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View Full Version : Is debt "part of life"?



frugalone
3-6-12, 1:41am
I recently posted something on a librarians' board re: not wanting to go into debt for library school. After poster after poster told me there are scarcely any grants (just loans) for library school, I said I really did not want to borrow money.

I'm never sure I can pay it back. As you probably know, librarians don't make a lot of money...and who knows if I'd find a job.

One woman said, "Debt is part of life. Why are you afraid of it?" or something to that affect.

Do you agree? I definitely do not.

ApatheticNoMore
3-6-12, 3:02am
I recently posted something on a librarians' board re: not wanting to go into debt for library school. After poster after poster told me there are scarcely any grants (just loans) for library school, I said I really did not want to borrow money.

I'm never sure I can pay it back. As you probably know, librarians don't make a lot of money...and who knows if I'd find a job.

One woman said, "Debt is part of life. Why are you afraid of it?" or something to that affect.

Do you agree? I definitely do not.

NO. I mean ok mortgages make a lot of sense for a lot of people, but beyond housing debt, what I believe is if it takes debt to afford it, then it's not for me. I may be a wage slave, but to sign up for debt slavery is to sign up for a whole other level of slavery with much heavier chains (student loans are probably the worst, they can't be discharged even in bankruptcy).

I even get miserable when I know the next paycheck is going for a credit card payment (and I pay them off every month, I just have had months I run them up to the equivalent of a paycheck minus spending money first :)). It's just so demoralizing. What am I even working for? Money already spent, not getting ahead, tote that barge, lift that bale ... another day older and deeper in debt .... white collar work don't get you nowhere, you just go round and round in debt .... and that's what I find myself singing :)

catherine
3-6-12, 7:09am
No. It doesn't have to be. My experience with the Dave Ramsey plan has challenged that paradigm for me. In my born-again anti-debt mind, I can see that no one HAS to debt. Period. It takes planning and vision and living a certain way, but you can get through life and buy everything with cash if you want to. And you are much, much better off if you avoid it like the plague. The borrower is indeed slave to the lender.

I would admit that it's not easy to buy a house cash, and some might say, secured debt is a different story. I'm sure that's what the people thought who are now underwater on their mortgages due to an expected turn in the economy.

In the case of student loan debt, people also say that that's "good" debt because you are investing in yourself. Again, there are LOTS of people who figured out a way to work themselves through school.

Debt is theft of your future, no matter which way you cut it.

Rosemary
3-6-12, 8:15am
I got through school without debt, but I don't know that it is possible today. College costs have skyrocketed as you know.
I have contemplated going back to school to earn a different degree, so I've looked at costs recently, and if I were to do that I would have these options: either to go so slowly that I would be close to retirement age by the time I earned a degree, or to use a huge chunk of our savings that are intended for DD's college and our retirement, or to take out a loan. None of those is really appealing to me... so that is why I'm still contemplating it.

razz
3-6-12, 9:01am
Mortgages within one's means is the only form of acceptable debt for me. Everything else, pay as you go or don't go.

Mrs-M
3-6-12, 2:56pm
Absolutely not, but what a heck of a time we'd have selling our wiser beliefs and practices to the general populace. Be in debt to yourself, Ladyinblack1964, not someone else.

Zoebird
3-6-12, 3:21pm
I don't think so. I used to -- because my family lived in debt, that's just what I grew up with, and the idea of student loans was like "of course" and "it's ok" and so on. My parents paid for my undergrad (thank goodness), but honestly, I should have worked my way through.

I'm really proud of some other young people that I know. 22 years old, young married couple, going back to the US for 3 years to get their masters degrees (MDiv/social work; MSoc in equine therapy). They are going to live with the young man's parents (they agreed, of course), work full time (both have jobs that are work-from-home), and then go to school full-time as well.

Their plan is to go back on Wednesday, then start their jobs next week. They'll work for the next 6 months, saving up to pay for their tuition -- the first semester being in Sept. She's in a 2 yr program, and they accepted her with a partial scholarship as well, and if she does well in her first semester, she'll get another scholarship for the next year -- which basically cuts the expense of that tuition down to 1 year's worth (or $9,000). And then her income will also cover his tuition (which should come to $60k all done, but he can also qualify for scholarships and grants in the second year, and hopes to get some as well).

They want to pay cash, all the way. They are currently debt free, and doing very well. They've had a tough 7 months, but they'll be alright.

I'm really proud of them, to be honest. They are hard working, good people.

I wish that, at their age, i'd had the same self/financial awareness that they do.

Stella
3-6-12, 8:53pm
No, I don't agree. Student loans in particular have been the bane of my existance for far too long. Ugh. They are on my list of things to tackle this year.

I would honestly need to know that a student loan was going to pay off long-term before I'd go back to school on loans. As ANM points out, student loans have to be paid back eventually. They can't be discharged. IIRC you are already facing some big financial difficulties. I'd be hesitant to add to that with more debt.

puglogic
3-6-12, 9:11pm
I don't agree. We have no debt except for our mortgage now, and I suppose if I'd been wiser about SL when I was younger, I could've avoided even that.

