Monday, November 4, 2013

Let's talk money....or Debt is not the Worst Thing in the World


I've been reading a lot of blogs lately where people talk like debt is the absolute worst thing in the world...and debt should be avoided LIKE THE PLAGUE.  If you have debt, you will NOT BE happy until you pay it off...and you MUST do EVERYTHING in your power to get out of debt IMMEDIATELY..even if that means sleeping in a cardboard box and working 15 jobs. 

REALLY!!!???

I mean, no one is saying that debt is a good thing, but it's NOT the WORST thing in the world.  It's not something to be avoided at all costs, if those costs include your sanity and your peace. 

Okay, first of all, while debt is not a good thing, it's not immoral either.  The bible talks about debts.  It talks about paying your debts.  It doesn't talk about debt being TOTALLY EVIL.  Debt is simply a tool that we may sometimes use when we need something and can't afford to pay for it right away.  Things like oh...education or houses.  

Now, clearly debt is not a good thing if you are using it to live outside your means. And anyone who reads this blog, knows that we are all about saving money and being frugal around here.   

But, sometimes things come up.....like a law degree because your husband feels called to law school and is a bit burnt out by teaching.  And sometimes the only way to get that is by taking out loans.  And, that's okay....because if everyone listened to Dave Ramsey and no one took out student loans there would be a lot less doctors and lawyers around.  And well...most people would agree that doctors are pretty necessary.  Lawyers on the other hand....it's debatable how necessary they really are....but well....someone's gotta know the law. 

 Now...I agree that one should be hesitant about going $80,000 into debt so they can get a degrees in oh...something really obscure like  Himalayan basket weaving.  But, maybe what this world really needs is more Himalayan basket weavers?  Or maybe someone feels a calling to a more clear career path, like nursing or education or theologian and those student loans may be just what they need.  

And..sometimes even smaller things come up...like the transmission goes out or you need a new car.  And, sometimes you have to go into a small amount of debt...and that's okay.  It doesn't make you a bad person and it's not a moral failing.  I've know good people who've had foreclosures or gone into bankruptcy or had a short sale...and you know what....they're still good people.  Sometimes we make mistakes and bad choices....and sometimes bad things just happen to us.  That's life.  Our worth is not measured by our financial independence.



This doesn't absolve us of financial responsibility., we still have to pay our debt and be wise and prudent..but our worth and value is not measured by the size of our emergency fund or if we are solvent. Even Dave Ramsey himself goes into "debt" each  month when he uses electricity before he actually pays for it!   

So, definitely be frugal....save money.....pay extra on any debts if you are able.  Get a second job IF it doesn't cause too much stress or anxiety.  Do what you can within reason....but don't let debt or financial worries rob you of your peace.  And most of all, listen to Auntie Leila...because there are things worse than debt.   Pay especially close attention to her third point....because are Auntie says...you can get money later, but maybe not kids. 

Trust in God, do your best, be wise and have confidence that everything will work out  Because, usually sooner or later, it always does.  
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(linking up for encouraging posts). 

10 comments:

  1. Yes! I totally agree. My husband and I use credit cards, but wisely - there are actually a lot of benefits to using credit cards that give rewards. But whenever we explain this, people look at us like we're crazy...but it's enabled us to do things we wouldn't otherwise have been able to do, like travel.
    Debt is okay if managed responsibly. I'm with you!

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  2. This is so what I needed to read this morning!

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  3. I was so happy to pay off our student loans this summer, but I don't regret for one second having those loans that made all our combined degrees possible. I was thankful for the opportunity to be educated, and thankful for the jobs it gave us to be able to pay it off :)

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  4. Totally agree, Amelia! Love this.

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  5. I feel compelled to respond because I'm an anti-debt person, even if I'm not one of the blogs you're referring too : )

    First, I think it's important to talk about what we *do* agree on: we are charged with being financially responsible, we have to pay our debt and be wise and prudent, we must be frugal, and save money. We also both agree that debt is not a good thing if used to live outside of one's means. We definitely agree on all those important premises!

    I agree with you/disagree with Dave Ramsey that all debt is bad as well. (Side note: Ramsey's method is okay with house debt - in limited ways that he describes in his book). I think that graduate school debt is okay. I think it's up to each individual student/family to decide how much grad school debt is acceptable for them (based on their own honest research into job prospects and what they feel called to do). My views on undergrad debt are different, but you focus mostly on graduate school debt, so I'll leave that for another day.

