear never to have is credit card debt and perhaps a car loan. Only way I would get a car loan, is if the interest was 0%.

    As far as a mortgage, I think I would get a mortgage for a rental property, and a mortgage for our house. However, I do not want to get a loan of more than 100K. That’s my max.

  9. I think mortgages are good as long as you are smart enough to save up and put 20% down on your house. Other than that, the only debt I like is debt that I leverage for a better return. I have lots of 0% debt because I get 1% in my savings account so I make money by carrying the debt.

  10. If institutions are offering loans which are lower than inflation, why wouldn’t you take advantage of them? If you don’t, you’re depreciating your future dollars.

  11. Right now pretty much debt free, however, next year in going to grad school, getting married, and will be living off the fiancée’s teaching salary (rolling in the big bucks!) so…. Debt here I come

    But I am aware of the smart ways to do debt and my fiancée and I have talked a lot about living within our means and paying down debt fast etc. so hopefully in the not too distant future there won’t be any debt

  12. Great stuff, personally my own artistic skills are hardly on par with yours but bringing together squiggles and a bit of slap-stick humor isn’t a bad approach. Perhaps if people took a look at their debt problems a little less seriously, they wouldn’t stress out as much.

  13. I don’t know if there is any debt I could swear off for life. If I go back to get my Master’s I might incur some student loan debt, if I get a new car, I might get a car loan, if I have some huge money emergency, I might get into some credit card debt…

  14. Sworn off? Any & all if possible but unfortunately I feel as if chuck Norris gave me that round house kick to the uterus with the debt that my husband & I have accumulated, mortgage, car loan, credit cards, bank loans, store cards, borrowed from 401K.. Plus 2 kids with daycare expenses.. We both work but we lack the knowledge to know what our best option would be to eliminate it.. Suggestions??? Otherwise we pay our payments but live basically paycheck to paycheck..

    • Hope it’s okay that I suggest something Incrediblemulk.

      It’s not for everyone (although I’m not sure why) but The Total Money Makeover helped me and my wife eliminate $26K of our debt but more importantly helped us change our mindset about debt in general.

      Life is GREAT without any and all debt! 🙂 You can do it!!

  15. Great points… there are scenarios in which taking on debt makes a lot of sense. And you could very well even end up ahead by doing so. I think the only problem is when people have no clue what they’re signing up for by taking out a loan, maxing out a credit card, etc.

    With that said, my husband and I are going to do our best to avoid debt. Buying cars and maybe even our house in cash. But if there’s an opportunity we want to jump on before we have the cash saved, we would absolutely consider taking on debt.

  16. Thanks Brad I’ll check out the book 🙂 never hurts to look into it.. My problem is.. Things have to be dumbed down for me to get it.. It’s why I like this website so much.. Not intimidated by stick figures riding unicorns lol.. I guess my lack of understanding is why I’m in the situation I am in though.. Uuugh where to begin.. I wonder if the total money makeover has Awesome illustrations too lol.. Thanks!!

    • The Total Money Makeover gives you an easy baby step by baby step method to saving money, eliminating your debt, and paving the path for financial freedom down the road. Some of his critics say he has oversimplified the process but I think it’s a good thing. If you like the book he also provides a lifetime membership course called Financial Peace University, a pretty comprehensive video course on personal finance. It really helped our family and the families of those I helped through the course here where I live. Hope it helps! 🙂

      P.S. I love this blog too, ESPECIALLY the stick drawings. 🙂

    • I will second Brad’s advice to check out Total Money Makeover (borrow it from the library if you don’t want to spend the $$ on the book). I could manage the debt I had but worried if I lost my job I’d be in bad bad shape, and the debt was keeping me back from feeling financially secure. In 4 years I paid off over $60k in debt and got my emergency fund to $10k. I’m now working towards paying off my mortgage and should have that done in 3.5 to 4 years. For me it was just a mental shift – it doesn’t have to be like this. It really was life changing for me. Good luck to you!!

  17. My only debt is my mortgage. My DH wants a bigger motorcycle. This is of no importance to me, but of course my sanity is, so I have to play along. I’m content to plunk away a few hundred dollars here and there until he drops the idea or we finally save up enough. He, on the other hand, feels fervent about it and won’t let it go. Time is of the essence in his mind. It’s driving me mad! Neither of us really want to take it on as a debt. BUT, I’m considering it, only because I know it would bug me so much that I would feel compelled to rapidly pay it off. I’d rather pay for Contentment Therapy.

    The bottom line is, you never know what you’re capable of until you’re placed in an uncomfortable situation.

  18. I fully expect to take out a car loan again. It’s just not possible for me to save for everything at once. I’d much rather max out my Roth than scramble to save for a car, especially when, if you have good credit and shop around, you can get a REALLY low interest rate.

  19. Having no debt is a great feeling. Also, being able to save money and “play around” instead of paying down debts is even more intoxicating. Even though I’m in a great place being totally debt free, I do not make enough to enjoy life like I want. This fact makes me yearn for debt to buy outlandish things like a fancy home, car, and other various “toys.” Or take on debt to travel the world. Fortunately and unfortunately, I resist that temptation.

  20. I’ve certainly sworn off credit card debt. I think car loans can definitely be leveraged to better your financial future, if it’s possible to get a lower interest rate on the loan than you could incur in your investment vehicle of choice. I definitely plan to mortgage a house eventually, which is the ultimate debt. We’ll see though.

  21. I’ve decided not to go into credit card debt ever again. Yes, and this includes getting credit cards and paying them off every month. I just don’t want the hassle of using credit cards. Plus, I hear you pay a lot more than when you’re using credit cards because you’ll have a tendency to spend more.

  22. I don’t think I ever want to go down the home ownership road again. I bought a modest condo 9 years ago and lost my job 10 days after moving in. Then the economy crashed in my city and 25k people lost their jobs. Those jobs never came back. I held onto that condo for 3 years doing odd jobs for people. Then I sold it and made $33K. I paid off every single debt, created an emergency fund and started to invest. The 33K profit sounds great but the stress and strain of that period nearly put me in the nut house.

    I could buy another modest condo but most properties, (I live in Canada where we did not have a foreclosure crisis) even a condo in Cracktown, is over 100K and includes condo fees that are as much as a mortgage payment. I make enough money to buy a condo but then I would have to stick with a job I don’t really like.

    I think I will stick to my 1 bedroom apartment and invest my money another way.

  23. We have a mortgage, and in the past we had an auto loan. At this point, post Total Money Makeover, we have sworn off credit card debt (not that we ever had it really, my husband pays off his card monthly and would rather eat dirt than pay the CC companies any interest) and auto debt.

    We now save for things we want. And that includes cars, home repairs, vacations, etc. If you can pay for something with a monthly payment, then you can save up for it ahead of time. We are savers, planners, investors!

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