I managed to get through school without taking out loans. It just took longer -- but I enjoyed it more that way, was able to continue working while I did it, and now I owe nothing. If I'd been working on a PhD, well, unsure how that would've turned out.

It's just a paradigm shift.....painful when I started, because I wanted everything Now, but it's second nature nowadays.

eta: One thing that did help a lot was that my degree was closely related (well, closely enough) to my small business, and so a good chunk of the expense was tax-deductible as education. It's served me well in the business too, so I feel good about the whole thing. Anyone contemplating starting a small business might keep this fringe benefit in mind.

frugalone
3-6-12, 10:13pm
I definitely don't want any student loans. Or car loans. Even a mortgage scares me, to be honest. It took me years to pay off my debts and I just want to avoid that "feeling" again. I'm so worried about finances right now, that I thank God every day I don't have any debt!

Thanks for your input!

Zoebird
3-6-12, 10:37pm
good for you, LIB! :)

I think that if you do manage to get a job in a library, the university or library may be willing to pay for some education -- assuming it's even required of you. :)

redfox
3-6-12, 10:58pm
I have student loans I regret, but only because of the amount. I was in my money insanity era when I took them out. Still trying to figure put how to pay them back AND save for retirement. In fact, I am calling a financial summit meeting this weekend to plan this out.

I am fine with some debt, especially secured, like our mortgage. We are "underwater" just a bit, but we also have a nice place to live, and it's still affordable. I don't really care about the market, yet.

Is debt a part of life? Yes. Is it a choice? Yes.

flowerseverywhere
3-7-12, 12:19am
the best thing we ever did was get out of debt and move to a pay as you go family. I only wish we had done it sooner. When I think of the years we spent money on things that weren't absolutely necessary I cringe because we could have become FI so much sooner. I cannot express how thankful we are that we did not move to a more expensive house as our incomes rose. We just stayed put and thank goodness because our friends that got larger fancier houses are still bound to go to work into their 60's and maybe longer.

Education debt could be useful but only if you really know what you are getting yourself into. for instance I know a lot of kids getting education degrees and going straight to masters degrees. But all around me schools are cutting staff and it is going to be really hard to break into a teaching job.

Engineering and Nursing are still in demand skills around here. Physicians are so far in debt when they graduate (several hundreds of thousands of dollars) I don't know how they eventually get out of debt because they are starting their careers so late.

Taking your library classes on a pay as you go basis could be a great thing, but make sure there will be library jobs. Around us many libraries are reducing hours and staff. People are moving to digital books they can download from the library website, with no intermediary librarian. I absolutely would hate it if libraries did not survive as they are today but sometimes you have to really be honest with yourself and make sure you are realistic about how things are going. I know nothing about the library system and the possibility for employment in the future, but what I see around me indicates that there may be less of a need for bricks and mortar book storehouses and a more digital experience.

goldensmom
3-7-12, 6:48am
Debt does not have to be part of life but it usually is a part of most people's lives. We have a mortgage but beyond that I went through graduate school without debt, I worked and paid as I went to school. I had car loans when I was younger and having a new car was important to me and now I just want a good working, clean, functional vehicle so I save up and pay cash. So, debt does not have to be part of life but it depends on priorities (me and the new car thing), lifestyle and financial situations throughout one's lifetime.

Selah
3-7-12, 7:16am
Debt does not HAVE to be part of life, particularly education debt. I've learned the hard way about this...going into debt to finance the training for a higher-paying job (which you will need to pay off the debt) is a DRAG, particularly if the job doesn't materialize. Now I save up for educational needs and pay for it in cash, up front. No debt hanging over my head after the training is completed, and it if helps me earn more, the additional pay is mine to keep.

artist
3-7-12, 8:49am
Debt does not have to be a part of life. It's a choice that is made, not something imposed upon you. People choose to buy more than they can afford, to make large purchases on-time and to take on loans to pay for an education. Once you make that choice to go into debt, it's one you have to live with.

I personally have a mortgage and no other debt. Paid cash for my car, no student loans (worked my way through school) and I have zero consumer debt. Yet I feel burdened by the mortgage and wish we had done things differently. House value was $210,000, we still owe $147,000. House value is sitting at $189,900 right now thanks to the drop in the market so selling won't bring us enough to re-coop the down payment we originally paid out.

Income hasn't gone up and I now have a son in college and I am helping him with tuition. So the mortgage isn't seeing additional payments right now, just minimums. I hate it. I hate owing someone, I hate the feeling of slavery that comes with it. I look around my house and the repair list (new roof, driveway repair etc..) and as much as I love my house, I question if it's worth the burden of debt that the mortgage carries.

cattledog
3-7-12, 9:20am
I agree with you LIB. Debt is not an ongoing part of life. It might be a temporary situation, but I can't imagine *always* owing someone. Yuck.

HumboldtGurl
3-7-12, 11:54am
Oh no way! Never! Good for you, stick to your guns!

I will admit: I used to think like that person. It's what my parents taught me, and because of it I was stuck with $25,000 student loan debt and a lot of stress at age 22. I settled for jobs I hated just to pay my loans, but still, for the next 10 years I accepted that debt was a way of life.