    Before I launch into my differing opinions, I want to preface this by saying that there is a small number of people who are not at fault for what I will call financial irresponsibility. There are people out there who had emergency funds that were completely drained by medical woes or a natural disaster. Insurance policies can up and decline you for stupid reasons that leave you footing an enormous hospital bill or replacing everything in your house yourself because the water came from the sky or the ground or whatever and the policy only covered water coming from the opposite direction. (Seriously, that's a renter's insurance loophole). Anyway, if you can't pay your car-repair bill without a loan because you drained your savings to pay for chemo treatments, I don't think you're irresponsible.

    Okay, so : )

    I disagree on the issue of "small loans." If your finances cannot handle a foreseen expense (A car *will* break down. It *will* need parts replaced. That is not an unforeseen expense), how are you going to take care of your family in the event of a seriously rainy day? The breadwinner is injured and unable to work? A child is born with or develops serious medical problems? I am of the opinion that if you have *put* your family into a position where you *can't afford* a $2000 car repair, you are acting irresponsibly. While I agree that foreclosure and bankruptcy don't make a person bad, I do think they are very apt to show an irresponsible person. Our worth is not measured by our financial independence, but our stability and security are, and those things are very important when raising a family.

    Normally I am loathe to argue against referenced articles since you may obviously not agree on every detail, but since you specifically mentioned #3 in Like Mother, Like Daughter, I'll talk about the themes broached. (More things we agree on, to try to avoid miscommunications: it doesn't take as much money as America thinks it does to raise kids and people in most of the world for most of time have lived in smaller houses with less clothing and fewer toys and still become saints). While I agree with her premise that children are more important than money, if you take your "riches" (children) and shove them in a tent and feed them roots and berries simply in order to have more, you are very arguably not caring for the physical needs of your children. I believe that the point where you are no longer able to provide warmth, proper shelter, and sufficient food for your family is a point when your finances should play a factor in determining family size. I want to be clear that when that point is reached is very much up to each unique family - no one outside of their family can/should tell them how to proceed.

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  6. Well, I think that is a sufficient summation of my opinion/response to the points on which we disagree. I think it is safe to say that we agree on almost all the premises. I also hope that this disagreement comes across as polite and respectful. I very, very rarely argue because I hate confrontation, but when I do, I usually get emotionless and come across as very harsh. My apologies if that is the case.

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    1. Don't worry...you are extremely polite and respectful!! I love reading your comments. And, I actually agree with you mostly on your disagreements. LOL First of all, I think she was exaggerating a bit in that article about the living in a tent thing. I didn't take that as serious or literal..I mean that's just ridiculous. Obviously we have a duty to make sure are children have shelter and food. At least that's how I took it.

      As far as your second point about small debts...I agree they are mostly bad, but I don't think someone is necessarily irresponsible if they find themselves in a situation where they can't afford a 2000 car repair. Right now, we couldn't afford that, because we've only had 2 months of income since he started working after law school. This only a very temporary situation. We're taking steps to change that obviously, and in a few months, we should have the money for something like that. I definitely agree that small loans are something to be avoided, if possible..but sometimes life happens and that's not possible. We've been in lots of different financial situations...everything from a rather large emergency fund and lots of savings to almost none....from a very good income to almost none.

      As far as forclosures go...while I don't really know all the details of the people I know who've had them, my impression is that they aren't irresponsible people. I think a lot of people are just a victim of the real estate market crash. And obviously that is a very good reason to never buy a house until you can put 20% down..and we likely won't, because I feel like a house is one of the biggest risks.

      I guess I just feel like I can't judge anyone as being irresponsible or making bad decisions, because I don't know their entire situation.

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  7. I think you have a good attitude about debt. You have to know the differences between needs and wants (you borrow for needs, not for wants) and have to look at things with a long-term economic view--Himalayan basket weaving may be your passion but if you are going to borrow money to pursue it, you need to have a clear-cut idea of how you are going to pay it back. If there are plenty of jobs in the field and they pay enough to support student loan payments and you have no other way of getting into the field (or economically it makes more sense to to it more quickly with loans than less quickly without) than borrowing could be a good idea.

    At this point I'm in my early 50's and I don't know or care what my credit score is. My house is paid for, I have money in the bank and a lifestyle that my job and my husbands can support. That's a good thing. Debt should be a temporary part of life, not a permanent thing.

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  8. I hopped over from Sarah's and this was an encouraging post. I sometimes carry around that little guilty feeling of having some debt...well there are enough sites out there to make you feel so!

    Thanks for sharing the other side of the nickel : )

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