Although I’m a pretty avid debt puncher, I do compromise on two issues…
If you didn’t already know, houses are kind of expensive. The median home price in my zip code is $500,000. Even if Girl Ninja and I were able to stock away a whopping $50,000/yr in savings (which we aren’t), it would take us 10 years before we could pay cash for a house in our hood. And that’s assuming home prices don’t increase during those 10 years we save (which we know they will).
Last year we took on a $280,000 mortgage for our $350,000 home. That means we put 20% down and financed the remaining 80%.
I would never try to call my mortgage debt “good”, perhaps “necessary evil” is a better descriptor.
This one goes without saying, and I assume most of you would agree.
If for some reason the crap hit the fan and I was faced with a decision between death or debt, I’m gonna take on some debt. That said, I am doing what I can to ensure I never have to be faced with that choice. I pay a pretty penny for health/dental/vision insurance each month, not to mention I have a decent chunk of change sitting in an emergency fund.
My insurance and savings should significantly diminish the chances of having unpaid medical bills, but on the rare chance I needed to buy an organ on eBay, you better believe I’d do so.
Side Note: How much do you think a kidney goes for on the black market? $50K? $100K?
That pretty much wraps up my Tolerable Debt List.
I realize my stance may be extreme for some, and for others, it’s probably not strict enough. And this leads to today’s question….
Where do you draw the debt line?
What type of debt have you sworn off for good (credit cards, car, mortgage, payday loans)?
What type of debt are you comfortable with (mortgage, cars, 0% credit card offers, etc)?
At what point does debt go from being logical to being ridiculous?