It wasn't until I was turned onto Dave Ramsey and the debt-free philosophy that I had my "DUH!" moment, and got serious about never, ever being in debt again. My husband jumped on the debt-free bandwagon and it's been 5 years since we became debt free, mortgage and everything.

It's tough for most people to see that living without debt IS possible, until you experience the true freedom of not having to owe anybody anything at the end of every month.

My parents are now almost 80 years old, have never owned a house outright and still make car payments. I will never, ever be in that boat.

Don't go into debt over your education. Pay for it as you go, you'll be so glad you did.

militaryman
3-7-12, 2:15pm
A necessary evil or just an evil ? I think it depends ....

Most folks on these boards, that use a credit card, probably agree that paying it off totally each month is the way to go. HOWEVER you are choosing to "go into debt" as soon as you charge something and taking the risk (however small) that something could come up that would keep you from paying it off as planned. We do this because of benefits received.... Myself, I do it because I get rewards points and I also like the convenience of using a card vs cash or check.

Another example is a car note ---- If I was going to purchase a new car and there was an offer of zero interest loan for five years I might choose to keep my cash in the bank earning interest and "go into debt" so that I could get the benefit of using my $$ elsewhere to benefit me monetarily in what I deemed a greater way.

Taking a mortgage is another example of why we justify going into debt for the benefit of HAVING the home of our dreams in our twenties vs. waiting until we could pay cash for the same dream home in our thrities or forties --- also there are other benefits such as tax deductions that make us justify the risk we take on with the debt.

College loans can be a similar situation. If we reason that taking a loan that enables us to focus intently on attaining a degree, that the marketplace has demonstarted will be valued, then taking on the debt risk might be justified. For instance, if I can show that taking $50k out to attain an 4 yr accounting degree will land me a job with an accounting firm making $50k a year vs the $25k I am making now then it might make sense for me to take the loans and reach the $50k per year salary in 4 years vs "paying as I go" over the course of ten years and thus forgoing 6 years of $25k salary raise ($150k) Of course there is risk but there is also a reasonable expectation of reward and intelligent folks make the well thought out choice of banging out a 4 or 6 year degree after HS in order to have a lifetime of higher earnings. I think for me the important thing is the screening process that goes into choosing the right degree for the market and realistic expectations as to what the risk/reward ratio will be... also choosing a university that is not gouging the student.

I am so thankful that I was able to provide college funds to get both my girls thru college debt free but if I had not been able to I would have encouraged both to go to college (taking on a reasonable debt) in order to gain the credentials and knowledge that would give them a foundation for careers that make the kind of $$ that provide them a payoff that makes the loan risk worthwhile.

mira
3-7-12, 3:46pm
Mortgages within one's means is the only form of acceptable debt for me. Everything else, pay as you go or don't go.
I agree with you, razz.

Fortunately, my student loan was only for living expenses and does not count towards my credit rating. Effectively, nothing will happen if I don't pay it back. I have never earned enough to make the minimum automatic payments! Had I known more about finance when I was 17 and starting college, I may have made more of an effort to save the little money I did earn and put it towards the cost of living.

The thought of taking out a loan now for anything other than a mortgage is very unappealing and is something I just will not do. As others have said, it is a choice. For me it makes more sense to seriously think about whether I really need X, Y or Z ... if I do, then I'm going to start saving my pennies!

I do sympathise with you in having to pay for your education though; it's so costly in the US it can be inaccessible without taking out a loan. Any chance of applying for a scholarship? Or does that fall just into the 'grant' category?

bae
3-7-12, 4:29pm
Debt is just a tool. Like any other tool, there are wise and prudent ways to use the tool, and foolish and dangerous ways.

Anne Lee
3-7-12, 4:36pm
One woman said, "Debt is part of life. Why are you afraid of it?" or something to that affect.



What are you afraid of? Uh... maybe BANKRUPTCY?

Maybe being so saddled with owing money that I have no flexibility or options? That all my discretionary income is earmarked before it hits my bank? THAT I HAVE NO LIFE?

A little fear is a good thing.

Zoebird
3-7-12, 6:07pm
with student loans, even bankruptcy can't save you. so they are very risky loans indeed.

Blackdog Lin
3-8-12, 8:37pm
Anne Lee - yes indeed, a little fear is a good thing. Would 'twere I had learned it many years before I did.....

iris lily
3-8-12, 9:44pm
hmmm librarians advising that debt is no big deal? I'd view that with skepticism.

But don't fall for the victim mindset that librarians don't make much money. Many of those jobs are perfectly well paid public servant positions, though granted, in this economy, nothing is easy.

The son of my friends recently graduated from library school and landed a job that I suspect was highly coveted, and with applicants form all over the country, if they had actually advertised. And then, his wife--also a newly minted librarian--got a full time job locally, too. so, it CAN be done.

The Storyteller
3-9-12, 7:03am
Librarians are not going away any time soon. I have been one for 20+ years and my library is busier than it has ever been.

And I am perfectly happy with what I am paid.

militaryman
3-9-12, 10:43am
Debt is a part of life ---- In the end we ALL pay the piper !